Go Ahead, Tell Your Boss You Are Working From Home | Nicholas Bloom | TEDxStanford

Go Ahead, Tell Your Boss You Are Working From Home | Nicholas Bloom | TEDxStanford

Translator: Ilze Garda
Reviewer: Peter van de Ven I’m guessing many of you are pretty suspicious
about working from home. When I worked in London, I worked in McKinsey and the Treasury,
which is the finance ministry. My friends would tease me all the time
about working from home. They would say working from home
is shirking from home or working remotely is remotely working. They were not very kind to me
about working from home; they claimed I watched
those old black and white movies all day and actually did nothing at all. If you’ve travelled on the subway,
you’ve probably seen these sketchy adverts that say things like “Work from home,
earn thousands of dollars monthly,” which strikes me as,
A, an implausibly large amount of money and, B, way too many exclamation marks even for someone
who’s done middle-school English. (Laughter) In another direction, if you listen
to music or follow the charts, you may know this song:
it’s “Work from Home” by Fifth Harmony. (Laughter) You can probably figure it’s not a very good representation
of the positivity of working from home. This was about the cleanest cut photo
I could get from the album; they had the most amount of clothes on
in this picture compared to anything else. To tell you how bad it is,
the chorus line is: “Ain’t nothing but sheets between us, Let my body do the work,
You’re the boss at home.” Which tells you
this is really not about work, something else is going on. (Laughter) So this is, you know, also very negative
about working from home. Online, it’s similar. If you go to Google or to Bing and you punch in “working from home”
into image search, what do you get? Well, you get something
that looks like this. A lot of pictures are basically naked people, cartoons,
people juggling way too many babies to actually be doing
anything constructive. The reason I show you Bing is that Bing nicely shows you
multiple other searches which are common searches
that go with this. You can see other common searches are “working from home funny,”
“working from home comics,” and my favorite one is
“working from home in underwear.” (Laughter) Apparently, people are regularly
searching for it all the time, maybe you can push it up to top
if you go and search for it now. And it’s not just online. The media – I talk
to journalists quite a lot, and journalists, most of the time,
are actually working from home. Despite that, they were very suspicious
about working from home when the big storm erupted
after that leaked memo from Yahoo in 2013. If you cast your mind back,
you may remember Marissa Mayer, the CEO of Yahoo. Back in 2013, on a quite Sunday,
some memo gets leaked out, claiming they are going to ban
working from home at the firm. Marissa Mayer probably
never could have guessed that in her long time at Yahoo, going through her start, her time there, all the ups and downs,
and eventually exiting, this would be the event generating
the most press coverage for her. The press went wild
for the next two weeks, there was masses of coverage in printed media,
radio media, on TV media. And you can see here,
I put up some examples from the Economist,
from the Wall Street Journal, from the New York Times, from Bloomberg. All of it was debating very heavily
about pros and cons of working from home. On one hand, there were people saying, “They are loafing off, not doing anything;
they’re watching TV in their underwear.” The other side saying, “This is the workplace of the future;
it’s a more productive way to operate.” I should actually end by saying
that probably the example of why working from home
is potentially seen as so bad is – a friend of mine told me a great anecdote. She said her 12-year-old daughter
went out shopping with some friends. Her 12-year-old daughter came back,
and she had bought a baseball cap, and on the baseball cap it said
“working from home.” Her mom said to her, “You are not wearing
that baseball cap out of the house!” As if it was like a T-shirt that said
“Hey, big boy, I’m easy” or something. (Laughter) Shows you how low the working from home
has sunk as a concept. I work from home a lot. I’m very positive about working from home, and I actually think
it has enormous potential, as much potential as, say,
something like the driverless car. Let me explain why. The average American spends
about 45 minutes a day commuting into work and about another 45 minutes a day
commuting back from work. Almost all of that is done by car. There are about 150 million
working Americans, there is probably about
another 500 million people working in similar situations in Europe
and South America and Asia and Africa. Now, imagine if we could take
just some share of those people and allow them to work
from home on a daily basis. The enormous amount of time you’d save, the huge amount of money you’d save
in terms of reduced car travel, and moreover, the amazing impact
you’d have on reducing pollution. So I think it has a tremendous potential. And then you should ask yourself: why do we focus so much
on working in the office. This tradition has gone back
a couple of hundred years to the Industrial Revolution. So I guess in many ways
you can blame the British for this, but before the Industrial Revolution, around 1800, everyone basically worked from home: we were farmers, we were artisans,
we were craftsmen. Around 1800, modern workplaces
started to be formed, we started to mass
in factories and offices, and the modern form of commuting
to the office and back or to the factory and back
started to be set and stored. But a lot has changed
in the last 200 years, in a sense, we don’t need
to be like this anymore. There’s modern communications,
modern computer systems, the Internet. So one of the things I want to argue is the way that we organize the office,
the way we organize factories is something that is
very backward looking, and it doesn’t need to be
that way anymore. I have kids, and it reminds me a lot
of these long summer holidays. The summer holidays for three months
is a huge challenge for parents. What on earth to do
with your children for three months? You ask, “Why do we have
these long summer holidays?” Again, it’s one of these throw-back things because when the school day
was starting to be structured a couple of hundred years ago, we’d release kids to go
and harvest the fields. And I don’t know about any parents here, but my kids certainly are not doing
any harvesting anymore in the, you know, the bare in the summer. I’m going to argue working from home
is a future-looking technology; I think it has an enormous potential. Now, that’s my claim. What I’m going to talk about
for the rest of the day is some evidence to support that. I wanted to collect evidence
that was scientific. My father is actually a scientist,
he does lots of drugs testing, I talked to him a lot about that. If anyone here is in the pharmaceutical industry or works
at the federal Drug Administration, you know that to prove
something like a medical device, you have to separate out
into a large pool of subjects, randomly pick some treatment
and some control, allow one to take the drug, one not to, and to follow them through
for months on end. So I wanted to do something
very much like that for working from home, to scientifically test it. I was fortunate enough that I found
a company that would do that with me, it’s called Ctrip. They are China’s largest travel agency,
they have about 20,000 employees, they’re worth about
20 billion dollars on Nasdaq. Here’s a picture
