The Work from Home Calculus: Productivity + Inequality – Collaboration + Quality of Life – Cost

by Timothy B. Corcoran on February 27, 2013

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Yahoo‘s newish CEO, Marissa Mayer, recently reversed the company policy that allowed, even encouraged, employees to work from home.  This action has generated a lot of news copy, both for and against, and as is now the norm the masses are weighing in via social media.  Most views I’ve read tend to be stridently for or against working from home, with little middle ground:  one camp assumes such a policy encourages lazy people to watch Ellen all day while the hard workers toil; the other camp assumes such a policy extracts more output from workers who no longer know when the workday ends.  There are endless variations on the theme.  I first worked remotely in 1991 while living outside Boston for a Denver-based company, and since then I’ve seen every permutation and combination of work-from-home policy and I’ve seen both experienced and novice executives fumble with managing in such an environment.  My view is that such a policy is a simple study in microeconomics:  if you’re clear what outcome you’re solving for, the correct policy is easier to choose.  Wearing my former CEO hat, here are the issues I think about when deciding whether an employee may work from home.

Photo credit: LexisNexis.comInequality – Let’s tackle this right up front. Few businesses can operate 100% virtually. This means that, sooner or later, some people will have to be centrally located and won’t have the option to work remotely. Get over it. Your H.R. professionals will quake at the notion of treating employees inequitably, but that’s just one of many reasons H.R. professionals rarely end up as CEO. The fact is, treating everyone the same is a stupid idea. Hersey and Blanchard in their Situational Leadership theory posit that people have to be managed differently based on their individual skill set and the task at hand. One person might need to be micro-managed for a task that another person can handle unsupervised.   As I’ve discussed previously, too often managers make decisions out of a misguided sense of fairness, whether it’s cutting all budgets proportionally during down times without regard to profit contribution, or, in this case, refusing to allow a work-from-home policy because if we can’t offer it everyone, then we can’t offer it at all. Simply put, good leaders focus on what’s right for the business and what’s right for the individual, and when you have to break ranks and treat someone differently in order to achieve a better outcome, and you can do so without imposing undue hardships on the business, you act.

Productivity – Studies have shown that people are generally more productive when outside distractions are minimized.  I’d provide a few references here, but it doesn’t take a double blind study to agree that limiting the interruptions of phone calls, sneezing co-workers, lengthy commutes, endless status meetings, emails, periodic fire alarm drills and long lunch breaks can lead to increased focus and output. In fact, as many companies have learned, those who work from home often fail to adhere to regular work schedules and often work far more than if they were sitting in an office or cubicle for 7.5 hours each day. But the key is to recognize which tasks can benefit from prolonged and isolated focus, and which tasks are unsuitable. I can’t answer that for you, but I have enjoyed success asking my various teams to conduct a self-assessment and recommend which of their jobs could be performed remotely, and I’ve been pleasantly surprised at the candor and objectivity. And at the risk of beating a dead horse, I have rarely been impressed with my H.R. staff’s assessments, primarily because so few of them understand the business, let alone individual job designs or tasks. Will some of your employees occasionally watch television, or duck out for a dentist appointment? Of course. But no workplace, even those with an open floor plan, prohibitions against personal phone calls and restricted access to social media, is fully productive at all times.  Also, if you or your managers are unable to hire responsible adults, then I question your own competence.

Collaboration – Technology exists that fosters virtual collaboration, whether it’s the awe-inspiring Cisco Telepresence video-conference system, the document management systems allowing simultaneous annotation by multiple parties or business-oriented social media like Chatter or Yammer (although let’s not get carried away with our virtual tools!)  Trouble is, many organizations invest in technology as if its presence alone will somehow change behaviors. The fact is, where there is a culture of collaboration, people will find ways, even inelegant non-technology ways, to interact; where there is no culture of collaboration, no technology will solve the problem (One example, law firm CRM, a technology asked to solve a problem lawyers refuse to acknowledge; here’s another).  Some who work remotely will suffer from the lack of creativity and innovation sparked by interaction with others — often spontaneous and unscripted and unrelated to the given task.  Salespeople who primarily operate independently and in the field, but who periodically need more brochures or contracts reviewed, can typically do so without ever setting foot in an office. Programmers who are constantly sharing code or who regularly need input from other teams writing code sets immediately upstream or downstream tend to perform worse when they delay collaboration until pre-set meeting times rather than simply getting up and walking two rows over to compare notes. Again, you’ll have to assess the importance of collaboration in your own organizations, but don’t underestimate its importance, even in jobs that don’t ostensibly appear to benefit from it.

Cost – A former colleague of mine substantially raised his profile and career prospects by spearheading a controversial initiative to close all regional offices and send employees home to work, saving millions of dollars in office leases, equipment and presumed lost productivity from employee commute times.  Like many organizations, we talked of long-term strategy in our annual reports but spent most of the year focused on short-term performance, and make no mistake we saved a lot of money and boosted earnings for a few years through this initiative.  But be sure to focus on the net savings, once the transition costs are calculated. For example, in our case we had to purchase desktop computers or laptops for scores of employees, reimburse in full or in part for an extra phone line (this was before ubiquitous high speed internet access), and reimburse for hotel meeting rooms and countless Starbucks for confabs of small groups who needed to interact regularly. Our savings were still substantial, but your mileage may vary.  An economist might also point out that one man’s cost savings is another man’s cost shifting. For example, those who regularly visited customers were now required by IRS guidelines to treat their first and last appointments of the day as a commute, which is not typically a reimbursable business expense. The company saved a few bucks in the short run, but the employees devised ingenious solutions to limit their personal outlay by re-arranging their days (and impairing their productivity) in ways that we didn’t anticipate. (For more on the cost savings vs. cost shifting debate, see this health care example.)

