The Cheat Sheet

When ‘work from home’ works, and when it doesn’t

Venky Vembu | Updated on April 23, 2020

I hear it’s now called ‘shirking from home’…

You may well jest. The concept of ‘working from home’ (WFH, or telework) predates the Covid-19 pandemic; Indian IT companies have been experimenting with it for long to arrest employee attrition. But it looks like the current WFH compulsion — as a stop-gap response to the virus outbreak — may translate into a more permanent arrangement, at least in some sectors. But such a proposition has both upsides and downsides, for businesses and for employees.

I thought people liked working from home.

It may seem so. For one thing, employees are spared mind-numbing commutes, and get what is seen as a better work-life balance. But the entire discourse around WFH is framed in a way that does not adequately factor in the hidden costs that employees bear.

And what costs are these?

We’ll come to that in a bit. First, let’s look at the perceived upside to WFH. In a research paper titled Does working from home work? Evidence from a Chinese experiment, published in the February 2015 edition of The Quarterly Journal of Economics, economists Nicholas A Bloom (at Stanford Graduate School of Business) and others reported on an experiment conducted on the efficacy of WFH as a management practice. The ‘randomised control trial’ was carried out over nine months by Ctrip, one of China’s largest travel agencies, at its Shanghai call centre. It yielded startling results.

Tell me more.

First, WFH improved productivity by 13 per cent: that came mainly from a 9 per cent increase in the number of minutes they worked during the shift; the additional 4 per cent gain came from home workers increasing the number of calls per minute worked, which they attributed to the ease of WFH. Additionally, there was a 50 per cent fall in attrition among home workers, who also reported higher work satisfaction. The firm too gained: its total factor productivity improved by 20-30 per cent, and it saved about $2,000 a year per WFH employee.

So, it’s a win-win proposition?

Yes, but with some caveats. Based on the experiment, Ctrip offered the WFH option to the entire firm, but over half the members in the first experiment, particularly the poor performers, said they now preferred to work from office. In any case, Ctrip saw a 22 per cent rise in productivity of WFH employees.

So what’s the downside?

More recently, however, Bloom has noted that the compulsions of WFH during the Covid-19 lockdown could drain corporate and academic productivity and innovation over the medium term. His research from 2017 established that “face-to-face meetings are essential for developing new ideas” and he now fears that a “collapse in office face time will lead to a slump in innovation.”

And what are the ‘hidden costs’ for employees?

In a 2015 paper Work from Home: A Boon or a Bane? The Missing Piece of Employee Cost, published in the Indian Journal of Industrial Relations, IIM-A professors Dharma Raju Bathini and George Kandathil note that the discourse around WFH as an “employee benefit” helps companies legitimise odd and long duty hours that go even beyond legally specified limits. WFH, they note, puts pressure on employees to work both odd hours and longer hours — seemingly “to reciprocate for being allowed to enjoy the benefit of work from home.” The WFH discourse must be expand to include “employee costs, particularly work intensification,” they conclude.

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Published on April 23, 2020

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