Estimation question
Estimate the expected loss in productivity for a mid-sized app development company due to the company's switch to remote working?
- Estimation
- Hard
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What this question tests
Tests estimation combined with business reasoning: quantifying a productivity impact using a defensible chain of assumptions rather than a single guessed number.
How to approach it
- Define scope: a mid-sized company, assumed as roughly 500 employees in software development, as an explicit assumption.
- Identify productivity levers affected by remote work: commute time reallocation (positive), collaboration friction and meeting overhead (negative), and fewer in-person interruptions (positive).
- Estimate a net percentage productivity change per employee, such as an illustrative 5 to 10 percent short-term dip during the transition, stated clearly as an assumption.
- Convert to a dollar or output measure: multiply headcount by average fully-loaded cost per employee by the estimated percentage productivity loss.
- Adjust for time: assume the loss is concentrated in the first 1 to 3 months of transition and partially recovers as teams adapt.
- State the range and its drivers, since the honest answer is a range with named assumptions rather than one precise figure.
What a strong answer includes
- Identifies both positive and negative productivity levers of remote work instead of assuming the effect is purely negative.
- Converts the percentage impact into a dollar estimate using headcount and cost per employee, making the number usable, not just a percentage in isolation.
- Treats the loss as temporary and front-loaded, reflecting how teams typically adapt to a transition rather than a permanent step-down.
- States a clear range with the assumptions that drive it, rather than a single false-precision number.
Common mistakes
- Giving one precise number with no visible assumptions or reasoning chain.
- Assuming remote work is purely negative for productivity without weighing offsetting factors like reduced commute and interruptions.
Likely follow-up questions
- How would this estimate differ for a company that was already partially remote before the switch?
- What data would you want after three months to check whether your estimate was right?
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Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 2: Data fluency: SQL, logs, and reading the truth yourself
- Chapter 9: Prove it paid off: outcomes, economics, and pricing
- Chapter 14: Get the job: the AI PM interview loop