You’ve been added, without consent, into a global experiment.
An experiment that could lead to the end of the modern city, change how and where 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, Chinese firm, CTrip conducted a fascinating study.
Inspired by the brilliant Hidden Brain podcast linked below, here are some insights for team leaders and members, alike.
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 such 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 on top due to the rent saving per head.
Hypotheses are there to be disporved, and boy, did the results disprove CTrip’s.
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 signiicantly 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 commuting time and costs, but also earning more.
So with the firm enjoying higher productivity, and employees earning more, everyone put in a WFH request, right?
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 now work from home.
Why were the CTrip employees in question effectively asking to earn less, travel more, and be less productive?
We are still social creatures who place a large value on face time.
There were fewer promotions in the WFH group despite their performances being higher. Like it or not, it turns out a coffee break with your manager is still one of the key gateways to career progression.
Higher education = knowledge work = working on a laptop = easier adaptation to the new work environment.
Unfortunately, the distribution of opportunities is heavily in favour of the highly educated. High School educated individuals tend to make up a large percentage of retail and service roles, roles that largely rely on being in a physical location.
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 working
Creating new, innovative products appears to be more difficult in a remote team. Steve Jobs famously created the Apple headquarters in such a way that would encourage serendipitous contact across departments.
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 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 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 a 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 (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.
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 coffee’s before 11 a.m.?