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Stanford’s Nick Bloom: hybrid work cuts attrition by 33%

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Bosses have doubled down on their return-to-office demands of late, with many increasing their spending on office space and threatening to link pay and progression with showing face—but new research shows that such businesses may be left with fewer workers to summon to their vertical towers.

At least, that’s what Nick Bloom, Stanford economist and the brains behind remote work research group WFH Research, has documented in his latest co-authored paper on hybrid working. 

The study, published in Nature, found that two days of working from home improved job satisfaction and reduced turnover when compared to those working in offices five days a week.

The study randomly divided more than 1,600 workers at Trip.com, one of the world’s largest online travel agencies, into two groups and tracked them for two years: One group worked from the office full-time, while the other enjoyed a hybrid schedule with just three enforced office days.

In just six months, the rate of people quitting went down by 33% for those who were afforded more flexibility.

Why? According to the research, the hybrid workers reported that working from home saved on commuting time and costs—after all, folks don’t live near the office anymore. 

What’s more, hybrid working helped retain diverse staff members, non-managers, female employees and those with long commutes (who often can’t afford to live where they work), who were most likely to quit when asked to go in 5 days a week.

As well as helping the business be more inclusive, lowering attrition helped it claw back millions of dollars. 

“Once the experiment ended, the Trip.com executive committee examined the data and voted to extend the hybrid WFH policy to all employees in all divisions of the company with immediate effect,” the researchers concluded. 

“Their logic was that each quit cost the company approximately $20,000 in recruitment and training, so a one-third reduction in attrition for the firm would generate millions of dollars in savings.”

What about productivity?

Leaders hell-bent on getting workers back to the office often cite eroding workplace culture or productivity—likewise, managers in the study predicted that hybrid work would reduce productivity by 2.6%.

But this did not happen: The study found that working from home (for two days a week, at least) had no measurable impact on performance, productivity or innovation.

Managers saw this and as a result, changed their minds on hybrid working after participating in the study: By its close, they believed flexible arrangements could actually improve productivity by 1%. 

It perhaps explains why, even after two years, the hybrid group still saw no changes in performance reviews or promotion rates.

But are RTO mandates actually about performance?

So if performance and productivity aren’t impacted by hybrid working, what’s with all the recent rigid RTO mandates?

Separate research from Mark (Shuai) Ma, an associate professor at the University of Pittsburgh, and Yuye Ding, a PhD student at its Katz Graduate School of Business, echoed that office returns aren’t actually boosting a business’s bottom line.

It’s why, they suggest that mandates are about asserting control—not performance—and using “employees as a scapegoat.”

Another report added that by the end of this year, “executives will be forced to admit their RTO mandates did not improve productivity”—or risk looking like they care more about where the work happens, than whether it happens. 

One CEO has already reversed his RTO mandate after high-performing staff made it clear how much they preferred working remotely. After further thinking, Jeff Jones, CEO of tax services giant H&R Block, told Fortune that he couldn’t find a good reason to push the mandate. So he dropped it.

“I know that there are CEOs whose orientation is, ‘I want people in’ and they chose to make mandates. If that works for them, fantastic,” Jones said. 

“I want to hire great people, empower them as best as I can, and hold them accountable to outcomes. I don’t want to micromanage how many hours a day they’re on Teams, or how many days a week they’re in the office, as long as we’re delivering on our commitments.”

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