Hybrid work model can reduce employee attrition rate, study finds

Working from home has no negative effect on performance ratings or promotions, according to the research paper

The key obstacle to adopting work-from-home arrangements has been a concern by managers that employees will underperform, a research paper said. Reuters

Hybrid work arrangements reduced attrition rates at a global technology company by 35 per cent and improved self-reported work satisfaction scores, with no negative impact on performance ratings or promotions, according to a recent research report.

Hybrid work-from-home (WFH) models can potentially be a tool to help address employee issues around stress and excessive working hours, according to the study by Nicholas Bloom and Ruobing Han of Stanford University, and James Liang of Peking University in Beijing.

Global travel agent Trip.com, which has 35,000 employees, performed a random trial involving 1,612 engineers, marketing and finance employees for six months in 2021 and 2022.

As part of the experiment, those born on an odd-number date had the option to work from home on Wednesdays and Fridays, while those with even-number birthdays continued to work in the office full-time.

“Less attrition means a more stable workforce, which can directly reduce training and hiring costs, and indirectly boost productivity,” the authors wrote in the report.

“The internal calculation of the HR department of Trip.com suggests losing an employee and finding a replacement amounts to 21 per cent of the employee’s annual salary.”

After the wide prevalence of remote work during the Covid-19 pandemic, many companies have now adopted hybrid work arrangements for their employees.

This typically involves two to three days in the office each week and the rest at home.

In May, a survey by LinkedIn found that 70 per cent of professionals in the UAE and Saudi Arabia have considered leaving or have left their jobs because of a lack of flexibility.

This comes amid a widening disconnect between employers and employees about returning to the office after the Covid-19 pandemic.

About 90 per cent of UAE employees want to work either in a hybrid or fully remote working model in the future, according to a May survey by technology company Cisco.

Sixty-one per cent of UAE professionals said they would be less likely to look for a new role if given the opportunity to work either remotely or in the office only one or two days a week, Cisco said.

Working from home had no impact on performance reviews or promotions overall for any individual subgroup, according to the hybrid model research paper, which was published by the National Bureau of Economic Research.

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However, those with the option to work from home reported slightly higher productivity, with employees’ self-assessed productivity up 1.8 per cent, the study found.

There was also an 8 per cent increase in lines of code — a measure of productivity for IT engineers — written by employees participating in a hybrid work model, compared with in-office employees.

“This is important as the main criticism of hybrid WFH has been its negative impact on productivity, which executives like Elon Musk at Tesla, Jamie Dimon at JP Morgan and David Solomon at Goldman Sachs have noted when pushing for a full return to the office,” the authors wrote.

“The key obstacle to implementing hybrid WFH was the concern of many managers that employees would underperform on their days at home.”

Working from home also alters the structure of the working week, according to the study.

Employees worked fewer hours on remote working days, but increased the number of hours worked on other days, including at the weekend.

In total, employees worked about 80 minutes less on home days but about 30 minutes more on other work days and the weekend.

“This suggests that WFH spreads work outside of the core 9am-to-5pm, Monday-to-Friday period into evenings and weekends,” the report said.

Employees at Trip.com said that working from home afforded them the flexibility to attend a dentist appointment, pick their children up from school, exercise or travel to their hometown early on a Friday.

Additionally, work-from-home employees increased individual messaging and group video call communication, even when in the office, the study said.

“This suggests that home working leads to persistent changes in employees’ behaviour, even in their days in the office,” the study said.

“This increase in messaging is greatest for team members and existing close contacts, suggesting hybrid WFH may lead to some mild silo-effect for individuals, highlighting the importance of the office days for employees to network and build up weaker ties.”

Having registered the benefits in terms of job retention, job satisfaction and productivity, Trip.com extended hybrid work to its entire workforce after the experiment.

“Overall, this highlights how hybrid-WFH is often beneficial for both employees and firms, but is usually underappreciated in advance,” the authors wrote.