New study finds that hybrid work boosts morale—and profits

While many workplaces continue to grapple with the remote work debate , a new study may settle the discussion once and for all. 



The study, published in Nature , suggests that allowing workers two days of virtual work a week decreased quit-rates and increased employee-satisfaction. All that while, promotions, performance scores, and employee output remained unaffected. 



Researchers sampled the workers of Shanghai-based Trip.com, a multinational technology firm. Based on their birthdate, employees were assigned to either a full in-person or hybrid schedule, allowing randomized results. While the performance outcomes were consistent between both groups, the hybrid employees saw significantly higher retention rates.



“The company said, ‘What’s not to like?’” says Nicholas Bloom, a professor of economics at Stanford and coauthor of the paper. “There’s no negative effects on performance. We maybe save a bit of space by having people work from home two days a week, and we see an enormous reduction in quit rates.” 



Hybrid work significantly increases employee satisfaction



After analyzing the randomized data, researchers found the quit-rate of hybrid employees decreased by 35%, as compared to those working an entirely in-person schedule. This finding lines up with previous research, which suggests hybrid work fosters a better office culture. According to a February 2024 Scoop study , companies that offer fully flexible or hybrid schedules rank higher in culture and values, as well as employee work-life balance. 



Bloom’s new study, however, details the specific positive effects that hybrid work has on different groups of employees, including those with long commutes and non-managers. For instance, when women were required to work a hybrid schedule, there was a significant increase in retention. Bloom notes that this finding may be due to initially presenting the hybrid model as optional, to which “women initially were less likely to volunteer.”



“It’s actually really important to mandate these kinds of policies for everyone,” Bloom says. “The fear is some people may think if they volunteer to work from home two days a week, it’s seen by their boss as kind of a negative signal that they’re not so enthusiastic. So they keep quiet and won’t volunteer for it, even though they’d like to, and then they just end up quitting and jumping ship to another job.”



No matter the subsection of workers, Bloom says his finding is clear: hybrid work boosts employee experience and pushes retention rates up. And this means employers won’t have to spend additional funds on costly hiring efforts.



Hybrid work had no effect on employee performance



When studying employee output, the researchers found no significant change in performance between those assigned to a hybrid work model. For instance, working remotely did not impact grades employees were given for their performance, employees’ rate of receiving promotion rates, or even the quantity of lines of code programmers wrote. No matter the metric, hybrid employees scored just as well as their in-person counterparts.



Again, this finding lines up with previous research on the subject of flexible work. An October 2020 Gartner study found that performance improves when employees are given flexibility over where, when, and how much they work. 



Still, Bloom says he is not a proponent of fully flexible work like that captured in the Gartner study. Instead, he recommends working remotely approximately two days per week. 



“You can pretty easily tell if someone’s slacking off from three days a week,” Bloom explains. “It becomes very obvious very fast. You just don’t need somebody to be in five days a week in order to work effectively with them.”



“Hybrid is profitable”



While maximizing employee satisfaction may be an altruistic goal, Bloom takes a more business-minded approach: hybrid models aren’t just good for workers, they’re good for business. 



This financial benefits of hybrid work is demonstrated in Bloom’s data. Through the course of the study, managers’s collective perception of hybrid work moved from negative to positive. 



“The message to employers and firms is [that] hybrid is profitable,” Bloom says. “I’m not selling a social movement here. I’m not selling a good for the world story. I’m selling a make your business more money story.”