The concept of working from home seems to have been catching the fancy of both the employers and the employees. Companies are increasingly providing this option on their employee contracts. Well-established companies such as IBM, Dell, Amazon, Nielsen, Deloitte, and Apple are jumping on the bandwagon to experiment with this kind of an HR strategy. According to predictions from Forrester Research, 63 million people in the US (43% of the US workforce) are working from home in 2016. Forecasts indicate further growth to come over the next few years. Furthermore, on talking to students who are looking out for jobs, one can quickly notice how enticing they find such a policy.
At a time when some companies are advocating this policy, many others like Yahoo had totally abandoned it. One of the first actions that Marissa Mayer, CEO of Yahoo, took was to ban telecommuting claiming that “working from home kills innovation.” In fact, in a survey done by SurePayroll, even though 65% of employees felt that flexible and remote work arrangements would increase their productivity, only 19% of companies allowed their employees to do so.
The benefits for companies could be real: save infrastructure costs, travel costs, and commuting time. In an experiment done by travel website Ctrip (and reported in Harvard Business Review), cofounders James Liang and Nicholas Bloom let some of their call-center staff work from home for 9 months. Another group remained in the office and served as a control group. At the end of the experiment, the company estimated a saving of $1,900 per employee for the nine months on furniture and space.
Not just that, they found some other fascinating results. Employees working from home ended up being more productive and happier. They completed 13.5% more calls, the turnover rate (i.e., rate at which employees leave the firm) halved, and they also reported higher job satisfaction. The co-founders argued that office had several distractions (something they referred to as the ‘cake in the break room’ effect). Employees working from home started work earlier in the day, took shorter breaks, and worked until later in the day. As humans, we are wired to concentrate on one thing at a time. And all the office distractions arguably reduce productivity.
If the results are so straightforward, why have the companies been cautious and reluctant to embrace such a policy? Office is also a space for building one’s social lives – connecting with people, sharing ideas, and getting information. Younger employees whose social lives are still getting built prefer coming to office. And then imagine the situations where the work requires creative collaborative work within teams. Would such a policy work for example for an advertisement agency that works on project basis? Getting regular feedback or the opportunity to understand how other components of the project are evolving would be essential.
Working from home has its own set of distractions too. Anyone who has worked from home can recall the number of visits made to the kitchen and the times the refrigerator has been opened! And not being able to see the results of one’s work clearly can lead to low morale and the tendency to slack. For those who have kids at home can end up spending vast amounts of time just enjoying their company. So, even though flexible working arrangements are the preferred options for those with kids or older parents at home, that is where discipline is most required to achieve successful results.
While some critics deny the benefits of this trend entirely, others claim that results cannot be generalized due to various factors such as industry-specific constraints and company culture. A participant in a recent seminar narrated her experience of working in strategy roles at two different companies. While in one they had a very open policy about flexible working hours, in the other working from home was forbidden and even seen as a sign of incompetence or laziness.
With the shifting demographic trends, this issue is bound to get increasingly relevant. The young new-age Millennials who are now entering the workplace value freedom, independence, and uniqueness immensely. Instead of looking at work and personal lives as two separate domains that need to be balanced, they look at ways to integrate them into one. As such, it might be a good idea to allow employees work one to two days a week from home. For companies planning to put such steps into a concrete policy but are unclear of its effectiveness, a pilot test would be ideal.