Last month, I explained why open-plan offices are the dumbest management fad of all time. Then, earlier this week, I described how a study of 47,264 workers found that they’re happier and more productive if they have private offices. That study, however, assumed that everyone would be coming into work every day. What about working from home?
Given the overwhelming evidence (see the many links below), I’m convinced that allowing employees to work from home is the smartest management strategy of all time–even smarter than giving them private offices.
Before going any further, though, we must ask: What makes a management strategy smart? The best definition of a smart strategy in this context is “an easily implemented strategy that increases revenue and reduces costs.” A quick but permanent productivity boost, in other words.
Very few management strategies meet those criteria. Downsizing, for example, reduces costs but kills revenue. Centralizing and decentralizing are both time-consuming and ultimately a wash. Reorganizing is famously pointless and time-consuming.
And while management fads work flawlessly in PowerPoint, they always fail to deliver in real life, especially fuzzy-wuzzy biz blab like “build a great corporate culture” and “collaborate to be more innovative.” (eye roll)
There is one management strategy, however, that is easily implemented and immediately increases productivity while reducing costs: allowing employees to work from home and remotely, rather than forcing them to come into the office every day. This provides huge financial benefits:
1. It raises employee productivity.
In a landmark study cited in the Harvard Business Review, call center workers on Ctrip–a Chinese travel website–were given the option to volunteer to work from home for nine months. Half the volunteers did so; the other half was the control group and thus continued to work at the office each day.
The study revealed that “people working from home completed 13.5 percent more calls than the staff in the office did–meaning that Ctrip got almost an extra workday a week out of them,” according to Stanford University professor Nicholas Bloom.
Another study, this one from Gallup, found that employees who work from home three to four days a week are 33 percent more likely to “feel engaged” and 15 percent less likely to feel “not engaged” than employees who report to the office each day. Numerous studies have found that increased employee engagement boosts productivity.
2. It reduces attrition rates.
The cost of employee turnover is huge–far larger than most people, even managers, assume. Depending upon the study, recruiting, hiring, and training a replacement after an employee departs can cost up to two full years of that employee’s salary. Assuming, of course, you can find a qualified candidate–a difficult task in a hot economy.
In the Ctrip study cited above, the employees who worked from home reported “much higher job satisfaction” and “quit at half the rate of people in the office,” a result that Bloom said “was beyond what we anticipated.”
In addition to lowering your attrition rate, a work-from-home policy can make it easier to recruit new employees. This is especially true for Millennials, according to a 2018 study at the University of Akron, which found that “41 percent of them state that they prefer communication via electronics as opposed to in person or over the phone.”
3. It lowers facility costs.
A recent University of Sydney study of more than 47,000 workers showed that they are happier and more productive at work if they have completely enclosed private offices. However, that study had an important omission: It did not treat working from home as a testable alternative.
When employees can work from h
