Is This the Smoking Gun for Hybrid Work?

Most corporate executives pride themselves on their adherence to evidence-based management. Decisions on where to establish a branch plant or retail outlet, how to upgrade operations, whether to acquire a competitor and countless other moves are backed by carefully parsed data and trusted strategic intelligence.

That commitment to evidence seems to waver when it comes to managing human resources. This is seemingly one way to interpret the fiat from many large organizations, from Boeing to UPS, that workers return to the office full time. Leaders seem more confident in what they view as common sense — that working from home damages productivity, innovation and career development — than what the evidence actually says.

One firm has taken a different approach. Trip.com, a global travel agency based in Shanghai, saw how popular hybrid working is in other parts of the world and decided to find out if it was right for them. Hybrid schedules, where individuals spend parts of their working week in home offices, are used by an estimated 100 million employees in North America and Europe.

Trip.com paired with researchers from Stanford University, Shenzhen Finance Institute and The Chinese University of Hong Kong to conduct a rigorous six-month investigation into the causal effects of hybrid working. More than 1,600 Trip.com managers and workers were randomly given the option of either working from home on Wednesday and Friday and from the office on the other three days, or coming into the office on all five days. All the participants were university-graduate employees in software engineering, marketing, accounting and finance, working mainly on creative team tasks. 

The results were published in Nature, considered the world's leading multidisciplinary science journal. 

Hybrid concerns set aside

If not the final word on the subject, this study provides compelling evidence that should allay concerns about the impact of hybrid working on organizational performance.

First, the researchers found that hybrid schedules reduced quit rates overall by one-third; the reduction in attrition was even greater for female employees (54 per cent reduction in quit rates), those with long commutes (52 per cent reduction) and non-managers. In a related metric, those in the hybrid group reported significantly higher job satisfaction and work-life balance.

Second, to determine the impact of hybrid work on performance, the researchers examined four measures: six-monthly performance reviews and promotion outcomes for up to two years after the start of the experiment; detailed performance evaluations (which are carefully conducted at Trip.com); and data on the lines of code uploaded each day by the computer engineers. They also collected self-assessments from participants to evaluate employee perceptions of their productivity.

The researchers found no difference in performance reviews or promotion rates between the hybrid group and control group. Nor was there a difference in productivity: There was no significant change in the number of lines of code written by the computer engineers working hybrid schedules.

One aspect that did change was the perception of hybrid work. Before the start of the experiment, the 395 participating managers on average believed hybrid work would affect productivity by minus two per cent, while non-managers had more positive views. After the experiment, the views of managers increased to plus one per cent, closing the gap with non-managers.

The right focus

There have been many other studies on working from home, some of which have shown negative outcomes. But they usually have been based on workers who are fully remote and working on independent tasks such as data entry or call processing. It is estimated, however, that 70 per cent of individuals working from home do so just a few days a week. This new study looks only at hybrid arrangements and knowledge workers collaborating on teams.

Are these results enough to convince leaders to back off their insistence that employees return to the office full time? Debatable. It seems the more prudent path is to follow the advice of Jana Raver, of Smith School of Business. People do not want to go back to the inflexible working conditions pre-COVID, she says, but they do want to address some of the shortcomings of working outside the office and away from colleagues. 

Raver challenges leaders of knowledge workers to engage in intentional thinking that considers: “When do we truly need to collaborate, either co-located or as a hybrid group? When must we focus on individual work? How do we carve out time and space for both?”

Leaders at Trip.com are certainly sold on the value of hybrid work. Once the study was completed and they saw that working from home for part of the week did not undercut performance, they decided to extend the hybrid option to all employees in all divisions. As the researchers note in their Nature paper, each employee who quit cost Trip.com approximately US$20,000 in recruitment and training; a one-third reduction in attrition for the firm would generate millions of dollars in savings. It all adds up.