When a company cuts costs, it usually means employee misery: fewer perks, lower salaries, and the never-ending demand to "do more with less." However, there's one (1) management strategy that doesn't just reduce expenses but also makes employees both happier and more productive. That strategy is work-from home.

The Cost Savings

Conventional wisdom is that open plan offices are a good way to cut costs because you can fit more people into a smaller space that with cubicles or private offices. Conventional wisdom, however, completely misses the point in this case.

First, open plan offices are penny-wise and pound-foolish, as the saying goes. The overwhelming scientific consensus is that open plan offices reduce productivity by at least 15%. Since the cost of labor is much larger the cost of office space, whatever cost savings might accrue from an open plan office will be more than offset by the consequent productivity loss.

Work-from-home, on the other hand, when fully implemented, simply eliminates the entire office space rental expense. Furthermore, because employees really want work-from-home, it's an incredibly attractive perk.

Even better, work-from-home also expands your candidate pool to workers who live in areas outside your commute zone. That means you don't have to pay employees extra to cover the exorbitant rents that are the rule in business hubs like San Francisco and New York City.

As a final bonus, work-from-home decreases your carbon footprint, instantly and inexpensively making your company "go green," which is good for both recruiting top candidates and for public relations in general. There is simply no management strategy of which I'm aware that so quickly improves the bottom line.

The Morale Boost

As opposed to cost-savings measures that employees hate, employees love, love, love work-from-home. How much? Well, according to a recent survey of 1,900 remote workers conducted by the high-tech startups Buffer, Workfrom and Hubstaff:

  • Nine out of ten of remote workers plan on working remotely for the rest of their careers.
  • Almost two thirds of employees who sometimes work remotely want to increase how much they work remotely.
  • Almost every remote worker surveyed (94%) recommends remote work to friends, family and colleagues.

Why are remote workers so gung-ho? For one thing, work-from-home is in effect a salary increase. Example: if you commute 1 hour a day each way and work 8 hours at the office, eliminating the commute means you're spending 20% less time to do the same amount of work, which is the exact same thing as a 20% raise in your hourly wage.

But it's not just the money. When the 1,900 remote workers were asked what they like best about work-from-home, they cited:

  • A more flexible work schedule (43%)
  • The opportunity to spend more time with family (15%)
  • The ability to travel more frequently (12%)
  • A generally better work environment (11%)

Again, inside the dozens of companies I've worked with and inside the hundreds of business books I've read and reviewed, I have never seen a perk that increases workplace happiness so quickly and so cheaply.

The Productivity Boost

So, why haven't more companies embraced work-from-home? A big part of the reluctance is management's fear that if they can't look over employees' shoulders, employees binge watch and play video games, rather than work.

But that's paranoia rather than a reasonable fear. As I explained in a previous column:

"In a landmark study cited in the Harvard Business Review, call center workers on Ctrip--a Chinese travel website--were given the option to volunteer to work from home for nine months. Half the volunteers did so; the other half was the control group and thus continued to work at the office each day. The study revealed that 'people working from home completed 13.5 percent more calls than the staff in the office did--meaning that Ctrip got almost an extra workday a week out of them,' according to Stanford University professor Nicholas Bloom."

While that study didn't investigate exactly why work-from-home employees are more productive, freelance reporter Bridget Miller, writing in the online magazine HR Advisor, identifies the following factors:

  • "Employees who don't have to commute get started on their work earlier or are able to work more hours because they don't have to rush to avoid traffic."
  • "The lack of commute may also mean that employees who work remotely may have more time for sleep and exercise, resulting in employees who are in better health and getting more rest."
  • "Fewer distractions and better focus... because interruptions from coworkers are minimized. Employees may be more able to concentrate at home, where the working environment can be controlled."
  • "Absences may decrease because employees who can work remotely can manage their day around miscellaneous tasks that would have otherwise forced them to leave early or take the day off."

My personal experience is that I can get more done in four hours at home than I EVER accomplished in an office, even when working long hours. I know I'm not unusual in that regard because I have literally received at least a hundred Tweets, texts, and emails from remote workers who've had the same experience.

In short, work-from-home saves money, boosts morale and increases productivity, making it a true example of that rarest of management strategies: a win-win-win proposition.

Your next question is probably: how to do I get my company to implement it?

Well, if other states follow the lead of Massachusetts, whose governor is proposing a tax break for companies who implement work-from-home, that question may become moot. It will take a while for CEOs to admit that they were snookered by the open plan office concept, which is beyond doubt the dumbest management fad of all time.

But they'll have to come around eventually because their companies won't be able to compete with the open plan albatross hanging from the corporate neck.

Published on: Aug 8, 2019
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