At-Home Workers Happier, More Productive

Employers have long wanted to know if more flexibility in working arrangements would hurt or help a company's profitability and competitiveness.

It turns out that allowing employees to work from home boosts both overall happiness and productivity, according to a study conducted over 10 months by Shanghai-based travel company

Written by Stanford economics professors Nick Bloom and John Roberts, as well as Stanford economics grad student Zhichun Jenny Ying and business school doctoral alumnus James Liang (a cofounder of CTrip), the study compared the productivity of call-center workers who worked from home four days a week with workers performing the same work from rows of office cubicles.

CTrip’s home workers answered more calls and worked more hours because they took shorter breaks and used less sick leave. These workers also reported being happier than the office workers, and fewer quit. The average home worker saved the company about $2,000, nearly as much as his or her annual salary.

Bloom cautions managers and policy makers who would substitute flexibility with requiring workers to work from home. The home workers in the study were randomly selected from a larger group that wanted to work from home. While the average productivity and happiness of those who worked from home was greater than for their office-based counterparts, the home workers’ productivity varied substantially, with a few not doing as well working at home.

And when the experiment was over, almost half the workers who had worked from home chose to go back to the office despite the added cost of commuting. In interviews with researcher Ying, these mostly young workers on the low end of the wage scale indicated they were lonely.

Flexibility for workers to choose where they prefer working is critical to retention, Bloom says.

The study shows how the advent of mobile computing might lead to more regional income equality and less pollution and traffic in crowded cities, as well as better family and community life. “If people can work where they live, they are going to live in different places,” Roberts says.