of their headquarters in Shanghai. They look like any kind of modern office: very dilbertesque,
lots of desks and cubicles, and thousands of people working,
taking calls, typing on their computers, dealing with customer complaints,
coming out with new products, managing their team. Why would they be interested
in working from home? They’re interested in working from home because Shanghai is a phenomenally
expensive place to run a business; it has incredibly expensive
property prices. And they were growing rapidly. Their aim was to try and grow,
but without increasing their office space. It’s probably a similar thought
for many people here that operate in the Bay area
or in New York or in Chicago or London or Paris or Toronto
or Tokyo or Johannesburg; wherever you are around the world, office space is becoming
very expensive in big cities. So this is what motivated them
to start down this road. Rather than to roll the whole thing out, they thought they would run
a big working-from-home experiment. So they got a large number of volunteers from two divisions,
that wanted to work from home, and they set it up
as a randomized control trial. In a very Chinese style, James Liang,
who is the CEO, pictured here, drew a ping-pong ball out of an urn. The urn said “even,” which meant
everyone who had an even birthday, so was born on the second,
the fourth, the sixth, the eighth, the tenth of the month, got to work at home
for the next nine months. If you had an odd birthday, like myself, the first, the third, the fifth,
the seventh and ninth of the month, you stayed in the office
for the next nine months. In fact, we tracked these two groups
for about two years. This was to set it up
as scientifically as we could. Now, what did we find? Oh, oh… Before we go to the results,
I should point out – Here are the people working from home. It’s not clear,
when looking at these guys, exactly what is going to happen. The person in the bottom right doesn’t look exactly
very enthusiastic to me. I’m somewhat nervous, so are they,
about some of these characters. In the top right is another picture to show
the downside of working from home. That’s her bed in the photo,
so she has about a four-foot commute. Which is great and very efficient. On the other hand, I personally really wouldn’t want
to spend 21-22 hours a day in the same room, day in and day out. It’s certainly not for everyone. To point out, just to get
the experiment clear, they’re typically working
in teams of 10 to 15 people, and they all have the same manager. Here’s a team manager. She’s running her team:
some of them are randomly sent home, some of them are randomly
still left in the office, but they are all working
under the same manager. Those at home come in one day a week. They may all come in on Wednesday; they’re at home on Monday,
Tuesday, Thursday, Friday, the whole team is
in the office on Wednesday. She can monitor and see what’s going on, they’re all working the same shift. The only thing that’s really changing
is where they work. So, what do we find? Before I show you the results, I want to prepare you by saying:
remember what motivated it. What motivated it is that Ctrip
was desperate to save money because they are paying an enormous amount
to house all these people in Shanghai. Their view was to save a lot of money
on getting rid of rent; they’d probably take a bit of a hit on people going home
and basically goofing off. I remember one of them saying they were worrying about them watching
the Chinese equivalent of Jerry Springer or playing computer games. They were kind of mildly pessimistic,
and they wanted to see what happens. So what do we find? Well, we found massive,
massive improvement in performances: a 13% improvement in performance
from the people working at home, which is huge! That’s almost one day a week. How on earth did this happen?
Where did this come from? It came from two things. One is: people working from home
really worked their full shift. If you’re in the office, you’re supposed to be there
at 9 till 5, Monday to Friday, but they’d often come in late
because their motorbike broke down, or they had a long lunch break because they were having a drink or two, they leave early for the cable guy. Whatever it is, they were definitely not working
all of the 9 to 5, Monday to Friday, whereas most people at home
were much better at keeping time. The second fact was it’s far easier
to concentrate at home. For all of you that have worked from home, the office is actually
an amazingly noisy environment. You’d hear stories of the person
on the desk next door, how her boyfriend has just
left her, she’s in tears; (Laughter) there’s a cake in a breakout room,
Bob’s leaving, come join; the world cup of sweepstake is going on – whatever it is, the office
is actually super distracting. So that was finding one. Finding two: quit rates dropped by 50%. So for anyone out here that’s a manager, you know the nightmare
of endlessly advertizing, interviewing, recruiting, training,
getting up to speed employees only to see them leave again. Ctrip’s quite rate is about 50% a year, which turns out to be
about the average for the whole U.S. This again is an enormous impact. Basically, employees
are voting with their feet; they love working from home. Not only do the employees benefit,
but the managers benefit because they can spend less of their time painfully advertizing, recruiting,
training, promoting, exiting again, and spend it more on work. Finally, at the end of the experiment, it was so successful that Ctrip
rolled it out to the whole company and let everyone change their minds. Some people actually gave up
working from home. There’s the old saying that the three great enemies
to working from home are the fridge,
the television, and the bed. Some people got overcome
by one or many of those three. (Laughter) They literally said, “I can’t take it anymore,
I’m coming back to the office.” Other people changed their mind. What you saw at the end of it
is performance goes up by 24% because only people that were left, people that were working from home,
were people that could concentrate. Choice in combination
with working from home is just hugely impactful. It doesn’t need to be four days a week;
it can be one day a week, but certainly some combination
of a bit of working from home and a bit of choice
is incredibly impactful. So, what about Ctrip? They reckon they made about 2,000 dollars more profit
per person at home. They were superpositive;
they rolled it out to the whole firm. I want to end by saying I want to kill the cartoon stereotype
of working from home. I love the Simpsons, I love Homer Simpson,
he’s close to my heart, in some ways. I love this cartoon because, A, Homer Simpson is too lazy
to actually to get dressed, he’s wearing his pajamas, or it looks
like Marge’s nightgown, it’s hard to tell, and, B, he’s too lazy to even get to touch the commuties,
pushing it with the broom. I want to kill this stereotype
of working from home and say there are massive benefits. For employees, they are much more
productive and happier; for managers, you don’t have to spend so much of your time recruiting
and training people all the time; for firms, you make far more profit. In Ctrip’s case, they made 2,000 dollars extra per person
from saving rents and productivity. And for society, there’s a huge saving
in reducing congestion, reducing driving time
and ultimately, reducing pollution. So think very seriously, I implore you to think very seriously
about working from home, even if you try just one day a week. Give it a try; there’s not much to lose,
and there’s a lot to get. Thank you. (Applause)

