As more companies implement return to office mandates, new evidence has emerged that challenges preconceived ideas on working from home. Karolina Urbanska, senior R&D psychologist in NSCG’s leadership consulting team, explains what this means for organisations grappling with the modes of work decision.
The debate over remote working isn’t a new one. Psychologists have been researching this topic since working virtually was made possible by technological advances. It used to be called “telecommuting” or “telework” – terms coined in the 1970s. IBM was one of the first organisations to allow five employees to telework, expanding this experiment to over 2,000 people by 1983.
When the pandemic made the traditional office working pattern unfeasible, the need to understand whether people can be just as productive when working from home became more pressing.
Decisions made on presumptions, not proof
Hybrid working – a blend of onsite and remote work – has now been adopted by around 100 million employees in Europe and North America. As more companies mandate a compulsory return to office for employees, much of the decision-making and debates have focused on the widely held belief that working away from the office lowers productivity and damages career advancement.
These beliefs tend to be based on anecdotes or personal observations, rather than any evidence. Most of the evidence on the impact of moving to a more flexible working pattern is not definitive. It can tell us about patterns, but can’t establish casual evidence.
A company that offers all styles of work could compare those who are fully remote, hybrid, or fully onsite and draw insights. They might find that remote workers have a 20% weaker bond with colleagues compared to fully onsite workers, which seems like a negative outcome. However, it doesn’t account for other factors; those working remotely may not need to interact with colleagues to achieve high performance, due to the nature of their role or their personality. For example, more introverted employees may find roles that allow them to work from home better suited, enabling them to preserve their social energy and prioritise work performance accordingly.
It’s difficult to dissociate these external factors from the impact of the mode of work. Previous research has also tended to focus on fully remote employees. These gaps in knowledge highlight why blanket statements about hybrid or remote work are not helpful.
New evidence on the effects of working from home
Luckily, the evidence base is growing. New research published in peer-reviewed journal Nature has found that, contrary to popular belief, working from home reduces employee attrition without any impact on employee performance.
A randomised, controlled trial examined 1,612 employees at Chinese technology company Trip.com, who switched to working from home for two days a week. Employees were randomly assigned to this hybrid group, or the in-person control group.
The study found that working from home cut employee attrition by a third. This reduction in quitting rates was particularly pronounced for non-managers, women, and those with longer commuting distances to the office.
Employees who were randomly selected for hybrid work also rated their work-life balance, work satisfaction, and life satisfaction more highly. They were more likely to recommend the company to friends, and reported a lower intention to quit.
More importantly, working from home was found to have no impact on employee performance. There was no indication that productivity had increased or decreased over the six-month period.
There was no noted impact on promotions for employees either. This is a significant finding, challenging the notion that working from home can harm individuals’ personal development and promotion opportunities.
That doesn’t mean that all available evidence is universally positive on hybrid modes of work. A study in 2022 found that videoconferencing can inhibit the production of creative ideas. Still, video calls were found to be just as effective as in-person meetings in selecting which ideas to pursue.
If virtual collaboration can limit creativity but not strategy, it points to a need for a careful design of working mode, depending on team or organisational goals.
Challenging the hybrid working stigma
Despite the huge movement towards hybrid working modes, a stigma still surrounds working from home.
In the Trip.com study, employees were initially asked to volunteer to work from home, but less than a third did so. The senior leadership team suspected that employees were hesitant to take part because of concerns that volunteering would be seen as a negative symbol of ambition and productivity. Researchers ended up enrolling all employees to be randomised instead, and those with an odd-number birthday were chosen for hybrid work. There were no differences found between volunteers and non-volunteers in terms of performance or attrition rates, which means that low performers alone were not the ones to initially volunteer.
After the experiment, the 395 managers that took part were surveyed on their views about the effect of hybrid working. It had shifted from a perceived negative to a perceived positive.
We need to stop stigmatising a working approach that allows individuals from all walks of life to improve work-life balance, and keeps employees engaged and committed.
An experimental, informed approach to modes of work
The companies mandating a return to office need to carefully consider the impact of these policies on retaining valuable and diverse talent, and the impact this may have on overall organisational performance and business costs.
The evidence is becoming a lot clearer, but one size does not fit all. A consultative approach is required to understand the impact of offsite, hybrid, and onsite teams within individual organisations.
Many companies take pilot approaches to launching new products or services, and collect metrics to support decision making on expansions and restructures. It’s time to do the same for modes of working. Developing talent and building high performing teams will be dependent on the success of each organisation’s tailored approach to hybrid working.
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