The reputation of working from home is not good. You’ll find scams and low-level virtual jobs if you Google the phrase.
Stanford Graduate School of Business Professor Nicholas Bloom believes that requiring employees to work in the office has been a tradition since the Industrial Revolution. This inflexibility is not only harmful to employees and firms but also ignores the sophisticated communication methods of today and the long commutes.
Bloom said that working from home was a technology of the future during TEDxStanfordopens in a new window in April. “I think that it has immense potential.”
Bloom and his co-researchers, James Liang John Roberts and Zhichun Jenni Ying, examined Ctrip, China’s largest travel agent. The company is headquartered in Shanghai and has about 20,000 employees. Its market cap is around $20 billion.
Leaders of the company, aware of how expensive office space is in Shanghai, were curious about what impact working from home would have. Could they grow without incurring excessive costs for office space? The study involved asking workers to volunteer for a study where half of the participants worked from home but came into the office only one day per week.
Bloom followed these two groups for two years. What were the results? Bloom: “We discovered massive, massive improvements in performance – a 13% increase in performance for people who work at home.”
This increase is due to two factors: first, those who work from home are actually working their entire shift. Traffic delays, long lunches with colleagues, or early departures to allow a repairer can all happen at the office. It is less likely that they will be working the entire day.
Bloom explains that people can concentrate better at home. The office is actually a very noisy place. Bob is leaving, and there’s cake in the breakroom. Join us. The World Cup sweepstakes has ended. “The office is so distracting.”
His study also found that the number of resignations in the company fell by 50% after employees were permitted to work at home. Not only are employees benefited (by working at home), but managers also benefit, as they spend less time advertising, recruiting, and training.
Bloom claims that the Ctrip experiment led to Ctrip introducing a work-from-home option for all employees. Bloom reports that the company made $2,000 per person more profit at home.
Bloom hopes that this example will help to eliminate the negative stereotypes about working from home. “They’re happier and more productive for employees. Managers don’t need to spend as much time on recruiting and training employees. Profits are higher for firms. Reduced congestion, reduced driving time, and pollution will save society a lot of money.
