Stanford’s Nicholas Bloom Advises Managers to Decide Which Days Their Teams Work from Home

By TAP Staff Blogger

Posted on August 13, 2021


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It’s clear that as the U.S. economy reopens after Covid precautions that many organizations will be pursuing a hybrid future in which employees work from the office some days and at home on other days. While some managers may be inclined to let employees choose their schedule, the author recommends not pursuing this approach for two reasons. First, is the challenge in managing a hybrid team, which can generate an office in-group and a home out-group. The second concern is the risk to diversity.
- Nicholas Bloom, from his article “Don’t Let Employees Pick Their WFH Days”

 

Nicholas Bloom, Stanford University Professor of Economics, has been researching the benefits and challenges of working from home (WFH) since 2015.

 

Back in 2015, along with colleagues James Liang, John Roberts, and Zhichun Jenny Ying, Professor Bloom conducted a 9-month working-from-home experiment with Ctrip, China’s largest travel agency. The resulting report, “Does Working from Home Work? Evidence from a Chinese Experiment,” published in the Quarterly Journal of Economics, called attention to several benefits of working from home. A few key takeaways: the experiment led to a 13 percent increase in performance and a 50 percent drop in employee-quit rates. It was so successful that Ctrip rolled out working from home as an option for the whole firm.

 

Fast forward six years, the global pandemic has numerous organizations well established with working-from-home systems and routines for their employees. In May 2020, a few months after many countries and states began issuing “stay-at-home” orders, Professor Bloom joined with Jose Maria Barrero, Instituto Tecnológico Autónomo de México (ITAM), and Steven J. Davis, University of Chicago Booth School of Business, to establish the Survey of Working Arrangements and Attitudes. This research group was formed in response to the dramatic impact of COVID-19 on the economy and working arrangements. The professors and their colleagues conduct monthly online surveys to collect detailed information on WFH challenges and benefits.

 

In “Don’t Let Employees Pick Their WFH Days,” Professor Bloom shares findings from his research data about the future of working from home as COVID-19 restrictions begin to lift. “I’m finding that about 70% of firms, from tiny companies to massive multinationals like Google, Citi, and HSBC, plan to move to some form of hybrid working.” However, he raises a controversial question, how much choice should workers have in determining the specifics of their WFH logistics?

 

Below are select excerpts from “Don’t Let Employees Pick Their WFH Days” by Nicholas Bloom (Harvard Business Review, May 25, 2021).

 

Who Wants to Continue to Work from Home, Who Wants to Return to the Office

 

On the one hand, many managers are passionate that their employees should determine their own schedule. We’ve been surveying more than 30,000 Americans monthly since May 2020 and our research data shows that post-pandemic, 32% of employees say they never want to return to working in the office. These are often employees with young kids, who live in the suburbs, for whom the commute is painful and home can be rather pleasant. At the other extreme, 21% tell us they never want to spend another day working from home. These are often young single employees or empty nesters in city center apartments.

 

Key Concerns for Managers

 

One concern is managing a hybrid team, where some people are at home and others are at the office. I hear endless anxiety about this generating an office in-group and a home out-group. For example, employees at home can see glances or whispering in the office conference room but can’t tell exactly what is going on. Even when firms try to avoid this by requiring office employees to take video calls from their desks, home employees have told me that they can still feel excluded. They know after the meeting ends the folks in the office may chat in the corridor or go grab a coffee together.

 

The second concern is the risk to diversity. It turns out that who wants to work from home after the pandemic is not random. In our research we find, for example, that among college graduates with young children women want to work from home full-time almost 50% more than men.

 

This is worrying given the evidence that working from home while your colleagues are in the office can be highly damaging to your career. In a 2014 study I ran in China in a large multinational we randomized 250 volunteers into a group that worked remotely for four days a week and another group that remained in the office full time. We found that WFH employees had a 50% lower rate of promotion after 21 months compared to their office colleagues. This huge WFH promotion penalty chimes with comments I’ve heard over the years from managers. They often confided that home-based employees in their teams get passed over on promotions because they are out of touch with the office.

 

Professor Bloom’s Advice to Employers

 

I have changed my mind and started advising firms that managers should decide which days their team should WFH. For example, if the manager picks WFH on Wednesday and Friday, everyone would come in on the other days. The only exceptions should be new hires, who should come in for an extra office day each week for their first year in order to bond with other new recruits.

 

Of course, firms that want to efficiently use their office space will need to centrally manage which teams come in on which days. Otherwise, the building will be empty on Monday and Friday — when everyone wants to WFH — and overcrowded mid-week. To encourage coordination, companies should also make sure that teams that often work together have at least two days of overlap in the office.

 

Concluding Thoughts

 

The pandemic has started a revolution in how we work, and our research shows this can make firms more productive and employees happier. But like all revolutions this is difficult to navigate, and firms need leadership from the top to ensure their work force remains diverse and truly inclusive.

 

Read the full article: “Don’t Let Employees Pick Their WFH Days” by Nicholas Bloom (Harvard Business Review, May 25, 2021).

 

Learn more:

   

Nicholas Bloom is the William Eberle Professor of Economics at Stanford University, a Senior Fellow of SIEPR, and the Co-Director of the Productivity, Innovation and Entrepreneurship program at the National Bureau of Economic Research. His main research interests are on measuring and explaining management and organizational practices across firms and countries, and trying to use this to explain differences in firm and country level growth. He also works on innovation and IT, looking at factors that affect these such as competition, tax, learning and Government regulations. A third area of research is on the causes and consequences of uncertainty, arising both from one-off events like the 9/11 terrorist attack and the Cuban Missile crisis, and also from slower-moving uncertainty fluctuations over the business cycle.


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