What a New Stanford University Study Has to Say About Working from Home

I work from home and have been doing so for the last three decades. It works for me, but I am very aware that it’s not for everyone. For that reason, I have been closely tracking the move to remote working since the Coronavirus sent us scurrying for cover.

In July, I wrote an article, “Remote Working Is Not Working“. The title says it all, but what has happened since. Is there any hard data?

Yes, there is hard data but its a bit complicated. The study, published by the National Bureau of Economic Research, is by Stanford Economics Professor Nicholas Bloom and a graduate student, James Liang. Its title is, “Does Working from Home Work? Evidence from a Chinese Experiment,” and you may find it a bit turgid to work through. There is, however, a nice analysis by Inc. author Bill Murphy Jr. entitled Stanford Professor Says Working From Home Makes You Happier and More Efficient. There’s Just 1 Catch.”

The author sees one catch, but I see two. Let’s start with Mr. Murphy’s summary. Here are the benefits Mr. Murphy cites from the study (and I am quoting directly)

  • CTrip [the company conducting the research] saved about “$2,000 per year per employee” on office space.
  • The employees who worked at home were 13.5 percent more efficient than those who worked in the office.
  • Work-at-homers also were 9 percent more engaged  than their in-office co-workers (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.
  • And while it’s hard to measure happiness quantifiably, the employees who worked at home “reported higher job satisfaction.”

Mr. Murphy then goes on to give the “catch.” After the study was completed, half of those who worked from home wanted to come back to the office. He notes that the two primary reasons people gave were: They were lonely (I would bet extroverts were particularly so), and they were concerned that out of sight out of mind, and they would not get raises and promotions.

I see a second major “catch,” and it is in the way the study was conducted. It seems that the only way they could find a company willing to divide its employees into two groups, 250 who worked form home and 250 who worked from the office, was to turn to one of the graduate students, James Liang, who owned a company,CTrip, in China.

The problem I see with this arrangement is two fold:

Those who stayed home may have wanted to please their employer by
over-stating how happy they were. Job security during the Covid-19 epidemic is
rough enough, but telling your boss you are unhappy maybe a bit too threatening
for those who anxious are about their jobs.

Chinese employees are hard workers (remember this is the country that built
the great wall) and less inclined to complain than Americans.

As much as I respect the efforts by the authors and Mr. Liang, I am afraid that the way the research was conducted, at least for me, is just too problematic.

My thought is that there will be a wholesale return to the office, not because of what workers want or whether it is a good idea but because the company owns the real estate. For example, JP Morgan just opened its brand new headquarters. It is purported to contain 2.5 million square feet designed to fit 15,000 employees.  You bet JP Morgan employees are going to be coming back to the office.

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