Pushing for Productivity

The debate over post-pandemic scheduling often centers on productivity. There are those who assert that working from home has allowed them to get more done, while others contend that the collaboration that can be achieved in person allows everyone to be more effective.

To understand more about the subject, I decided to analyze my own experience. Working remotely saves me about two hours a day of commuting; that’s a plus. But I probably sleep in longer each morning when I don’t go into the office. Family members (including my daughter’s dog) periodically invade my study and distract me. Errands and chores that would normally be completed on weekends often find their way into the weekday schedule. In conclusion: I am not very productive, wherever I am.

Seriously speaking, though, the debate over productivity is central to post-pandemic economic outlooks. Have changes to business practices prompted by COVID-19 placed the global economy on a more efficient path? And how will the adaptations of the past eighteen months change the work we do, and how we do it? Read on.

the realm of economic statistics, productivity is simply output divided by hours worked. By that measure, we are currently enjoying an efficiency boom: during the past couple of quarters, gross domestic product (GDP) has escalated much more sharply than the time required to produce it.
US Trends in Output and Hours Worked and Productivity

Annualized productivity growth has averaged better than 3% since the current recovery began last April. That is twice the pace observed during the record expansion that ended early last year. Bursts in productivity are not uncommon coming out of downturns, though: firms often hold back on adding human resources until they are sure that demand is strong enough to justify them. Once that confidence is secured, staffing increases.

That pattern seems consistent with the narratives of this summer, where demand is stressing supply. Labor shortages are forcing workers to cover more ground until reinforcements arrive. The scores of open positions in the U.S. economy, and evidence of rising wages, suggest that firms are looking to staff up. In situations like this, productivity growth probably cannot be sustained at recent levels.

But in many cases, firms report the aggressive application of automation to overcome tight labor markets. The examples are many and varied: e-commerce sites have reduced the need for sales clerks; digitized restaurant menus allow fewer servers to cover more tables; and telemedicine visits allow clinicians to visit with more patients each day. These measures serve to keep output high and costs modest over a much longer period of time.