A groundbreaking randomised controlled trial published in Nature, a leading academic journal, has provided valuable insights into the hybrid work model, demonstrating its potential to enhance job satisfaction and reduce employee turnover compared to traditional five-day office workweeks.
The longstanding debate over the impact of remote work on productivity and employee performance has reached new heights with this study. Executives advocating for a return to the office often cite concerns about diminished worker output and a decline in workplace culture. However, new research by Stanford University economist Nicholas Bloom and his colleagues presents compelling evidence in favour of hybrid work arrangements. Conducted at a Chinese tech firm, the study revealed that a hybrid model—comprising two days of remote work and three days in the office—significantly reduced quit rates, improved job satisfaction, and did not negatively impact performance metrics.
Bloom emphasises the significance of the study’s publication in Nature, stating, “Everyone’s heard of Nature.” He adds that having a large, randomised controlled trial offers substantial weight to the argument for flexible work arrangements, making it more challenging for CEOs to dismiss the findings.
The study involved 1,612 employees at Trip.com, a global travel company, who were randomly assigned to either a hybrid work schedule or a full-time office schedule based on their birthdates. The hybrid schedule participants, working from home on Wednesdays and Fridays, exhibited a one-third reduction in attrition rates over six months. This effect was even more pronounced among non-managers, female employees, and those with long commutes. Job satisfaction scores improved for the hybrid group, while performance reviews and promotion rates showed no significant differences compared to the full-time office group. Notably, software engineers’ productivity, measured by the volume of code submitted, was similar across both groups.
The study’s robust methodology, which utilised random birthdate assignments, allowed the researchers to confidently attribute improvements in retention and job satisfaction to the hybrid work schedule rather than external factors. “In many studies you don’t [have that],” Bloom explains. “There are no differences between people born on even and odd birthdays.”
While the study did not explore fully remote work or employee-driven flexible schedules, it provides substantial evidence supporting the benefits of hybrid work arrangements. Bloom and his co-authors acknowledge potential concerns that the full-time office group’s higher turnover could stem from dissatisfaction with their lack of flexibility. However, turnover rates for this group were slightly reduced compared to the period before the experiment, suggesting an expectation of future policy changes.
The study also observed a shift in managerial perceptions of hybrid work. Initially, managers believed hybrid work would reduce productivity by 2.6%. By the end of the experiment, they perceived a potential productivity increase of 1%, highlighting the value of empirical experimentation.
This study adds to the ongoing discourse on remote work’s impact on corporate culture, employee productivity, and potential challenges to innovation and collaboration. Bloom, a long-time remote work researcher, previously stirred debate with findings that fully remote workforces might experience slightly reduced productivity. However, well-managed hybrid schedules showed neutral or slightly positive effects on productivity.
Previous research by Bloom on Trip.com’s remote call centre agents found a 13% productivity increase and a 50% reduction in turnover with a hybrid model. The recent study expands this research to include professionals in marketing, software engineering, finance, and accounting, addressing concerns about generalisability to higher-skilled roles.
Trip.com pursued this experiment to reduce costs, estimating a $20,000 expense per employee turnover. The success of the hybrid model led the company to extend this policy to all employees. “There are good and bad things about working from home, but it turns out with hybrid they roughly net each other out,” Bloom concludes. “Employees were dramatically happier if they get to work from home two days a week, and as a result their quit rates fell by a third. … The company looked at this and said, ‘what’s not to like?’”