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)

 


Coopers_Dad

How do the home-based workers respond, in terms of motivation and compensation expectations, to the knowledge that each office-based colleague's hour of work equals 75 minutes of their home-based work, using the 25% productivity gain that Ctrip reported? Would the home worker start to rationalize a 48-minute work hour to equalize his effort to that of the office worker? Or demand a 25% pay raise??

Another means to combat office-based distractions might be to spend more on private offices or taller cubicle walls (or simply office etiquette training) to reduce the counter-productive conditions so commonly found in the office. A ban on those "bagels in the kitchen" and "Come gather at the boss's desk to give him his birthday card" interruptions would surely raise productivty more than it would reduce morale!

Stephen

When our firm closed my co-workers and I decided to start on our own from our homes. While we could take jobs for less and remain busy due to the lower over head of not renting a building and so on, we also get less benefits such as insurance, vacations, sick days, and holiday pay ti name a few. On top of that there is extra work now that we don't get paid for at all such as invoicing and book keeping. While I don't miss driving to work or worrying about being late, there are down sides as well. For one there are less of us working than there were before and we now pay more in taxes. Now if a company could provide you great benefits while allowing you to work at home, that would be the best of both worlds. The podcast is right though. It took me some time to adjust, but I get way more done at home than I did in the office.

Shir Yee Wong

I stay in Singapore and I am working from home for a month now since I started my firm. When I was working in my ex- company, I thought I could do more from home than at a cubicle from 9 am to 9pm. Yes, I am doing more from home. But I miss the time with my colleagues, gossiping about fashion and grapping lunch together. It takes time to adjust to a new lifestyle, I got stressed up for awhile. Now, I am taking 2 days off getting lunch with a friend or going to the gym.

There are few factors that will make work from home work efficiently for me:
1) Motivation
2) Have a schedule and stick to it
3) Cost effectiveness ( I saved alot on transportation and expensive lunch)
4) Take a break and socialize

paul laboi

Hello Nick
Interesting study. My questions are twofold
1. Have you studied the charecteristics of people who made the choice to work from home?
2. Is there a statistical method to prove the difference in outcomes (productivity, quality of life) when it is not possible to have two groups(active choice vs office group) without introducing bias.
I am sorry my knowledge of statistics is limited and my interest in this story stems from my work in introducing self care in health systems. Happy to discuss further if you are interested.
kind regards
Paul

Noname

I would say it depends. If making sales calls or creating reports, working from home is feasible. If workers are engineers where interaction is needed, working in an office is required.
Smart companies should balance between the two. Give employees flexibility and encourage coming to the office by offering perks ( ask google)