New Study From Harvard Shows the Benefits of Working From Home
A few years ago, Alex Craig dialed in to a conference call with no one on the other line. Craig, who was working from home, shrugged his shoulders, picked up his guitar and immediately forgot the phone’s video and audio functions were on. He figured he’d practice “I Dreamed A Dream” from the Les Miserables soundtrack while waiting for his coworkers to show up.
By the end of the song, he looked up and realized six of his coworkers were on the other line, bug-eyed and listening to him.
“So that was a pretty embarrassing work-from-home moment,” he said. “I’m a pretty bad singer.”
Benefits of working from home
- Remote work can increase real income
- Remote work can help companies retain high performers
- It provides more flexible work options
- Remote work can also increase productivity
Today, Craig is a pro at working outside of the office. As head of presales for Vuealta, a consulting firm headquartered in London but with a small U.S. office in New York, Craig works from home in Chicago. Or rather, he works remotely — a distinction he is careful to make.
Working from home is kind of a misnomer.”
Craig wakes up around 6:30 a.m. and, two hours later, he might be in a coffee shop, sending out emails to colleagues to remind them that he’s remote but plugged in. At 10 a.m., he might have an internal company call, to which he likes to phone in while walking around the scenic fields of Lincoln Park. After that, he likes to visit the offices of Anaplan — Vuelta’s partner company and Craig’s former employer — and spend the rest of his day taking advantage of the free conference room and white board, and chatting up old coworkers.
“I think working from home is kind of a misnomer,” Craig said. “I do work from home sometimes. But sometimes I work while I’m walking about the city, other times from a coffee shop. And then to really take advantage of being remote, sometimes I’m leaving Chicago in the winter and going to LA and finding an Airbnb for a week there. So I tend to work a lot of places, not just home.”
For a growing number of tech workers at companies with work-from-anywhere policies, Craig’s lifestyle might sound familiar. A 2017 Gallup poll found that 43 percent of working Americans spent at least some time working remotely — up from 39 percent the year before — and U.S. Census data released in 2018 reported that 5.2 percent of U.S. workers were not based in an office, working for firms like Vuelta, SAP, GitHub and more.
Working from home vs. working from anywhere
Every company’s remote work policy is different, but it can be helpful to distinguish between work-from-home and work-from-anywhere policies. In general, employees who work from anywhere are not bound by location restrictions or required to report into an office regularly — if ever. If a company is headquartered in San Francisco, staff could live and work in Minnesota or Kansas, if they choose.
Those who work from home, however, generally need to live within commuting distance to the office and report in-person on a regular basis. This can often lead to employees clustered around major cities like New York, Chicago or Seattle — but not necessarily close enough for a daily commute.
It’s worth noting, however, that many companies use these terms differently — or even interchangeably. So when in doubt, it’s always best to ask for details about a company’s specific remote policy.
Remote work can increase real income and employee productivity
In June, Prithwiraj Choudhury, an associate professor at Harvard Business School, published a working paper that he and his fellow authors say is the first of its kind to study the impact of working-from-anywhere.
“The effect was an increase in real income [for remote employees],” Choudhury said, adding that much of the increase was driven by living in areas with lower housing costs. “That makes people really happy, and that happiness and motivation possibly translates to productivity.”
The Harvard study focused on federal employees. But Choudhury said the research has implications for those in the tech industry too. Working-from-anywhere policies can widen a company’s talent pool and help organizations save on real estate costs, he said. Senior employees with jobs that allow them a high degree of independence could be a good fit for working from anywhere, Choudhury said, regardless of whether they work for a public or private agency.
In “(Live and) Work from Anywhere: Geographic Flexibility and Productivity Effects at the United States Patent Office,” Choudhury and his fellow researchers followed 600 patent examiners' work for a year and found that those who worked from anywhere reviewed 4.4 percent more applications than those who simply worked from a home near the office. Those who worked from anywhere only reported in to the office a few times a year, while those who worked remotely needed to live within 50 miles of the bureau and come into the office once a week. The quality of these employees’ work was at least as high as those working in — or near — the Alexandria, Virginia-based headquarters, and Harvard estimated the practice saved $1.3 billion in federal funds.
A person only really needs a computer and access to the internet.”
Lara Owen, director of workplace operations at GitHub, said the Harvard study reaffirms what the software development platform provider has always known: that allowing employees to work from anywhere drives productivity.
“There are more and more companies that are adopting this way, realizing the entire talent pool isn’t in San Francisco, or New York, or one of the major cities,” Owen said.
“I think with the technology we have, and where it’s at, and where it continues to grow, we’re going to be able to access more and more talent. A person only really needs a computer and access to the internet to be able to get a job.”
Moving from ‘presence prisons’ to measuring incomes
When GitHub's founders launched the company in 2008, they believed the best way to run the software development platform provider was to allow the majority of its employees to work remotely. Over the years, GitHub has noticed that remote workers’ happiness tends to “skew slightly over” those in the office, Owen said. She added that GitHub’s retention of remote workers has been “pretty great.” And the firm has realized an additional business benefit.
“It’s meant that we can enter countries a lot sooner because we don’t have to open and establish an office,” Owen said. “It’s allowed us to be more agile on the business side.”
Of GitHub’s 1,200 employees, Owen said about two-thirds work from wherever they please.
It’s allowed us to be more agile on the business side.”
In 2018, 43 percent of those workers were based remotely in the U.S. — with 34 percent scattered around the San Francisco hub — and 22 percent were located abroad, according to company data. That year, nearly half of all GitHub employees worked from home offices, and an additional 10 percent worked from coworking spaces.
