Woman in hybrid work place sharing her time between an office and working from home remotely, EPS 8 vector illustration

The Question

The debate about hybrid working has been conducted largely through assertion, with executives claiming it damages productivity and culture, and employees preferring it for reasons of flexibility and commute. Bloom and colleagues (2024) ran a six-month randomised controlled trial, the gold standard for causal inference, to find out who is right.

The Study

The trial involved 1,612 employees in a Chinese technology company in 2021 to 2022. Participants were randomly assigned to hybrid working, defined as two days per week at home, or fully in-person working, and outcomes were tracked including job satisfaction, quit rates, performance grades, promotion rates, and lines of code written by computer engineers (Bloom et al., 2024). The use of randomisation, objective performance measures, and two years of follow-up data make this one of the most methodologically rigorous studies of hybrid working conducted.

What They Found

Hybrid working improved job satisfaction and reduced quit rates by one-third. The reduction in quit rates was significant for non-managers, female employees, and those with long commutes (Bloom et al., 2024). These are practically meaningful effects: a one-third reduction in voluntary turnover represents substantial cost savings and talent retention benefits.

Null equivalence tests showed that hybrid working did not affect performance grades over the following two years, did not affect promotion rates for any major employee subgroup, and did not affect lines of code written by computer engineers (Bloom et al., 2024). In other words, performance was not damaged by hybrid working on any of the objective or subjective measures available.

Perhaps most interesting is the manager finding. Before the experiment, managers on average perceived hybrid working as having a negative effect on productivity of minus 2.6 percent. After the experiment, the same managers perceived it as having a positive effect of plus 1.0 percent (Bloom et al., 2024). Direct experience of the evidence changed their minds.

Why It Matters

At a time when some prominent employers are reversing hybrid working arrangements and mandating full return to office, this study provides the strongest available causal evidence that hybrid working, at least at two days per week, does not damage performance and substantially improves retention. The burden of evidence, to the extent that randomised controlled trial data can establish it, falls on those arguing for full return to office (Bloom et al., 2024).

Reference

Bloom, N., Han, R., & Liang, J. (2024). Hybrid working from home improves retention without damaging performance. Nature, 1–23. https://doi.org/10.1038/s41586-024-07500-2