You have been added, without consent, into a global experiment.
An experiment that could lead to the end of the modern city, change how you live, and reshape the rest of your working life.
The COVID-induced remote work phenomenon has had a lasting effect companies across the globe.
We all have opinions and anecdotal stories (that time you thought you were on mute…) as to the positives and negatives of working from home, but way back in 2013, a Chinese firm, CTrip conducted a fascinating study.
Inspired by the brilliant Hidden Brain podcast linked at the bottom of the post, here are some insights for team leaders and members, alike.
Table of Contents
CTrip: a pre-COVID work from home experiment
Back in 2013, CTrip, a Chinese trip booking startup were desperate to grow. But, as with all young ventures, resources were scarce and allocating Dollars (oops, Yuan) effectively was crucial.
One significant resource allocation was office space for the team to work from and unsurprisingly, Shanghai office space turns out to be quite pricey.
As a startup trying to grow at lightening speed, every $ spent on rent is a $ not spent on tech or marketing.
So, the company decided to run a 9-month experiment.
Can we get staff to work from home and save on rent?
Of 1,000 customer support workers who volunteered to join the experiment, 500 were selected at random to work from home (WFH), the ‘unlucky’ 500 not selected, continued to come to the office.
CTrip expected to see a productivity decline amongst those working from home, but figured that they could still come out ‘up’ due to the rent saving per head.
The Results
Hypotheses are there to be disproved, and boy, did the results disprove CTrips.
The WFH group were 13% MORE productive than the staff back at the office.
Not only did CTrip save on rent (an estimated $2,000 USD per head), they had a significantly higher output, too.
Another huge upside was the reduction is staff quitting. The average quit rate fell from 50% to 25%, again saving the firm significant $ in hiring and training costs.
Employees had performance-linked pay, therefore, not only reducing their commuting time and costs, but also earning more.
With the firm enjoying higher productivity, and employees earning more, everyone scrambled to put in a WFH request, right?
Not quite.
The Twist
Following the conclusion of the study, half of the staff who had been working from home, asked to come back to the office.
Of the group who were previously in the office, only one third asked to work from home.
So, why were CTrip employees effectively asking to earn less, travel more, and be less productive?
There were fewer promotions in the WFH group despite their performances being more effective. Like it or not, it turns out a coffee break with your manager is still one of the key gateways to career progression.
We are still social creatures who place a large value on face time. Zoom has not yet evolved to encompass all of the sense that are stimulated during in-person meetings.
Work from Home: Challenges
The remote working shift is disproportionately benefiting highly educated workers, knowledge workers as they are often referred to as.
Poorly educated individuals tend to make up a large percentage of retail and service roles, roles that largely rely on being in a physical location.
Even amongst knowledge workers, mental health issues caused by depression and loneliness are rising. The short run productivity gains of WFH may be completely eradicated by long run absenteeism due to illnesses such as depression.
It turns out waking up and walking straight across to our desk to start working is pretty bad for us.
It is not completely smooth sailing for the tech industry. Creating new, innovative products appears to be more difficult in a remote team.
Steve Jobs famously created the Apple and Pixar headquarters in such a way that would encourage serendipitous contact across departments. Random ‘collisions’ between non-direct team members give rise to conversations and ideas that create huge value when extrapolated out.
Work from Home: Opportunities
Pre-pandemic, 5% of the US workforce worked from home, this has now shot way up to over 40%, and, if experts are to be listened to, that figure will sit at around 20% post-pandemic.
From an employee perspective, increased flexibility and control over where we work is becoming normal. No more fights against management to ask to work from home.
But is this a case of being careful what we wish for? As with life, nothing tends to be explicitly good or bad, and so rather than ditching the office altogether, maybe 2 days a week with Tony from accounts is bearable.
Rather than an expensive centralised office, firms may begin to give staff a budget to select a convenient co-working space enabling flexibility but overcoming isolation.
A reduced office overhead cost frees up extra budget allocation for business goals, and hopefully, employee care.
Key Takeaways & Observations
After working with teams across Asia, Europe, and North America we have had the chance to better understand team challenges first hand.
Every organisation is at a different stage of preparedness in supporting employees in their transition from office-based to remote working.
Some of the most common challenges shared with us:
- Developing and maintaining strong company culture is difficult, more than ever values and beliefs are not just ‘nice to have’s’.
- Onboarding new team members remotely is a challenge. We all want to be part of a larger mission, conveying this mission virtually is essential.
- More ‘traditional’ companies are finding it harder to adapt to new communication models (steep learning curve).
- Intentionally building community events into the calendar gives the team a chance to co-create experiences and memories.
- Nudging team members to connect across departments is an effective strategy to prevent disillusionment for the greater company mission but is very hard to do.
I’d love to hear about the creative initiatives you’ve put in place to help your team thrive.
Is it just me or is anyone else now drinking 5 coffees before 11 a.m.?