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Does Jobs From Home Really Work?

by savanna in Jobs From Home 07/03/2016

“Work-life balance is just an infinite dream unfulfilled.”

But it doesn’t have to be that way. Thanks to the ever-increasing performance of new technology, telecommuting has become a reality, as more and more people work from home. So, yes, we CAN work from home, but SHOULD we?

The big question is whether working from home is in fact productive: As managers, we wouldn’t want working from home to turn into shirking from home. Unfortunately, until recently there wasn’t much hard evidence on the productivity impact of working from home.

New research about working from home

There comes amazing new research by Bloom, Liang, Roberts and Ying about the benefits of working from home. Why is this research amazing? One of the authors, James Liang, is the CEO of a top Chinese travel agency, and he wanted to find out if working from home actually, well, works. So, he teamed up with researchers and ran a randomized controlled trial — just the sort of trial that is necessary to authorize a new drug.

So what did the study find?

1. Working from home increased employee productivity by 13%.

For the study, call center employees were offered to work from home four days a week, and come to the office one day a week. Those who were allowed to work from home saw a 13 percent increase in productivity. This productivity boost was mostly due to a 9 percent increase in minutes worked per shift. This is because — perhaps surprisingly — employees had fewer distractions at home. In particular, they didn’t need to go far to get coffee or lunch.

2. Employees who work from home were 50% less likely to leave the company.

Employees who could work from home reported higher job satisfaction. In particular, they were happy to avoid the hassles of commuting. And they followed their heart: Those who could work from home were 50 percent less likely to leave the firm! A pretty remarkable achievement in an industry like call centers where turnover is high.

3. Working from home saved the company an amount equivalent to 40% of employees’ earnings.

Working from home not only made employees happy and productive, it also produced substantial cost reductions for the company. Most of the cost saving was achieved through a reduction in the cost of office space. So, don’t forget the less obvious benefits of telecommuting: Less office space is needed!

Let employees choose!

So should all employees who can do it work from home? As it turns out, working from home is not for everyone. Some employees in the experiment who first chose to work from home decided to come back to the office after trying it out. In the end, those who chose to work from home were those who tended to be more productive at home.

In other words, there is a lot of benefit in letting employees choose their own working arrangement. About 50 percent of the participating employees’ pay was based on performance, so employees had an incentive to make the right choice.

If telecommuting is possible and your employees are paid for performance, working from home seems like a miracle drug!

Does your company allow telecommuting? What has been your experience so far?

By Ioana Marinescu

Ioana Marinescu is an assistant professor in economics at the University of Chicago Harris School of Public Policy. Her research focuses on understanding labor markets. She has been collaborating on data and research projects with CareerBuilder and she is especially interested in how to get the right people to work in the right jobs. You can follow her on twitter @mioana and check out her research on her website, marinescu.eu.