August 2, 2024
Remote work is holding back innovation, study claims
Remote work and ‘hybrid working’ models may greatly enhance employees’ work-life balance, but new research suggests they might also be stifling innovation. The study, led by economists from the University of Essex and the University of Chicago found that employees who worked in a hybrid model were less likely to come up with innovative ideas compared to their colleagues who always worked in the office. Additionally, employees working entirely from home tended to produce lower quality ideas than those who consistently worked in the office.The study followed over 48,000 employees from a large Indian IT company across different working periods: in the office, at home, and in a hybrid setting. Although innovation was not seen as a core component of their work, the company said it has actively cultivated a culture where all employees perceive innovation as a crucial aspect of their jobs. The company has implemented significant measures, including financial rewards, to encourage and foster innovation among its workforce.
Employees are encouraged to write up ideas about process improvements, cost-saving measures, or new product concepts. These proposals are then evaluated by the company and either implemented or discarded. Interestingly, the quantity of ideas submitted did not fluctuate during the work-from-home period compared to working in the office. However, the quality of these ideas took a noticeable hit. During the subsequent hybrid working period, the quantity of submitted ideas declined, and innovation suffered markedly, especially in teams that did not synchronize their in-office and at-home workdays.
“Innovation in the workplace can often occur through random, spontaneous ‘watercooler’ conversations between employees,” explained Dr. Christoph Siemroth, the lead researcher. “However, these ‘productive accidents’ are less likely to happen when employees are working from home. Our research indicates that innovation is indeed suffering as a consequence of remote work.”
In the wake of the COVID-19 pandemic, many firms are reluctant to mandate a full-time return to the office. Instead, they have adopted hybrid models, aiming to offer employees the best of both worlds—some days in the office and some at home. Despite the widespread adoption of these new work modes, many business leaders have expressed concerns about the potential negative impact on innovation. This new research, published in the journal Scientific Reports, provides empirical evidence that these concerns might be well-founded.
“Of course, this potential cost to innovation might be acceptable, given the significant benefits for employees in terms of work-life balance. These benefits make more flexible employers more attractive to potential hires,” added Dr. Siemroth, from Essex’s Department of Economics. “However, our findings imply that companies should take deliberate steps to coordinate when employees are in the office. Innovation does not thrive if half the team is in on Mondays while the other half is in on Wednesdays. Instead, organisations should establish set days when the whole team is expected to be in the office. While this approach limits the flexibility of hybrid work, our results suggest that it significantly benefits innovation.”
