There’s Cake in the Breakroom! A New Marketplace Podcast

If you work in an office, do you ever find yourself thinking that you could get more work done at home?

That’s the question we address in our latest podcast, “There’s Cake in the Breakroom!”

You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript here.

There are at least two primary perspectives on this topic:

  1. Employees think about how much better their lives would be if they didn’t have to deal with commuting, the office culture, etc.
  2. Employers think about how productivity would plunge if employees were allowed to work at home — or, as it’s sometimes known, “shirk at home.”

But there’s at least one more perspective to consider. A firm might look at the office rent it pays and think it might be worth the trade-off to let employees work at home instead. This could make sense as long as the real estate savings were enough to offset the expected drop in productivity from letting employees work at home.

So what do we know about productivity among those who work at home? While the share of Americans who work at home has been slowly rising, the fact is that productivity is hard to measure.

Enter James Liang and Nicholas Bloom. The former is a founder and chairman of Ctrip, a big Chinese travel website a la Expedia. The latter is a labor economist at Stanford. They, along with co-authors John Roberts and Zhichun Jenny Ying, have done a study called  “Does Working From Home Work?  Evidence From a Chinese Experiment,” in which Ctrip employees were randomized into work-at-home groups and work-at-the-office groups.

The results may surprise you — and, if you happen to run a company, you might rethink your future.

In our podcast, you’ll from Liang, Bloom, and Christine Hoehner, a public-health professor at Washington University who co-authored a study about the health effects of commuting, which we wrote about earlier here.

The working environment at Ctrip. (Photos courtesy Nick Bloom)

Ctrip employees at home and at the office. (Photos ourtesy Nick Bloom)


Bobby G

Where can I read the transcript? The post says "below" but I don't see it.

Bourree Lam

Hi Bobby, there's an “Audio Transcript” button at the end of the post. Hit it once and it will appear!


Working from home would make a revolutionary change in my life as I'm about to start a family. I work in a job where working from home would definitely be feasible. Hell, if I could work in the office between 9-3pm and work the rest from home, that would be great. But there is massive resistance within the corporate culture in the US (and most of the Anglo West). When I first graduated and entered the corporate world in the early 2000's it was advertised to us that working from home was just around the corner, so to speak. However, it seems that all this technology has allowed us to do is do the work of 3 people, cutting down on labor costs for employers, and getting us more entrenched in the office. I would kill to work from home, but with 8% unemployment, I'm too afraid to even ask.


I certainly can relate to being more productive working from home - I've been doing it for a decade, mostly self-employed (software development). Of course there are distractions, but they run both ways. I may decide that it's such a nice day that I'd rather take the dogs for a hike instead of working (but I think about work when I'm hiking, and sometimes come home with solutions to problems). Equally, though, I may get deep into an intriguing problem, and find myself working 'til midnight or beyond.

The main thing I miss, honestly, is the commuting, because I did most of that by bike.


After reading the study, I found the random selection of people willing to participate not random at all. It states "Approximately half of the employees (508) were
interested. Of these, 255 were qualified to take part in the experiment by virtue of having at least
six months tenure, broadband access and a private room at home (in which they could work).
After a lottery draw, those with even birthdays were selected to work at home while those with
odd birthdates stayed in the office to act as the control group. The home and office employees in
each team had to work the same shift because they worked under a common team manager. The
two groups also used the same IT equipment, faced the same work order flow from a common
central server, and pay system. Hence, the only difference between the two groups was the
location of work."
What it fails to take into account are the other 50% that were not interested in working at home. Is there a perception bias at play here? In other words, did those that want to work from home have some additional incentive to be "interested"? And if so, does a 12% increase in performance mean that much if there was already an incentive?


Nick Bloom

Great point - the 13% higher productivity was only among people that volunteered. Interestingly after the end of the 9 month experiment the firm declared working from home a success - they calculated they save about $2000 per employee at home - and rolled it out to the entire firm. At that point a lot of people changed their mind - about 1/2 of the original volunteers stopped working from home, and about 10% on the non-volunteers went home.

Looking at this subsequent well-informed volunteer group (those that are working-from home after seeing the experiment) they work about 25% better. So it looks like working from home plus choice is the best of all worlds. It works very well for some people and not for others, and if you have motivated employees that can choose you get fantastic outcomes.

Certainly, for CTrip allowing working-from-home has been a great business decision saving them many millions of dollars a year. So much so they are now actively encouraging as many employees as possible to do this. Another firm - JetBlue in the US - similarly has had tremendous success with working from home.




john robin

tom Morton presenter on BBC Scotland does broadcast from his home in the Shetland islands as does a veteran dj on radio 2


If the cost of gas gets a lot higher or if we start to get serious about reducing greenhouse gas, I'd see telecommuting to gain in popularity. Why spend an hour or two driving to work everyday when you can put on your bunny slippers and walk over to your home office?

