“Working from Home” is a Just a Euphemism for Higher Productivity

Mother’s Day weekend has passed, and the emotional roller-coaster has come and gone.  You may have spent time reflecting about what is important to you.  Are your many hours at work meaningful for your personal growth and the home life you desire?  Thankfully, there is a mixed blessing available for those who want better trade-offs: the option to work from home.

There is a lively debate about the virtues of working from home, and we all know why it’s controversial.  You have the freedom to alternate between hard work and lazy selfishness in a manner that makes you feel guilty and sheepish.  Am I the only one who washes bedsheets while I’m trying to figure out how to solve a work puzzle?  I feel bad about the housework, but I forget to take credit that my brain is fully engaged in work.

The Case For Working From Home

The case in favour of working from home comes from a study that was summarized nicely in an article by Bill Murphy Jr. at Inc.com.  Murphy reviewed a study of call centre employees in China who participated in a 9-month pilot.  The employer randomly-selected one half of the pilot group to work from home while the others came into the office.  Call centres have great tracking systems to measure productivity, so they were able to analyze the impact.

The gains were many.  Employees who worked from home saved the company $2,000 per year in office space.  They put 9% more time into productive work hours.  They were 14% more efficient with their time, taking fewer breaks and less sick time.  Their turnover was 50% lower.

Their mothers would be proud.

The Case Against Working From Home

Of course, working from home is not always the best way to collaborate.  Over at the Atlantic, Jerry Useem advances evidence that working face-to-face is better for collaboration.  He cites research by Judith Olson of UC Irvine who worked on an experiment with Ford in the late 1990s that put software developers in a war room.  It was called “radical colocation.”  The close-proximity teams completed their work in one third of the time relative to other groups.  In another study, a simulated cockpit crew in a crammed space were able to able to communicate a major issue in 24 seconds through hand motions and non-verbal utterances.  Face-time and direct communication can be critical for efficient teamwork and collaboration.

The Best Decisions are Sensitive to Context

What is notable is that the evidence twists and turns depending on context.  Call centres are all about the dynamic the employee and customer, so collaborations with work peers might be unimportant.  By contrast, work that is built around face-to-face communication demands proximity.  This would not be the first time that the research on optimal workforce practices concludes that it depends on the context of the business and the mindset of the individual employee.

That research Murphy cited was a paper entitled “Does Working from Home Work?  Evidence from a Chinese Experiment”, by Nicholas Bloom et al, a working paper from the NBER from March 2013.  I gave it a closer read, and there was a lot of nuance not picked up by the business press.

For example, commuting distance had a big impact on productivity differences.  Those whose commute time was more than two hours per day saw dramatic improvements in their productivity when working from home.  This finding is consistent with a theory in labour economics called the labour-leisure model, that suggests people start with an endowment of weekly hours and make trade-offs between their personal life and work life.  Commuting subtracts from the hours-endowment, and if you give those people the option to work from home, they will apply more hours to their work and also to themselves.  The interests of work and home are not always a dichotomy, as both are sabotaged by commuting.

During the experiment, people had been assigned to work from home on a randomized basis.  When employees were given the opportunity to choose, half of them chose to come to the office instead.  They were mostly concerned they would be passed over from promotion.  Employees working from home were 50% less likely to receive a performance-based promotion, which is outrageous when you consider they were more productive.  They were “out-of-sight, out-of-mind.”  I see a side-story about the social contract.  The employer figured out how to spend less money on office space and stop promoting their most productive people, and the employees said “no thanks” and started showing up at the office again.

About 10% of the people who had not volunteered for the experiment chose to work from home after the pilot was opened-up for wider participation.  Once it became increasingly obvious who would benefit and who would be disadvantaged, several people still chose working from home.  This highlights the immense impact of giving people autonomy over how their work lives should be organized.  Any two people can make decisions that go in opposite directions, based on their unique preferences.

May of the employees who chose to return to the office after the experiment rightly perceived that they were less productive when working from home.  When those employees started working in the office again, this self-selection had a contrast-effect on the more-productive workers who continued to work from home.  During the experiment home-workers were 14% more productive, but once self-selection was permitted home workers were 25% more productive.  The impact was almost doubled.

Human Nature Out-Ranks The Logistics

I think it’s important to flag that autonomy itself had a positive impact that was about as important as a comprehensive workplace redesign.  That is, executive decision-making struggles to prove its worth against the impact of a positive workplace culture where people can self-select into higher productivity.

One of the main drivers for increased productivity was that people working from home worked when they were slightly ill.  I have to confess, I have done this myself.  Partially-sick work-from-home days are win-win for employee and employer.  This practice reduces office contagion, gets a mostly productive work-day from the employee who might otherwise be doing nothing, and gives the employee some control over their guilt and workload.

When sick, people need the comforts of home to get well and stay well.  Maybe a family member will bring them a nice bowl of chicken soup that gives them a sense that all is right in the world.

But there’s a catch.  Young people who live with their parents don’t want to work from home.  When people were free to choose, these young people came to the office in order to escape their family.  Thanks for the soup, mom, I love you dearly.  But would you please stop telling me how to format my presentations, deal with the workplace bully, and get along with my colleagues?  I need to choose my own life.