Marissa Mayer’s move to ban working from home at Yahoo in 2013 caused a media firestorm over the costs and benefits of this rapidly growing practice. People lined up to defend both sides of the argument: Do work-from-home (WFH) policies encourage employees to “shirk from home” or are they an essential way to make our modern work lives actually work?
To answer the question systematically and scientifically, we and two of our students ran an experiment with Ctrip, China’s largest travel agent. Ctrip wanted to test a WFH policy both to reduce office costs (which were becoming an increasingly high percentage of total costs due to rising rents at the firm’s Shanghai base) and to reduce the firm’s high annual rate of staff turnover (50%). Ctrip management was concerned, however, that allowing employees to work from home could have a negative impact on their performance, so they wanted to test the policy before rolling it out to the entire company.
By way of disclosure, one of our research team members, James Liang, is also the co-founder and chairman of Ctrip. This provided us with excellent — and uncommon — access to both the experimental data and to the management’s views on working from home. As such, the experiment provided some insight into how large publicly-listed firms adopt new management practices, and helped shine a light on why so many firms fail to adopt potentially beneficial management practices.
Ctrip decided to run a nine-month experiment with its airfare and hotel divisions in the firm’s Shanghai headquarters call center. All employees with at least six months’ worth of experience with the firm were offered the option to work from home for four days each week. Of the 508 eligible employees, 255 volunteered to work from home and — after a lottery draw — those with even-numbered birthdays were selected for WFH arrangements while those with odd-numbered birthdays stayed in the office to act as a control group.