Hybrid work reduced employee attrition rate by 35%, study shows

Hybrid work reduced attrition rates at a large technology firm by 35% and improved self-reported work satisfaction scores, with no negative impact on performance ratings or promotions, according to a new study co-authored by Nicholas Bloom of Stanford University.

After the explosion of remote work during the pandemic, many companies have now adopted hybrid work arrangements for their employees. This typically involves working two to three days each week at the office and the rest at home, allowing employees to split tasks best done in person and those best done individually.

With the unemployment rate near its lowest level in five decades, even some of the staunchest critics of work-from-home have changed their tune to attract and retain employees.

The randomized control trial of 1,612 engineers, marketing and finance employees took place in 2021 and 2022 at the global travel agent Trip.com. Those born on an odd-numbered dat—say June 3—had the option to work from home on Wednesdays and Fridays, while others had to work in the office full-time. Following the study, Trip.com rolled out hybrid work to the entire company. The paper was co-authored by Bloom, Ruobing Han of Stanford University and James Liang.

Besides the improvement in attrition, the paper circulated by the National Bureau of Economic Research also highlighted how hybrid arrangements alter work schedules and habits. Employees worked fewer hours on remote days but increased the number of hours worked on other days, including on the weekend. In total, employees worked about 80 minutes less on home days but about 30 minutes more on other work days and the weekend.

Additionally, work-from-home employees increased individual messaging and group video call communication, even when in the office.

The study found no impact from work-from-home on performance reviews or promotions overall or any individual subgroup. However, those with the option to work from home reported slightly higher productivity. There was also an 8% increase in lines of code written by that group compared to in-office employees, a measure of productivity for IT engineers.

“Overall this highlights how hybrid-WFH is often beneficial for both employees and firms but is usually underappreciated in advance,” the authors wrote.