Controversies

Why Won't Yahoo! Let Employees Work From Home?


Yahoo! headquarters in Sunnyvale, Calif.

Photograph by Chip Chipman/Bloomberg

Yahoo! headquarters in Sunnyvale, Calif.

(An earlier version of this story ran online.)

On Feb. 22 a leaked memo sent from Jacqueline Reses, Yahoo!’s (YHOO) executive vice president of people and development (that’s code for HR), announced that Yahoo employees would no longer be able to work from home. Even on the days that employees had family obligations or had to “stay home for the cable guy,” Reses urged them to “use your best judgment.” Yahoo is bucking the national trend: According to the Telework Research Network, an independent employment research firm, the number of people who work remotely rose 73 percent from 2005 to 2011. Today, 20 million to 30 million Americans work from home at least once a week.

Yet Yahoo isn’t the only company forcing its remote workers into the office. In December, Bank of America (BAC) scaled back My Work, its work-from-home program that began in 2005—and by 2010 included more than 15,000 employees. To cut costs and improve efficiency, each bank department now assesses telecommuting on an individual basis. Both Twitter and Google (GOOG)—where Yahoo Chief Executive Officer Marissa Mayer was employee No. 20—encourage staffers to work at the office because it generates a more collaborative atmosphere. While Google has no official policy, Chief Financial Officer Patrick Pichette said last week, “Working from the office is really important.” So how many people telecommute at Google? “As few as possible,” he said.

For a Google exec, Pichette seems uncharacteristically out of touch with the data. Several academic studies report major productivity gains when employees are given the freedom to work where and when they like. A February study from Stanford University found that when employees of a Chinese travel agency were allowed to work from home, they were 13 percent more productive than when they worked in the building, ultimately saving the company $2,000 per person per year. “Is it easier to have everyone in the same place? Yeah, of course it is. But that doesn’t mean it’s always better,” says Brett Caine, senior vice president and general manager of Citrix Online, a mobile networking company.

“Telecommuting … has allowed me to have a career as well as be a mother,” wrote an irate “digital mom” on Babble after the Yahoo announcement. But it’s just as popular among childless employees as parents. And mothers are no more likely to work from home than fathers, according to Telework. “It’s kind of a shame that it gets made into a mommy thing, because it’s families in general who need this flexibility,” says Kate Lister, Telework’s president.

Face time is still critical to one’s career. According to researchers Kimberly Elsbach and Daniel Cable, people who show up to the office are more likely to be promoted or receive better performance reviews than their remote co-workers. “Just being seen at work, without any information about what you’re actually doing, leads people to think more highly of you,” they wrote in the summer 2012 issue of MIT Sloan Management Review. And those at-home workers in the Stanford study? Although they were more productive, their rate of performance-based promotions declined by half.

Yet surveys repeatedly show that 80 percent to 86 percent of employees want the opportunity to work from home. The more flexibility workers have, the higher their job satisfaction and the less likely they are to leave a company. And they do work harder. A 2010 Brigham Young University study found that office employees work only 38 hours a week before they feel as if they’re neglecting their home lives, while people who work from home may clock 57 hours before feeling they’re stretched too thin. That’s because they tailor their schedules to their needs, rather than try to cram every errand, doctor’s appointment, and homework session into the precious few hours when they’re not at the office.

Suddath is a staff writer for Bloomberg Businessweek.

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