We’ve all read, heard, and discussed work-from-home versus return-to-office (RTO) policies. There is no single correct answer to the debate. The RTO camp believes in the added value of face-to-face connections, while the work-from-home camp thinks the autonomy it provides leads to higher employee engagement. Is one right and the other wrong?
To find out, Harvard Business Review recently shared the results of an A/B study to determine if there is a difference between a full return to office versus a partial work-from-home schedule. The study, “randomly assigned employees to a three-day or five-day in-office schedule, could provide hard evidence on the benefits of hybrid work when it comes to reducing turnover and increasing profits.”
The company selected has 40,000 employees, and 1,600 were chosen from various departments to participate in the six-month study. The data was reviewed, and as a follow-up, performance reviews over the next two years found no difference in productivity, performance, review grade, or promotion.
Going into the study, the management team assumed the hybrid work arrangement would decrease productivity by 2.6%. After six months, they reevaluated and believed the hybrid arrangement increased productivity by 1%. They discovered that these employees showed higher satisfaction levels and 35% lower attrition. The lower level of attrition was most evident among females, non-managers, and people who commute longer than one and a half hours.
Based on data from the SHRM, every time a person leaves, it costs the company a minimum of half their annual salary. From the A/B test conducted, the hybrid participants’ attrition level fell by more than one-third, which is a seven-figure savings. In reviewing the results, it appears that three aspects contributed to the hybrid model’s success.
A rigorous performance management system that’s on par with best practices worldwide.
Leadership does not micromanage or provide reviews annually. Instead, they provide feedback every six months to support employee development. They also solicit input from peers, direct reports, managers, and clients as part of the multi-dimensional development process. The process does not discriminate whether an employee is in the office or working from home.
Employees have a clear, coordinated schedule of when their team will be in the office together.
This is important so employees don’t come into an empty office. The days to work at home are communicated so employees can make the most of their in-office time.
The CEO and full executive suite are supportive of a hybrid policy.
The process was only as successful because the leadership team stood behind it with 100% commitment. If employees felt that the A/B test was little more than a short-term experiment where the results wouldn’t matter, they would not have bought into it in the same way.
According to the article, A/B testing with management practices is relatively uncommon. However, the company they worked with has a history of such practices. The findings in this study were conclusive, resulting in rolling out the hybrid work schedule to the entire company.
Interestingly, the findings highlighted different ways of working, “The data showed hybrid employees were working about 1.5 hours less per home day, superficially suggesting these employees were working less. But in examining the data closely, they found hybrid employees put in longer hours on their office days and weekends to make up. Employees shared that they found home-days useful for important activities like a doctor’s appointment, taking their children to school or trips, or leisure activities like golf. Because these workers were well motivated by rigorous performance evaluations, they made up for this with longer hours on office days and weekends.”
If you’re still figuring out the optimal work arrangement for your organization, the study shows it’s best not to jump to conclusions. With the hybrid work policy, they reduced attrition without any impact on performance, innovation, or productivity and saved millions of dollars.
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