GitHub offers remote workers a $1,400 stipend to outfit their home offices with ergonomic furniture, or to join a coworking space. The firm also uses a transparent, tiered salary scale to compensate remote staff, paying an engineer in San Francisco more than one living in, say, Minnesota.
“Always do a cost-benefit analysis,” Owen said. “You can convince your CFO, ‘Here’s how much it costs to open and operate an office, instead of here’s how much it costs to hire people anywhere in the world.’ You’ll get your CFO on board pretty quickly.”
Owen said GitHub’s management sees its work-from-anywhere policy as a way of actualizing the company’s values of flexibility and autonomy by trusting people to get their work done from wherever they choose. The firm makes these tenets clear to new hires, she said, and during interviews clarifies whether an employee would be expected to report into an office or remain remote.
By calibrating expectations, Owen said GitHub avoids creating an “us versus them” divide between remote and in-office staff. She said it helps that GitHub also makes a point to focus on employees’ individual results, rather than simply look at the number of tasks they complete in a day.
“That’s helped us move us away from what I like to call ‘presence prisons,’ or the idea that if your manager can see you at your desk, you’re contributing,” Owen said.
It’s not for everyone
Working outside the office doesn’t come entirely without its challenges, however.
After Craig finished his bachelor’s degree, he said he got his first job at PricewaterhouseCoopers in New York, which allowed him to choose when he wanted to work from home or go into the office. Craig was working as an actuary — and studying for his actuarial exams at the time — and spent much of his time working from home, figuring that by avoiding a long commute, he was able to clock more working minutes into the day. Now, he said he wishes he had spent more time in the office early in his career.
“If you have an office, you should take advantage and really get that face time with the people you work with. There’s a lot you’ll learn at the office and I just think in the long run, you’ll be more successful, and viewed kind of reliably,” Craig said.
He added: “You're just visible. So when people think about, ‘Who do we want to give this project to, or who's been working hard,’ you just sort of come to mind. There's definitely a perception angle to it as you're trying to kind of mold your reputation.”
Companies like Yahoo, Bank of America and IBM have all publicly renounced remote work policies, arguing along similar lines that working together drives employee creativity and provides invaluable learning opportunities.
The Harvard study is careful to emphasize a similar point: working-from-anywhere may make the most sense for those already experienced in their professions. By allowing senior patent examiners to work from anywhere, the organization was able to retain employees a few extra years before retirement.
Now that he’s further along in his career at Vuealta, Craig said he has figured out how to work best from wherever he may be.
Before going to bed, Craig makes sure to develop a plan for the first few hours of the next day, writing out when he wants to start work, if he plans to get coffee and what he intends to achieve. This way, he said, he avoids decision fatigue when he wakes up. He said he likes to plan his day in increments of just a few hours, so he has time for unexpected items that emerge.
“You have to be more deliberate about setting time limits, understanding what you want to accomplish and when you want to start and stop,” Craig said.
You have to be more deliberate about setting time limits.”
He said he believes companies should lay out their expectations early for how they expect those working from anywhere to spend their days, and tell remote workers to take advantage of the flexibility the practice provides. When companies don’t tell remote workers that it’s OK for them to run to the post office or schedule a doctor’s appointment during the day, he said workers can feel shame about running errands, even though many office-based employees make room in their day for similar items.
“By laying out the expectation, and the things you do gain from being remote, maybe people would feel more comfortable being upfront about these things, and not trying to kind of hide them in their day,” Craig said.
Remote work can help companies retain high performers
Those challenges notwithstanding, many companies report that their remote employees are both happy and productive.
Dan Healey, vice president of human resources at SAP, said that, of the approximately 23,000 North American employees working at the enterprise software provider, about 33 percent work from home. Among SAP’s field-based employees, about 50 percent work outside the office. These employees are more likely to be located across the country, away from company hubs in New York, Boston, Chicago and elsewhere.
“When they do come in, it’s like one or two Fridays a month,” Healey said.
SAP codified its remote work policy in 2015. Called FlexAppeal, the policy basically states that employees can arrange when and where they work on their own schedules.
The firm’s sales reps, consultants and other field employees have been operating under this philosophy for at least a decade, he said. Four years ago, SAP’s office staff called for a formal remote work policy, too — previously, employees had to ask individual managers and see what work styles they preferred.
Since implementing FlexAppeal, Healey said SAP has found that workers with flexible options were 13.5 percent more productive than those confined to an office.
Healey also credits FlexAppeal with driving recruitment and retention. This year, 88 percent of North American employees agreed that they “valued and appreciated” SAP’s culture in an internal company survey, up 2 percent from the year before, according to the firm. He also noted that employees awarded SAP’s work environment and culture the highest marks ever this year.
“There’s a very healthy economy in the U.S. right now, a lot of choices for our colleagues and employees on where they work,” Healey said. “We want them to exercise that choice and maintain the strong engagement with SAP that we need.”
Flexibility is key
Craig said he doesn’t find working from his kitchen island inherently better than working from a cubicle — both have their pros and cons.
“I think the happiest workers have the office to go to, but the flexibility and trust to work remotely when they need to,” he said.
The key for managing remote workers, he said, is to understand their needs. As an extrovert, he knows that he needs to be around people and designs his remote work life around that, by calling friends when he needs a break or visiting a coffee shop.
Ultimately, he said feeling invested in his work makes it easier for him to work outside of the office.
“If you’re not interested in your work or you don’t know why you’re doing something, it becomes really hard not to go for a work out, not to call a friend or go get coffee again,” Craig said. “It’s easier to work remotely if you’re invested in your job and the company’s work.”