UPDATED BY
Matthew Urwin | Sep 30, 2022

Workplaces certainly look different from what they were in 2015 when Stanford University economics professor Nicholas Bloom, a renowned work-from-home-advocate, published the paper “Does Working From Home Work? Evidence From a Chinese Experiment.” Evidence from the two-year, randomized working-from-home trial at Chinese travel agency Ctrip added up to a resounding “yes.” Bloom and his colleagues found that Ctrip call center employees who telecommuted were more productive than their peers in the office, and less likely to quit their jobs.

In response to the pandemic, many companies ended up with their own experiments with the benefits of working from home. Hybrid work, allowing flexibility with both in-person and virtual work, has become increasingly popular and changed the expectations of employees.

In order to retain talent, many companies today must consider allowing employees to work from home. An October 2021 Gallup’s State of the Workforce study conducted in May to June 2021 showed that 91 percent of employees desire at least some type of remote work. 

We asked three experts — Leanna Lee, founder of content marketing agency Lost Lass; Michael Pryor, head of Trello at Atlassian; and the aforementioned Professor Bloom — how working from home benefits workers and employers alike.

 

The Benefits of Working From Home for Employees

Working from home gives employees their commute time back and allows for a personalized workspace, among other advantages. When practiced correctly, the benefits of working from home are numerous and can lead to a healthier and more productive workforce.

Benefits of Working From Home for Employees

  • No commute
  • More autonomy
  • Fewer distractions
  • Customizable workstations
  • Travel opportunities

 

No commute

Not commuting, as Bloom and his co-authors note in their paper on working from home, can save employees an immense amount of time. The average American spends about 55 minutes, round-trip, commuting each day. In Bloom’s study, the group that worked from home normally spent an average of 80 minutes commuting in Shanghai.

Not commuting literally adds an hour to each day — and more than a week to each year — while saving employees from the hassles of traffic and train delays.

“I’m one of the lucky ones,” Lee said, of her commute — which consists of walking from her living area to her attic office. “It creates a sense of going to work without actually having to go anywhere.”

 

More Autonomy

“No one is busy their entire workday,” Lee said — but in an office, you’re often expected to “sit in one place for eight to 10 hours a day and at least look busy.”

Not so working from home, which Lee has done for most of her professional life. “You don’t have as much oversight,” she said. That means less micromanaging. At home, she can manage her own time, work when she’s most productive and take care of her mental health. She manages depression and anxiety, and in her part-time office jobs, she said, “there was just not much flexibility for disability.”

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Fewer distractions

For Bloom, this is important: He doesn’t recommend working from just any home. In the “Does Working From Home Work?” study, participants were only eligible to work from home if they had a home office and “exclusive quiet access to [it] throughout their working day.” (Bedrooms, for what it’s worth, didn’t count.)

A remote workstation like this, Bloom and his coauthors argue, makes home a peaceful workspace compared to the office, and bumps workers’ productivity up as part of the benefits of remote work.

Pryor sees the appeal of a private, quiet workspace too. “It’s easier to do deep work when you’re in a space that’s conducive to it,” he said. “Remote work can give you that.” So can a private office, though, or Atlassian’s “uber-silent” library.

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Customizable workstations

At home, Lee appreciates that she can create a personalized workspace — it doesn’t have to be contained, like a cubicle, and it doesn’t have to fit into a larger open office plan.

She’s decorated her home office with custom lighting, she reported, and she has an entire wall covered in Post-Its. “I’m a compulsive note-taker,” she said — so much so that her Post-Its sometimes overflow from the wall onto the window pane.

She also has a couch across from her desk, where she takes breaks when she’s stumped on a project. She likes that her office is a place where “I can not only be productive, but take a break from being productive.”

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Travel opportunities

“I really enjoy being able to take my work ... anywhere I go,” Lee said. “It just opens up an entire world to you, really.” Some people used the remote work flexibility enabled by the pandemic to work away from their home bases to visit family and friends or just explore new places.

Working in a radically different timezone from your boss can make it hard to communicate in real time — but it’s not impossible, especially if you prepare for the trip in advance. Lee, for instance, has family in the United Kingdom, and often visits for months at a time, enjoying the benefits of remote work all the while.​

Go Ahead, Tell Your Boss You Are Working From Home | Nicholas Bloom | TEDxStanford

 

The Benefits of Working From Home for Companies

Companies also have plenty to gain from embracing a work-from-home policy. Cutting down costs on office spaces and reducing employee turnover rates are a couple of the benefits of working from home that make this transition a worthwhile process for businesses.

Benefits of Working From Home for Companies

  • Recruiting boost
  • Smaller offices
  • Lower turnover
  • Improved productivity

 

Recruiting boost

Before Trello was acquired by Atlassian in 2017, Trello’s workforce was roughly 80 percent remote, working from homes across the country. Pryor noted that allowing remote work made recruiting much easier. When you list a job opening in New York, he said, most of the people applying already live in the city. Not so with remote positions, which can attract hordes of talented people living outside major tech hubs.

“There’s no limit on who can apply to the job,” he said. “You get more qualified candidates ... you essentially open the funnel.”

 

Smaller offices

Part of the reason Ctrip ran a work-from-home experiment in the first place, Bloom’s paper explains, was rent. The Shanghai real estate market was thriving, and the price of renting office space had skyrocketed. Allowing call center employees to work from home allowed Ctrip, in turn, to rent a smaller, cheaper office.

Leadership knew this would be a money-saver going into the experiment. By the end, they knew precisely how much it saved them: about $1,400 per year per remote employee in rent, IT support and other office-related costs.

Bloom doesn’t recommend taking this to the extreme and moving to a fully remote workforce, though. Sure, it would save a ton of money, but any inflexible arrangement has the potential to alienate employees. After all, when the Ctrip experiment ended, more than half of the remote workforce chose to start commuting again.

 

Lower turnover

Offering employees the option and benefits of remote work helps with retention as well as recruiting. In Bloom’s experiment, the group working from home quit their jobs about half as frequently as the group working in the office.

Pryor, too, has seen the retention benefits of working from home. “The ability to be flexible ... helps you,” he said. Often, when people leave a job, it’s not because they’ve found a better one. “Things that happen in life outside of work tend to pull people in different directions and make them choose to switch companies.” When employees can take their jobs wherever they go, they switch less often.

Millions of workers have left their jobs as a part of the Great Resignation. Lack of work-from-home flexibility is one of the many reasons why employees are quitting their jobs recently. Companies that offer the benefits of remote work flexibility stand to retain more talent.

 

Improved productivity

Bloom found that Ctrip employees who worked from home were roughly 13 percent more productive than their counterparts in the office — which means they did almost an extra day’s worth of work every week.

This could be because working from home shifts focus from “looking busy,” as Lee put it, to actual production.

“You have to focus more on the outcomes,” Pryor said.

But it’s not just individual employees that are more productive when they work remotely. The improved retention makes the whole company more efficient. Ctrip saved roughly $260 per employee per year on reduced turnover, Bloom and his colleagues found.

“That actually is a big productivity boost,” Pryor agreed. On a micro level, it means less contact-switching and confusion as people churn in and out of key roles; on a macro level, it means less spending on recruiting and onboarding.

To support employees with the benefits of working from home, it is important that companies invest in tools for collaboration and productivity.​

 

Alexandria Jacobson contributed reporting to this story.

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