Nick Bloom

Absolutely - in China there is another issue around developing inland parts of the country. Working from home allows people to live much further away from the office and commute long distances on the rare occasions they come in.

As US example was JetBlue that had call-center operatives come in only once a month. As a result people could live far-away from the office in nice local communities, and that made it possible for them to recruit amazingly high-quality people for the job. You could also use this to move more Government jobs out of DC and into regions that would really benefit from them.



RJ Roy

When I first heard Paddy butting in, I actually thought for a bit that the joke was going to be that Tess actually WAS recording from home, especially with distractions having just been mentioned!

Genevieve Comtois

I do work from home! I love it but I need to get out at least once a day to meet peoples and keep an overall good productivity. If I ever hired employees, I would like them to work in their home too and grow some kind of invisible business with a web of apartment linked together!

Eric Smith

Not all jobs are equal when it comes to working at home. Call center workers are very different from knowledge workers. The software company I work for benefits from having a group of talented people in the same room, where they can talk to their peers when they have a good idea. Bumping into someone in the hall who can contribute to some idea that is bouncing around your head is incredibly valuable. My company has two main offices, one in the SF Bay Area and the other on the East Coast. Every time I visit the other office I get a huge benefit from just random conversations with people I don't see that often.

On the other hand, a day or two at home to concentrate without disturbances can be very valuable. Home is very distracting to me so its hard to be productive. On the other hand, not having a 35 minutes each way commute would really improve my life.

Nick Bloom

Yes - interestingly it turns out working-from-home is concentrated among lower-paid jobs like call-centers and higher-paid jobs like management and software. Middle-paid jobs have very little (see page Figure 1b, page 31 ).

So you are right there are two different types of jobs, and our study only looks at lower paid jobs. Having said that in my current job as a professor, and previously in consulting and government, I worked from home 1 or 2 days a week and it worked well. I think best-practice workplaces generally do let self-motivate managerial and team-based employees work from home, but more like 1 or 2 days per week.




For a couple of years I worked at a 5min bicycle ride from work, allowing me to have lunch with my wife at home, sleep in and still get to work on time and be home early. My quality of life had greatly improved compared to the 2 hour commute/day I used to endure.

I chose to go back to my old job though. Working at home 1 day a week and a company car sounded like a good compromise. Boy was I wrong.

The stress that comes with the traffic and the horrible depressing location our company is located at, getting up early to still arrive late at home and spending your lunch breaks at your desk with a gas station sandwich, ... I'm not sure what I was thinking. It does seem you forget the bad things quickly.

I do have that one Thursday though. It makes my Wednesday evening more relaxing not having to worry about next morning's commute. And no distractions except the occasional cat jumping on my keyboard, make me a more focused and happy developer. And happy developers do produce better work. I've tried to convince our management of all the benefits for both parties, but without success.

Even though the company could save on cars and fuel (which they pay every employee, as without these not a lot of people would even consider working at this location) and while they could even get rid of remote offices which are barely (allowed to be) used, management still only sees working at home as an employee benefit.

As mentioned here before, gas prices will change their point of view some day. But before they are convinced that the commute costs exceed their imaginary work-at-home productivity loss, I think we'll be stuck on the road and in our depressing fluorescent lit offices for quite a bit longer...


Kent Geek

The cake is a lie

John Arenas

I listened with great interest, especially about the adverse health effects of long commutes.
While Chinese call center employees may be more productive at home, most US knowledge workers consistently identify home officing with isolation, lack of peer equity, poor work-life balance. Many suffer through these challenges, to enjoy benefits of flexibility and to avoid time-wasting commutes.

The workplace option your comments did not consider is to work close to home, in a productive, secure and engaging and greener workplace that is approved by an employer.

At SerendipityLabs we are providing walk-in workplaces on a membership basis, to professionals and other knowledge workers, who now choose to enjoy the best of both worlds, while lowering costs for their employer.


One thing this study doesn't measure is the long term effects on the worker - having worked from home for over a year, after a few months of really enjoying it, I began to miss the variation of an office, and the fact that in an office, you have to get dressed and speak to real life people, are really healthy things.

However, I guess a call centre job is different, as you're not really speaking to those around you much anyway.

John Arenas

Remember when Home Officing wassupposed to be the “future of work”? It was going to redefine work and transform the quality of our lives. But after 20 years of expectation, it hasn’t happened. Why?

Today, less than 2% of US knowledge workers report working from home full-time, and a majority, when given the option, say they would rather not. Even two recessions, which spawned countless corporate work-at-home initiatives, did not prove to be a catalyst for change, despite the potentially huge real estate cost savings to corporations.

for more about the future of the workplace and the nacient Distributed Work Era...


Thank you Stephen for the interesting thought