Remote and hybrid work may be great for employees’ work-life balance, but it may be stifling innovation, according to new research.
The study, led by economists at the University of Essex and the University of Chicago, found that staff working in a hybrid model were less likely to generate innovative ideas than colleagues who always worked in the office. And staff working from home tended to generate lower-quality innovative ideas than those who always worked in the office.
“Workplace innovation can occur through spontaneous, random conversations between employees,” explained lead researcher Dr. Christoph Siemroth. “However, these ‘productive accidents’ are less likely to occur when employees work from home. Our research has found that innovation is impaired as a result.”
In the aftermath of the pandemic, many companies are hesitant to implement a return to full-time work from the office and have adopted a hybrid model, where employees get the best of both worlds, spending some days in the office and others at home.
Many business leaders have expressed concern about the impact these new ways of working have on innovation. This new research, published in the journal Scientific reportsconsiders that their concerns could be valid.
“Of course, this cost to innovation may be acceptable, given the significant benefits to employees in terms of work-life balance, making more flexible employers more attractive,” added Dr Siemroth, from the Department of Economics at Essex.
“Our findings imply that companies should take steps to coordinate when employees are in the office. Innovation doesn’t work well if half the team is in the office on Mondays and the other half on Wednesdays. Instead, set days when the entire team is expected to be in the office. While this limits the flexibility of hybrid working, our results suggest that innovation benefits as a result.”
The study followed more than 48,000 employees at a large Indian IT company during periods of work from the office, work from home, and hybrid work. Innovation is not a core part of their job, but the company has taken significant steps to instill a culture where all employees view innovation as a key part of their job, and the company offers financial rewards to encourage innovation at work.
Employees write down ideas for process improvements, cost-saving measures or new products, which are then evaluated by the company and implemented or discarded.
While the number of ideas did not vary during the work-from-home period compared to working in the office, the quality of ideas suffered. During the subsequent hybrid period, the number of ideas submitted decreased and innovation suffered, particularly in teams that did not coordinate when working in the office or from home.