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[Study] A Major Corporation Let Employees Work From Home; Led to a 13% Increase in Productivity

As the popularity of work-from-home arrangements continues to soar, it begs an important question — what actual impact does working from home have on employees and employers? Most importantly, is it a net benefit to an organization to allow work-from-home options?

To be sure, there has been a flurry of study on the topic. We just ran across one of the most definitive studies on the topic that seemingly puts the question to rest. It revolves around a Chinese company called Ctrip.

Unless you live in China or are an investing guru, it’s doubtful you’ve heard of Ctrip. The company is the Travelocity of China. It’s an online travel-booking website for flights, hotels, and vacations. Despite being located in China, the company’s stock trades on the NASDAQ and it employs roughly 16,000 people.

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Ctrip employees a small army of call center employees. These are the sort of jobs that can make perfect work-from-home positions. And in fact, the company was interested in converting these positions to WFH as a way of controlling office costs (which were soaring in Shanghai) and improving its employee retention rate. Before it rolled out the program, Ctrip wanted to test the arrangement with a smaller portion of its workforce to study what would happen.

That’s where Stanford University got involved. Researchers at Stanford worked hand-in-hand with Ctrip to create a randomized test and track the results.

In total, the nine-month test covered 249 employees (of the more than 500 whom expressed interest in being selected). Those with odd-numbered birthdates were a control group, staying in the office and working as normal. Those with even-numbered birthdays were selected to work from home.

The results were significant. Within the work-from-home group,¬†productivity¬†increased 13% versus the control group. Nine percent of that increase came from more minutes they worked during their shifts, through fewer breaks, less time off and fewer sick days. The remaining 4% came from more calls per minute worked. These home workers also reported “substantially higher work satisfaction and had more positive attitudinal survey outcomes.” They also quit at much lower rates than the control group.

What about the company? According to the study…

The firm improved total factor productivity by between 20% to 30% and saved about $2,000 a year per employee WFH. About two thirds of this improvement came from the reduction in office space and the rest from improved employee performance and reduced turnover.

In fact, Ctrip went on to offer work-from-home option company-wide following the results of the test. There, they saw even larger gains in productivity — 22% vs. 13%.

But the study did uncover a couple of peculiar findings. First, those employees working from home were promoted about 50% less than in-office workers. Second, of those employees working from home, half opted to return to the office following the experiment. Meanwhile, two-thirds of those in the control group (who had originally volunteered to work from home) stayed in the office. Both groups cited “lack of social contact” as the major reason for their decision.

This groundbreaking study added some hard science behind many of the anecdotes we’ve all heard. It proves that — at least in this case — productivity can increase with working from home. At the same time, companies can use it as a lever to increase employee satisfaction and reduce turnover. Still, there are major obstacles for WFH employees to overcome as the option increases in popularity as it relates to career advancement and the social aspect of work.

Here’s a video about the study from John Roberts at Stanford, who led the study:

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