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Bill Gates Says This 1 Employee Perk Is Most Important. A New Harvard Study Backs Him Up

It turns out employees want this, and it just might make them more productive.

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Not long ago, Bill Gates shared what he thinks is the most important perk companies can give the best employees: flexible work arrangements.

Now a new study from Harvard Business School says companies that let their employees "work from anywhere" and work whenever they want wind up with employees who are more loyal, more productive, and cost less.

I suspect you're hearing from more employees who want this kind of arrangement. So, let's take a look at the latest studies, and then ask if there's room for this kind of flexibility in your business.

First, the recent study results. HBS professor Prithwiraj Choudhury and his colleagues say they compared how productive, loyal, and cost-effective employees at the U.S. Patent and Trademark Office were when they were allowed to work flexibly.

They chose the government office because it had recently implemented a wide-scale pilot program called the Telework Enhancement Act Pilot Program (TEAPP), which enabled some patent examiners to work from where and when they wanted, while still requiring others to remain in the office.

Results: 4.4 percent higher productivity among those in the pilot program -- doing the exact same work as those who were required to come into the office.

This squares with other research I've written about. For example, the Stanford economist who worked with one of his students -- who happened to own a travel agency in Shanghai -- to let half his employees work from home for nine months.

The result? They found included 13.5 percent higher efficiency among the work-from-home crowd. However, the experience also suggested that what employees ultimately wanted was the flexibility to work from home when they wanted, not a requirement to do so rather than coming into the office.

Choudhury's study addressed this by studying a policy that let employees work from "anywhere," rather than requiring them to be at home.

"While prior academic research has studied productivity effects of 'working from home' that gives workers temporal flexibility, 'work from anywhere' goes a step further and provides both temporal and geographic flexibility," Choudhury explained.

Beyond the higher productivity by individual workers, he found the program led to $132 million in additional fee revenue, a 4.4 percent reduction in recruiting and hiring costs, and a savings of $38.2 million on office space and related expenses.

Some individual employees also relocated to less expensive parts of the country, which in turn boosted their real incomes. 

So, is more flexibility right for your business? A few factors to consider:

How much do your employees need to collaborate with each other?

If employees need to collaborate, and technological tools aren't a perfect substitute, then this is a big challenge to overcome. It's worth noting that patent examiners, who were the subjects of this study, generally work independently.

Do you trust them?

The easy answer here is to say if you can't trust people, they shouldn't be working for you. But there are degrees of trust. And there are circumstances where you're just stuck with an employee for one reason or another. (Choudhury cites lack of trust as one of the most important reasons why more companies don't become more flexible.)

Would it just be silly?

Obviously, if you're running restaurants, or a factory, or a store with lots of customer interaction, this would be a very hard thing to consider. Still, there might be some "home office" functions that employees could do just as well remotely as in-person.

Can you ease into it?

I can't imagine too many companies being successful if they abruptly changed gears to allow everyone to work remotely at once. So, try before you buy, so to speak.

At the USPTO, only employees with at least two years of experience were allowed to apply for the pilot program. Even then, they had to shift into it: working from home at first, and then being allowed to work from anywhere.

by Bill Murphy Jr.


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