Hybrid work from home policy shows fewer hours, more productivity

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With more than half of American workers still able to work from home, the post-pandemic work world is likely changed for good. Approximately 58% of Americans have the option of working from home at least one day a week, and more employees are turning to that policy to keep their staff happier in their jobs. A recent study suggests that it might be a win-win.

Researchers at the National Bureau of Economic Research found that working from home has some positive aspects for both employers and employees, including increased productivity and flexible schedules.

The study, done in 2021 and 2022 by Nicholas Bloom, Ruobing Han, and James Liang, studied 1612 engineers, marketing, and finance employees in the Airfare and IT divisions of Shanghai, China-based Trip.com, a NASDAQ-listed global travel agent, and randomized them into providing the option to work from home on Wednesday and Friday.

Those with odd birthdays (those born on the 1st, 3rd, 5th, etc., day of the month) were put into a randomized control trial allowing a hybrid work from home schedule, while those with even birthdays were the control group who continued to come into the office full-time as before.

The study found four results. First, working from home reduced attrition rates by 35% and improved self-reported work satisfaction scores, which showed that employees value working from home at the equivalent of about a 4% to 8% wage increase.

Second, working from home reduced hours worked by around 80 minutes on home days but increased it on other workdays and the weekend by about 30 minutes in total, which shows how the structure of the workweek is altered when working from home.

Communication styles also changed as a result of working from home. Work-from-home employees increased individual messaging and group video call communication, even when in the office. They said it was a surprising result, which suggests that working from home leads to changes in employees’ working patterns, even during their days in the office.

Finally, productivity for IT engineers who wrote lines of code increased by 8% for work-from-home employees compared to those who stayed in the office. Employees’ self-assessed productivity impact of working from home was also positive, with an average post-experiment assessed impact of 1.8%. Researchers said they didn’t find any impact on work-from-home performance reviews or promotions overall or in any individual sub-group.

The study notes that this is a key finding since critics like Elon Musk at Tesla, Jamie Dimon, JP Morgan, and David Solomon, Goldman Sachs, say a hybrid work-from-home schedule has a negative impact on productivity.

There were several benefits noted by employees in the study, who reported that working from home allowed them the flexibility to attend a dentist appointment, pick their children up from school, exercise, or travel to their hometown early on a Friday.

Researchers say it matches the survey evidence from the U.S. that the second-largest benefit of working from home is flexibility, with the largest being avoiding commuting and preparing for work. Working from home saves the average U.S. employee about 70 minutes a day, with the saved time being split between additional work and leisure.

Working from home is also usually quieter, allowing for a better working environment for individual-focused activities.

Finally, the hybrid work-from-home schedule can also reduce space costs if firms rotate the days in which teams work from home.

Given the positive results, all employees of Trip.com were given the option to work from home at the end of the six-month study.

Researchers say that while working from home has been increasing for several decades in the United States, it has surged after the COVID-19 pandemic, and by the end of 2022, about 30% of all full-paid working days will be worked from home, with hybrid WFH being the most common approach.