23 thoughts on “Go Ahead, Tell Your Boss You Are Working From Home | Nicholas Bloom | TEDxStanford

  1. I've always found the best way to convert your boss into letting you work from home is when you have the most important projects, let the boss know you'll work on it over the weekend or at night from home because it's a more efficient work environment for you. Teach your employer that your best work is done from home, then just do it more and more. I've done that with several employers that otherwise had never had a remote working employee. 😀

  2. I would love to work from home. I am a software developer and have a disability which makes it nearly impossible to work in a normal office environment or to commute very long every day.

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  5. What are the different " work from home" genuine opportunity where the candidates doesn't have to make any investment?Second thing is if we can find out some solution it would be beneficial for rural people.People will not have to migrate.

  6. Having the choice makes all the difference. Some days I don't mind work, but the commute is just unbearable, by the time I get in to work I'm hangry and fed up. Instead, I could be at home, eating my breakfast, while checking my e-mail 45 minutes early. Now think about the amount of congestion you could clear up also, and make everyone elses' commute easier.

  7. I am a software developer and I work from home 1 or 2 days per week. I am lucky enough to work for a company where it doesn't matter how many hours you work or how longer you stay in the office warming your chair. As long as you deliver and you do your tasks, it's good and this is how it should be. Just be responsible for yourself, do your contracted hours and if you finish your work earlier you can always invest the time in practising your skills with online courses/exercises/books.

  8. another huge benefit would be to redistribute wealth in the US. As more people work from home they will move out of cities and into more remote areas and boost the economies where they go

  9. I would love to work from home because I need a sustainable career without worrying about location. My husbands’ job requires us to relocate often.

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  17. I wish I could work from home. I feel like my commute is killing me. I have to wake up at 5am to get there by 7. 2 hour round trip commute every day. My perfect job would be having a job in my field that I love that allows me to telework. I would travel a lot more even if I were still working during the days. I might would even try living in Eastern Africa or Brazil for the climate. I moved to Colorado a year ago from the southeast and this winter started to be really hard on me by January. I didn’t realize the winter here lasted from Halloween to mid May. No spring weather like I’m used to. I had to go to the tanning bed yesterday for the first time in my life. I didn’t want to tan; I just needed some sun! It did seem to make me feel better. I also ordered vitamin D3 and a light lamp. The winter was especially difficult since I was commuting at 6am and sun wouldn’t rise until after I had already got to work. Worked 8 hours in a dark cubicle. Then leave and get home at 5 just as the sun is setting. No joke that this will kill you after a while. I visited Los Angeles and felt so much better near the coast with the sun, warmth, and low altitude. Idk how people in the northern Midwest and northeast do it. I guess if you grow up there you’re used to it but I don’t think they will be areas I can safely tolerate with my mental health

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