Working From Home Works - Bloom et al 2015

JULY 5, 2019

Just came across an interesting paper from Nick Bloom et al (QJE 2014):

A rising share of employees now regularly engage in working from home (WFH), but there are concerns this can lead to ‘‘shirking from home.’’ We report the results of a WFH experiment at Ctrip, a 16,000-employee, NASDAQ-listed Chinese travel agency. Call center employees who volunteered to WFH were randomly assigned either to work from home or in the office for nine months. Home working led to a 13% performance increase, of which 9% was from working more minutes per shift (fewer breaks and sick days) and 4% from more calls per minute (attributed to a quieter and more convenient working environment). Home workers also reported improved work satisfaction, and their attrition rate halved, but their promotion rate conditional on performance fell. Due to the success of the experiment, Ctrip rolled out the option to WFH to the whole firm and allowed the experimental employees to reselect between the home and office. Interestingly, over half of them switched, which led to the gains from WFH almost doubling to 22%. This highlights the benefits of learning and selection effects when adopting modern management practices like WFH.

This is a nice coincidence as I was just reading through Semler’s “The Seven-Day Weekend” with its advocacy for flexi-time and employee autonomy. This paper provides hard “econometric” evidence for his contention of the productivity and satisfaction benefits.

I’ve been running “virtual”, fully-remote, organizations for the last fifteen years – with the latest being Datopian. Whilst there are major challenges, I am firmly convinced that this represents the future of much work – given the continuing advance of communication technology, the rise of the information economy and the need for rmulti-disciplinary teams.


WFH is growing (though full WFH is still low):

Working from home (WFH; also called telecommuting or telework) is becoming an increasingly common practice. In the United States, the proportion of employees who primarily work Working from home from home has more than tripled over the past 30 years, from 0.75% in 1980 to 2.4% in 2010 (Mateyka, Rapino, and Landivar 2012).1

Almost 50% of managers in UK, US and Germany can WFH at least some of the time:

First, the share of managers in the United States, United Kingdom, and Germany allowed to WFH during normal hours is almost 50%, signaling that this is now a mainstream practice. Second, the share in many developing countries is surprisingly high, at 10% or 20%. Survey respondents from developing countries told us that WFH is becoming increasingly common because of rising traffic congestion and the spread of laptops and cell-phone connectivity.

Benefits of WFH (for CTrip) are probably substantially higher than base estimates:

Third, perhaps our results are driven by attrition bias. It turns out that in fact our results probably are biased by attrition, but biased downward, so the true impact of WFH is probably substantially larger

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