Does Working from Home Boost Productivity?

When Yahoo! CEO, Marissa Mayer, killed the company’s popular work from home policy in late February, she did not only create controversy, but she also sparked a ferocious debate about productivity in the workplace.

According to an internal memo, which was leaked to tech site All Things D, Yahoo! ordered several hundred employees, at the time enjoying working from home, to start working in the office full-time from the 1st of June. Mayer discovered that some remote workers weren’t using Yahoo!’s virtual private network (VPN) often enough; she reasoned that if employees weren’t using the VPN, they couldn’t be working or contributing to Yahoo! as a company.

“People are more productive when they’re alone, but they’re more collaborative and innovative when they’re together,” Mayer explained. “Some of the best ideas come from pulling two different ideas together.”

Unsurprisingly, some employees are infuriated by the ban, but the majority agree with the need for the company’s cultural change back towards collaboration. Outside Yahoo!, however, it sparked a debate about productivity in the workplace. Whilst some argue that working from home encourages a relaxed work approach, others believe that flexible work arrangements are the way of the future.

“A variety of studies show that telecommuting is associated with higher productivity,” says David Lewin, Management Professor at the University of California: “Analytically, it’s not at all clear that this would benefit Yahoo! They could wind up with negative performance effects.”

However, if companies do give their staff the flexibility to work from home, it is important that they provide their employees with the necessary technology as well as sufficient support and training. A study from Stanford University claims that while remote workers claim to be happier, working in one’s pyjamas often comes with several costs. It not only diminishes employees’ chances on a promotion by 50 per cent, it also leads to less on-the-job training.

According to ASTD research, companies that invest in professional providers to provide consistent business training courses for their staff have higher productivity, revenue growth and profit growth than companies that do not. Regular training increases employee productivity by increasing career satisfaction/motivation, whilst also reducing the negative effects staff turnover.

Another fear of many companies is that employees are spending too much time on Facebook and personal email. Whilst some workers undoubtedly will waste significant time on social networks, it would be counterproductive to block social networking sites on company computers; at least according to Joe Nandhakumar, Professor of Information Systems at Warwick Business School. His latest research demonstrates that employees who are encouraged to use Skype, Twitter and other social networks in the workplace are among the most productive workers. They would even be more productive than their co-workers who focus on their work for the entire day.

“We found that the ubiquitous digital connectivity altered workers’ sense of ‘presence’ and helped rather than hindered the effective completion of collective tasks,” says Nandhakumar. He added: “Ubiquitous digital connectivity should be seen not as an unwelcome interruption but as part of the changing nature of knowledge work itself that needs to become part of normal, everyday practices of contemporary organisations.”