What will be the result of the global remote work experiment?
A pioneer of remote work, IBM installed remote terminals in employees’ homes as early as the 1980s, and by 2009, when the idea of remote work was still a novelty for most, 40% of IBM’s global workforce worked at home.
The technology company saved about $100 million in the US annually as a result of reducing its office space.
In 2018, I interviewed a former worker with IBM about the benefits and challenges of working from home for a radio report. She spoke enthusiastically about the flexibility of working her own hours; how her children knew not to disturb her when her headphones were on and how her colleagues who worked on the same team but in different corners of the work, would gather online to socialise.
I asked how she managed her work life balance, and she said, “I think it’s more about work life integration”. I could almost hear the collective groans of listeners on their commute who already felt overworked without the need for ‘integration’.
Working from home seemed like a fanciful notion in 2018, but little did we know that many of us would take part in the ultimate remote working experiment in 2020 because of a global pandemic.
The question now is, what will be the results of that experiment?
We can gain some insights from a home working experiment carried out at the largest online travel agency in China, formerly called Ctrip, in 2013.
The CEO of Ctrip, James Liang, attended a graduate class at Standford University in California when he told Professor Nicholas Bloom about how expensive property was in Shanghai where the company was headquartered. He was considering letting staff work from home because of it but was concerned if it would result in a fall in productivity.
Mr Liang and Prof Bloom teamed up to find out.
They divided 1,000 employees into two teams, separated by their dates of birth. Those born on even days got to work from home four days a week. Those born on odd days stayed in the office all week.
It was easy to monitor the productivity of both teams because their tasks, such as making bookings and phone calls, were quantifiable.
After 9 months, Mr Liang and Prof Bloom discovered workers were 13% more productive at home. This was a surprise to who expected that the trade-off to saving money on office space would be reduced productivity.
Of that 13% increased output, around 4% of it came from workers being able to do more tasks per minute due to fewer distractions. The remaining 9% was attributed to workers working more minutes per shift. Prof Bloom put this down to the fact that commutes were eliminated, lunch breaks were shorter and fewer workers took sick days.
Ctrip offered the option of working from home permanently after the success of the experiment. However, half of the workers who opted to work from home found it harder second time around and wanted to return to the office.
Three quarters of the control group who initially requested to work from home, decided to stay in the office as well.
Those who chose to work from home were the highest performing employees at CTrip. Their productivity rate increased by over 20%. Lower performing employees preferred to work in the office.
Amanda Shantz is Associate Professor of Human Resource Management at Trinity Business School.
She found the experiment fascinating and “probably predictive of where we are going now”.
“The vast majority of people want to spend at least some of their time within the office and so providing this type of flexibility and autonomy may be the best way forward,” she said.
“But there are questions about this hybrid approach. People are saying, ‘Oh sure, just give people a chance to make a decision themselves as if this is a panacea for all of our problems. But other research suggests that there might be limitations or challenges for taking a hybrid approach as well.”
She cites another study on the limits of remote working entitled, “Contagious offsite work and the lonely office: The unintended consequences of distributed work”.
It looked at a Fortune 100 company on the forefront of allowing offsite work.
Employees at their California offices who were free to determine their place of work were interviewed and surveyed. Most employees worked at least some of the time off site.
Employees talked about how working with others at the onsite office made some aspects of their job easier, while also serving important social needs. People who came into the office often did so because they wanted social interaction. As one interviewee who spent most of his time in the office said, “[When at home], you don’t get the, as you walk in, “How was your weekend?” “Oh that’s great.”
“The desk across from mine is the goody table, so somebody brings in coffee cake this morning, candy, whatever, you get the impromptu meeting of somebody grabbing something and you just say hi.”
Another employee who only worked about a third of her week offsite noted the productivity advantages of coming into the office. If you have to pick up the phone or e-mail someone, you have to extend extra effort:
“If you are sitting in the office next to somebody and an idea pops in your head, and you want to bounce it off somebody [you are able to] … picking up a phone is a lot, suddenly it is more important. Writing an e-mail becomes more formal. And so I think that you lose a little bit of that instantaneous kind of collaboration.”
The study also found that when enough people chose to work offsite, there was less incentive for others to come to the workplace because their colleagues might not be there.
The choice that some people make about coming into the office was likely influencing other people’s choices. “This suggests that working offsite could be contagious—once co-workers work offsite the motivation to come to the onsite office is reduced, impacting yet another group of individuals,” according to the authors of the study.
Here in Ireland, the Government is encouraging businesses to embrace remote working and facilitate employees who wish to work from home to do so, long after the pandemic has lifted.
Under the National Remote Working Strategy launched in January, new legislation will give employees a legal right to request remote working.
There is no guarantee they will get it, but if the employer doesn’t have good grounds for refusing, the employee can take a case to the Workplace Relations Commission.
This week, HR Group, CIPD Ireland, held its annual conference, themed “Designing the Future of Work”.
It said the next challenge facing companies as the economy re-opens will be balancing the new demands of workers with the realities of running a business.
Director of CIPD Ireland Mary Connaughton said developments over the past 15 months have made one thing clear.
“Planning a return to the traditional way of working is too much of a risk. Our research shows employees have realised there is another way and they want to have a say in how it will work for them.”
She said responsiveness is key to striking a balance for retaining and recruiting staff. “We’ve come through a prolonged period where we relied heavily on trust to keep the show on the road. That trust will be vital as we enter the next, rebuilding phase of this experience,” she said.
So what is really needed to make working from home possible long-term?
Associate Professor at Trinity Busines School, Amanda Shantz said the short answer is management. “If all senior leaders are working from headquarters, then workers would be drawn to that location to get fact time.
“But if leaders are intentional about working from home, and encourage virtual socialisation and teambuilding, and set an example by working from home themselves, distributed organisations may emerge as the future of work.”
She said employers need to trust their employees. “They tend to be more productive when working from home but they also tend to be lonely and require structured, intentionally planned social activities.
“Communication is radically different in an online world.” Associate Prof Shantz advises employers to adjust accordingly and talk with employees about these differences.
Take care in providing choice to work from home, she said. “Flexible policies should be managed with care.”