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Study Finds Working from Home is Better for Everyone

A timely publication gives new insight to the intersection of business and environmentalism, pointing human beings and business in a win-win direction.

Nicholas Bloom, Associate Professor of Economics at Stanford, is uncovering profound resources as he runs US and international surveys on work-life balance to determine the benefits of working from home. So far his findings are stunning: “assuming nobody moved house, working from home is clearly going to reduce commuting and hence pollution.” Working from home also results in a significant improvements in performance.

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To Raise Productivity, Let More Employees Work from Home

from the Harvard Business Review

The study: Nicholas Bloom and graduate student James Liang, who is also a cofounder of the Chinese travel website Ctrip, gave the staff at Ctrip’s call center the opportunity to volunteer to work from home for nine months. Half the volunteers were allowed to telecommute; the rest remained in the office as a control group. Survey responses and performance data collected at the conclusion of the study revealed that, in comparison with the employees who came into the office, the at-home workers were not only happier and less likely to quit but also more productive.

A Significant Improvement in Performance

After a group of Ctrip service reps were sent home to do their work, they consistently completed more calls than their counterparts who remained in the call center.

 

The challenge: Should more of us be doing our jobs in our pajamas? Would the performance of employees actually improve if companies let them stay home? Professor Bloom, defend your research.

Bloom: The results we saw at Ctrip blew me away. Ctrip was thinking that it could save money on space and furniture if people worked from home and that the savings would outweigh the productivity hit it would take when employees left the discipline of the office environment. Instead, we found that people working from home completed 13.5% more calls than the staff in the office did—meaning that Ctrip got almost an extra workday a week out of them. They also quit at half the rate of people in the office—way beyond what we anticipated. And predictably, at-home workers reported much higher job satisfaction.

HBR: And how much did Ctrip save on furniture and space?

It estimated that it saved $1,900 per employee for the nine months.

Lower attrition rates make sense—working from home gives you more flexibility if you have kids and so forth—but how do you explain the productivity increases? Why would people get more done out of the office?

One-third of the productivity increase, we think, was due to having a quieter environment, which makes it easier to process calls. At home people don’t experience what we call the “cake in the break room” effect. Offices are actually incredibly distracting places. The other two-thirds can be attributed to the fact that the people at home worked more hours. They started earlier, took shorter breaks, and worked until the end of the day. They had no commute. They didn’t run errands at lunch. Sick days for employees working from home plummeted. Search “working remotely” on the web, and everything that comes up will be supernegative and say that telecommuters don’t work as hard as people in the office. But actually, it’s quite the opposite.

So Marissa Mayer, who famously banned working from home at Yahoo last year, was wrong?

It’s not so simple. There are lots of factors that could lead to such a ban, including a culture where remote workers tend to be slacking because of low morale. Also, we were studying call center work, which is easily measured and easily performed remotely.

Did workers know they were being measured for productivity? Could there have been a grace period when they were trying to prove that working at home works, after which their efforts tailed off?

That’s an important concern. Ctrip tried to address it by running the experiment for nine months. The positive impact of working from home was pretty constant over that entire period, suggesting that it wasn’t driven just by some initial burst of enthusiasm.

Will knowledge and creative workers also be more productive at home?

The more robotic the work, the greater the benefits, we think. More research needs to be done on creative work and teamwork, but the evidence still suggests that with most jobs, a good rule of thumb is to let employees have one to two days a week at home. It’s hugely beneficial to their well-being, helps you attract talent, and lowers attrition. JetBlue allows folks to work as far as three hours from headquarters—close enough to come in now and again but a much bigger radius from which it can draw applicants. When I asked the people at JetBlue about this policy, they said it helped them gain access to educated, high-ability mothers who wanted flexibility in their jobs. The airline believes this policy has improved the quality of its workforce.

Who else likes the work-from-home option?

People who have established social lives—older workers, married workers, parents. We found that the younger workers whose social lives are more connected to the office tend to not want to work from home as much. Right now the employees who spend significant amounts of time working from home are on either end of the income spectrum: solitary, per-hour workers like call center reps, proofreaders, and developers, whose output can be easily tracked; or professionals and senior managers, who presumably are highly self-motivated.

(via HBR)

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