Home » Go Ahead, Tell Your Boss You Are Working From Home: Nicholas Bloom (Transcript)

Go Ahead, Tell Your Boss You Are Working From Home: Nicholas Bloom (Transcript)

So, what do we find?

Before I show you the results, I want to prepare you by saying: remember what motivated it. What motivated it is that Ctrip was desperate to save money because they are paying an enormous amount to house all these people in Shanghai. Their view was to save a lot of money on getting rid of rent; they’d probably take a bit of a hit on people going home and basically goofing off.

I remember one of them saying they were worrying about them watching the Chinese equivalent of Jerry Springer or playing computer games. They were kind of mildly pessimistic, and they wanted to see what happens.

So what do we find?

Well, we found massive, massive improvement in performances: a 13% improvement in performance from the people working at home, which is huge! That’s almost one day a week.

How on earth did this happen? Where did this come from?

It came from two things. One is: people working from home really worked their full shift. If you’re in the office, you’re supposed to be there at 9 till 5, Monday to Friday, but they’d often come in late because their motorbike broke down, or they had a long lunch break because they were having a drink or two, they leave early for the cable guy.

Whatever it is, they were definitely not working all of the 9 to 5, Monday to Friday, whereas most people at home were much better at keeping time.

The second fact was it’s far easier to concentrate at home. For all of you that have worked from home, the office is actually an amazingly noisy environment. You’d hear stories of the person on the desk next door, how her boyfriend has just left her, she’s in tears; there’s a cake in a breakout room, Bob’s leaving, come join; the world cup of sweepstake is going on – whatever it is, the office is actually super distracting.

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So that was finding one.

Finding two: quit rates dropped by 50%. So for anyone out here that’s a manager, you know the nightmare of endlessly advertising, interviewing, recruiting, training, getting up to speed employees only to see them leave again.

Ctrip’s quit rate is about 50% a year, which turns out to be about the average for the whole U.S. This again is an enormous impact. Basically, employees are voting with their feet; they love working from home.

Not only do the employees benefit, but the managers benefit because they can spend less of their time painfully advertising, recruiting, training, promoting, exiting again, and spend it more on work.

Finally, at the end of the experiment, it was so successful that Ctrip rolled it out to the whole company and let everyone change their minds. Some people actually gave up working from home.

There’s the old saying that the three great enemies to working from home are the fridge, the television, and the bed. Some people got overcome by one or many of those three. They literally said, “I can’t take it anymore, I’m coming back to the office.”

Other people changed their mind. What you saw at the end of it is performance goes up by 24% because only people that were left, people that were working from home, were people that could concentrate.

Choice in combination with working from home is just hugely impactful. It doesn’t need to be four days a week; it can be one day a week, but certainly some combination of a bit of working from home and a bit of choice is incredibly impactful.

So, what about Ctrip? They reckon they made about $2,000 more profit per person at home. They were superpositive; they rolled it out to the whole firm.

I want to end by saying I want to kill the cartoon stereotype of working from home. I love the Simpsons, I love Homer Simpson, he’s close to my heart, in some ways. I love this cartoon because, A, Homer Simpson is too lazy to actually to get dressed, he’s wearing his pajamas, or it looks like Marge’s nightgown, it’s hard to tell, and, B, he’s too lazy to even get to touch the commuties, pushing it with the broom.

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I want to kill this stereotype of working from home and say there are massive benefits. For employees, they are much more productive and happier; for managers, you don’t have to spend so much of your time recruiting and training people all the time; for firms, you make far more profit.

In Ctrip’s case, they made $2,000 extra per person from saving rents and productivity. And for society, there’s a huge saving in reducing congestion, reducing driving time and ultimately, reducing pollution.

So think very seriously, I implore you to think very seriously about working from home, even if you try just one day a week. Give it a try; there’s not much to lose, and there’s a lot to get.

Thank you.

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