New equipment is one route to achieving this goal, enabling workers to lift their output. But new forms of corporate organization can achieve the same effect.

‘Numbers Like That’
That’s what happened at ChartSpan, whose downtown location in Greenville was a landmark of the city’s strong start-up culture. It had an open-floor layout, and when a nurse was needed to get on the phone with a patient, caregivers signaled with a raised hand.

When the pandemic hit, the company had little choice but to work from home, building off a small remote-work pilot program. 

The early returns astounded managers. Employees were doing more, with greater efficiency and flexibility, while the company’s bottom line was growing. “We had never seen numbers like that in our history,” Carter said. “Our workforce went from Greenville, South Carolina, to the entire U.S.”

There’s more to pandemic productivity gains than just work-from-home. It’s happening as companies find new ways to match their staff, the demand from their customers, and technologies that may have been around a while before businesses settle on the best ways to use them. 

Target Corp., for example, has been investing in digital business since 2017, to adapt to stores that would also serve as distribution hubs for pickup or delivery. When the pandemic hit, spiraling demand led to big gains in productivity. Target expects sales to reach $100 billion this year, up 35% from 2016 with a 20% increase in headcount.

 “The choice doesn’t have to be about people or technology,” Chief Operating Officer John Mulligan said on an earnings call in August. “We can invest in both people and their productivity.”

'Path Dependency'
Target is passing some of the gains to its labor force, raising its starting wage to $15 an hour last year and offering help with educational expenses.

Since worker pay across the U.S. has lagged productivity growth for decades, there are likely battles ahead about how the fruits of productivity are shared out.

That’s if recent increases can be sustained. Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., is skeptical. 

“The good numbers over the past six quarters are not enough to declare a new paradigm,” he said. Productivity always picks up after slumps, he said, and corporate profits are tied to the economic cycle and are currently getting a boost from strong consumer demand.