Work-from-home scheme good for productivity

By Christopher Tan, The Straits Times, 24 Mar 2014

EMPLOYERS mulling over work-from-home schemes will invariably be burdened by doubts about the impact on productivity and cost. But going by the experience of Ctrip, China's largest travel group, they have little to worry.

In 2010, the Nasdaq-listed company conducted an experiment to quantify how a work-from-home programme would affect the company and its staff.

It opened the scheme to 994 employees in the airfare and hotel booking departments. Slightly more than half, or 503, volunteered for the experiment.

The exercise started on Dec 6, 2010 and lasted nine months.

The findings were quite astounding. As compared to a control group that stayed in the office, the work-from-home group showed a 13 per cent improvement in productivity - without affecting quality.

According to a review by the US National Bureau of Economic Research, the gain came mainly from an increase in the time spent working.

This was because there was no commuting time, no sick leave, shorter breaks, and a quieter environment at home.

On an annualised basis, Ctrip also found that it saved close to US$2,000 (S$2,500) per employee on average.

The company has since decided to roll out the experiment to all its 16,000 employees.

Interestingly, some of those in the first group had decided to return to work in the office environment, citing loneliness as one main reason.

They tended to be those who performed below average among those who worked from home. Without them, the productivity gain of the work-from-home cohort was actually 22 per cent - or the equivalent of an extra day worked.

Others worried that their promotion prospects would be hurt because they had less "face time" with their peers and supervisors, and for the same reason were missing out on training and mentoring opportunities.

On average, those who worked at home had 50 per cent less chance of being promoted, the experiment found.

Despite that, attrition was 50 per cent lower among the home workers, who also reported substantially higher work satisfaction - proof that it is not always money and position that make workers happy.

This is the first of 12 primers on various current affairs issues, which will be published in the run-up to The Straits Times-Ministry of Education National Current Affairs Quiz.