Photo by Arlington Research on Unsplash
Photo by Arlington Research on Unsplash

EXPERT REACTION: Working from home flexibility can improve staff retention without impacting their performance

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Peer-reviewed: This work was reviewed and scrutinised by relevant independent experts.

A hybrid working schedule that involves both days in the office and days working from home can improve staff retention without damaging performance, according to a trial at a Chinese company. For six months, 1,612 employees were randomly assigned to work either three or five days in the office per week. The researchers say the hybrid working group had higher job satisfaction and saw quit rates reduce by a third, with women, non-managers and people with long commutes appearing to drive this reduction. Monitoring the productivity of the employees over two years, the researchers say there were no differences in performance grades or promotions and managers surveyed were more likely to have positive views about working from home than they were at the beginning of the study.

Journal/conference: Nature

Research: Paper

Organisation/s: Stanford University, USA

Funder: We thank the Smith Richardson Foundation for funding.

Media release

From: Springer Nature

Social sciences: Hybrid working improves employee retention

A flexible working from home scheme is shown to improve job satisfaction rates and employee retention in the Chinese office of a global travel agent, a paper published in Nature suggests. The study finds no impact on performance associated with hybrid working.

The COVID-19 pandemic drove a shift towards working from home becoming more common. Resulting studies on working from home mostly focus on fully remote employees conducting independent tasks and find negative impacts on productivity. However, such research does not address the 70% of global employees working with a hybrid working schedule, who tend to be university graduates in creative and collaborative roles.

Nicholas Bloom and colleagues conduct a randomized control trial, spanning six months between 2021 and 2022, to investigate the impact of hybrid working from home on employee performance, retention and satisfaction. A total of 1,612 graduate employees working in software engineering, marketing, accounting and finance roles at Trip.com in China took part in the study. The participants were randomly assigned to work in the office either three or five days a week. In the working from home group, quit rates lowered by a third and work satisfaction scores increased. The reduction in quit rates was most notable for female employees, non-managers and those with longer commutes. Managers also improved their opinion of working from home post-study, having had previous concerns about the impact on productivity prior to the experiment.

The authors assess the effect of hybrid working on employee performance and promotion. They examine measures of employee performance, including reviews and promotional outcomes, up to two years after the start of the experiment, and find no differences between the two groups. As a result of these findings, the hybrid policy was extended to all employees of Trip.com. The company calculated that the potential reduction in employees leaving could save them millions of dollars in recruitment and training costs.

The authors suggest that these outcomes could be applicable to working environments similar to Trip.com, with employees working eight-hour days in modern office spaces.

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Expert Reaction

These comments have been collated by the Science Media Centre to provide a variety of expert perspectives on this issue. Feel free to use these quotes in your stories. Views expressed are the personal opinions of the experts named. They do not represent the views of the SMC or any other organisation unless specifically stated.

Dr Paula O’Kane, Otago Business School, University of Otago

The study by Bloom at al., provides an interesting and objective insight into productivity in hybrid working, and their use of a randomised control study is considered a strong research design. The use of an objective productivity measure (i.e. coding completed), as well as the more subjective measures used in other studies (such as self-reported productivity, used in the Aotearoa Remote Working Survey, 2020) reinforces those findings, which suggest productivity remains the same or increases in hybrid environments.

Of course this is a generalisation, and every role, organisation and sector is different, but in a time when many Aotearoa New Zealand organisations are pulling back on hybrid, remote and home working, quoting productivity, this gives us a much stronger basis from which to advocate for increased access to alternative work arrangements.

Often it is more a lack of trust, or leadership skills to manage remote employees which creates the potential illusion of reduced productivity. Given the right tools, support and communication we can harness the value of alternative work arrangements for both employees and organisations.

As the study also reveals, there were increases in employee job satisfaction, employee retention (particularly for those with a longer commute, found in many areas of Aotearoa New Zealand) and a more positive attitude towards hybrid work from managers post-implementation, all important organisational health and performance indicators. Hybrid work also particularly reduced turnover in female staff, and didn’t impact promotions, which is a potential concern reported in many studies.

We would encourage organisations to seek good productivity measures to really understand the outcomes of working from home in Aotearoa New Zealand, as well as measuring employee wellbeing and the impact on sustainability, before encouraging people ‘back to the office.’

Last updated: 11 Jun 2024 2:08pm
Declared conflicts of interest:
No conflicts.
Dr Amanda Wallis, Research, Development & Innovation Lead, Umbrella Wellbeing

Hybrid working has been the topic of lively debate for years now, with some employers believing that employees cannot be trusted to work effectively from home. Others have embraced the hybrid working model wholeheartedly, down-sizing office spaces and even offering remote-first roles.

This new study puts forward compelling evidence to show that hybrid working is not only compatible with performance (in other words, employees can achieve just as much while working from home two days a week) but may generate considerable revenue savings through lower turnover in the long run. This is in line with other observational research over the past few years, highlighting that employees who are hybrid (compared with fully remote or fully office-based) experience the greatest outcomes.

Of note, women in the study benefitted most from hybrid working when it came to staying in their jobs. This is evidence that work flexibility may help to tip the scales towards gender equality, keeping women in paid employment, and enabling men to take on a greater domestic role in the household by freeing up commute time for household tasks.

Even with these benefits, other research shows that hybrid workers still need support to work effectively from home. Being set-up with the right tools and technology, establishing team norms about hybrid working hours and availability, and ensuring access to equal opportunities for mentorship and professional development all help to make hybrid work successful. It’s also crucial for managers to enable team rhythms that are fit-for-purpose (e.g., collaborating on in-office days, and doing focused work while at home).

Last updated: 11 Jun 2024 2:03pm
Declared conflicts of interest:
Amanda is employed by Umbrella Wellbeing, a workplace wellbeing services provider.

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