A Stanford Professor Says Working From Home Makes You Happier and More Efficient. There's Just 1 Catch

Here's what the science says about the idea of not going to the office. Plus 7 other things that I think you'll like to read today.

Are you better off going to an office or working from home? For the first time, there’s some solid academic research on the subject, led by a Stanford economics professor.

Short answer: Employees who could work from home reported higher satisfaction and did their jobs more efficiently.

But there's also a big asterisk on that conclusion--one that might make you hesitate before going to a 100 percent work-from-home model.

Hi. I’m Bill Murphy Jr. Welcome to Understandably. Feedback is always welcome at billmurphyjr [at] understandably [dot] [com].
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The whole thing is from a working paper published by the National Bureau of Economic Research, and led by Stanford’s Nicholas Bloom and his graduate student James Liang.

Bloom’s first challenge: finding enough people working in similar jobs, who could divide into work-at-home and work-at-the-office cohorts, and who would actually cooperate with researchers.

Solution: Liang, who was both a graduate student and the CEO and co-founder of China's biggest travel agency. He offered 500 of his call center employees for the study.

Volunteers had to meet three criteria:

  • They had to have been with Liang's company, CTrip, for more than six months.

  • They had to have a private room at home to work from.

  • They had to have decent broadband internet.

The experiment ran for nine months. Participants were randomly divided into two groups: half who worked from home four days a week, and half who stayed in the office.

Managers were concerned. Would employees avoid, "the three main pitfalls of being at home: the bed, the TV, and the fridge?" as the TED Ideas blog's Ari Surdoval put it?

In a word: Yes.

Bloom, Liang, and two other co-authors reported the following results in their working paper, Does Working From Home Work? Evidence From a Chinese Experiment:

  • CTrip saved about "$2,000 per year per employee" on office space.

  • Employees who worked at home were 13.5 percent more efficient and 9 percent more engaged (measured by the percentage of time each hour they were actually logged into the company's call-taking system and doing their jobs).

  • Work-at-home employees "reported shorter breaks and fewer sick days, and took less time off."

  • Attrition rates were 50 percent better with the work-at-home employees.

Finally, while it's hard to measure happiness quantifiably, employees who worked at home "reported higher job satisfaction."

It sounded like a big win for the work-from-home crowd. Afterward, CTrip decided to offer the work-from-home option to almost all of its employees.

But then, something surprising happened: Half of those who’d worked from home in the study itself, chose to return to the office.

They cited two reasons: (a) isolation, and (b) a perception (accurate) that employees who worked from home were less likely to be promoted and receive bonuses.

Also, the volunteers were largely among the company’s youngest employees, who lived with their parents.

Many reported that the experiment made them realize they relied on work as a way to escape from their families each day.

So with that human factor in mind, here are Bloom's recommendations for companies and workers who want to consider work-from-home policies:

  1. Start by making it condition-dependent, maybe offering flexibility during rough weather, or when employees’ kids are off school.

  2. Use it as a bonus or a reward.

  3. Ease into it. Maybe one or two days per week working from home is the best solution, Bloom theorizes. "You don't want to go much higher, because you risk jeopardizing the cohesion of your team."

  4. But, give it a try. Bloom and his team put their research into action themselves. Their report ends by noting that "much of the research for this paper and its writing were done by the authors working from home."

Here are 5 other things worth reading today:

  1. If you don’t know what “OK Boomer” is all about, you probably should stop what you’re doing and read this right now. (Me, on Inc.com)

  2. The NCAA says college athletes can profit off their names and likenesses. Within minutes, a senator said on Twitter he’ll introduce legislation to tax their scholarships. (CNBC, then Twitter)

  3. The strike at GM cost $3 billion. (The Wall Street Journal)

  4. How to explain career gaps on your resume. (Stanford University)

  5. Google is introducing (and selling) .new domains, and basically every company in the world will have no choice but to buy one. (Android Central)

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