Quality of Life – An employee who was facing some troubling family health issues and who needed to be home approached me and asked if he could work from home.  The nature of the work he performed for me was pricing analysis, forecasting and modeling, and he could access all systems from home and join meetings by phone or, with sufficient time to plan, in person.  He was far too valuable to lose, and his remote working arrangement posed no burden to the company (other than feelings of inequity from other cubicle-bound colleagues), so I agreed.  For quite some time he was able to attend to his family issues and deliver a quality work product.  When his situation changed, he returned to the office, grateful to his forward-thinking employers for the opportunity.  Without question, the loss of income would have burdened him as would the loss of his specialized expertise have burdened us. It was an optimal arrangement.  For me, even when I was a HQ-based executive, I periodically worked from home in order to avoid the stress of my harrowing hour-plus commute on the highways of New Jersey.  Simple common sense suggests that, all else being equal, a happier employee is a more productive, stable employee.

Your own calculus may differ.  To me this is a fairly straight-forward linear programming equation.  Factor in the things that matter to you – cost, quality of life, productivity, collaboration, equality, etc. – weight the factors accordingly, determine specifically what you’re solving for, and do the math.  If cost savings is what matters most, you may choose a different path than someone focused on employee retention or someone focused on a short-term max productivity to push a product out the door.  And don’t invite the contribution of the silly protectors of the status quo, the H.R. staff, unless they can add demonstrable value.  Whatever you choose, make it a rational choice based on a variety of factors.  And if you choose to conduct this analysis at home on your comfy recliner while watching funny daytime TV, you have my blessing.


Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, click here or contact him at +1.609.557.7311 or at


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{ 5 comments… read them below or add one }

Timothy B. Corcoran March 7, 2013 at 10:20 am

To be clear, I’ve seen studies that indicate workers can be more productive from home, but I haven’t seen studies indicating workers spend more hours working while at home. That point is drawn from my own experience — both my own personal experience and the many people who have worked for me over the years. One woman who worked for me encountered a child care issue and asked for a flexible work schedule or work-from-home flexibility. As part of her pitch, she told me she’d be available at all hours and would work diligently, and she was a bit offended when I asked her to track her hours. I had to caution her that without a fixed work schedule like one has in an office, the conscientious among us tend to work more than required. Therefore, our memo of understanding indicated the number of hours she was expected to work, and if she chose to work more than these hours it was of her own volition. I’m not a labor lawyer and I can’t speak to the wage and hour issues, but as Robert points out it’s just as likely that some workers will work more than required as it is that some will work less than required. Employers should be aware of the consequences and factor that into any program they design.

Robert Clark March 6, 2013 at 4:10 pm

Good analysis of the cost savings of not having office space for workers. On the other hand, commute time savings are rarely if ever paid by employers so from the employer’s point of view, that is no savings at all.

I wonder if your reference to studies which shows more employees work more hours from home than they would at the office is setting up a big Wage and Hour lawsuit.

Isn’t there a quote something like “the pursuit of consistency is the purview of little minds”. I know it is butchered but the point is to be strong enough to be inconsistent if you are a leader.

Jayne February 28, 2013 at 12:09 pm

Meanwhile, to the issue of fairness…

“good leaders focus on what’s right for the business and what’s right for the individual, and when you have to break ranks and treat someone differently in order to achieve a better outcome, and you can do so without imposing undue hardships on the business, you act.”

Recently read a fascinating book, “Quiet: The power of introverts in a world that can’t stop talking,” by Susan Cain (who happens to be a lawyer). I’m simplifying her thesis here, but thanks to an introvert’s natural tendency to shut up, listen, and observe, they have a lot to offer (organizations, businesses, etc.) as long as they have adequate time to retreat, consider and analyze, and recharge. Cain cites various studies that show introverts can only absorb so much social stimulation before they need to recharge. (Also true for extroverts but in their case they need to collapse!) Telecommuting, even a couple days a week, or providing an office with a door will help. This has not been my experience in the traditional law firm setting where even having your office door closed for a few hours will raise eyebrows.

I am an introvert who can fake extroverted behavior as required, but I can’t process thoughts until I am closed up in my office. It took me years of working in law firms to figure this out. When I finally did, I requested to work remotely one or two days week so I’d have time to think. The answer was no. People will “wonder” what you’re doing. How will we explain that? It isn’t fair! So, the theory there was that thinking isn’t working? Or was it even if you’re not doing something productive, at least make it look like you are? Both are shortsighted. Working from my home office, even one day a week, would have been good for my productivity—thus for my employer. In addition, it would have been good for my sanity and prevented me from burnout, which eventually happened. But it wasn’t fair.

I concur that there is no substitute for face-to-face collaboration and the chance ideas that come from random office encounters. As an independent consultant I make it a rule to spend at least one to two days a month inside the client’s law firm offices—more if needed. Things that transpire face-to-face may not transpire via email or conference calls. But I also know that what I learn and observe while in the office will come clear to me once I am back in my cave. I can think, analyze, and help them move forward. That’s what they pay me for.

In a business environment obsessed with the charisma of extroverts, it’s tough being an introvert. It may not be fair, but for the introverted employee who is stuck inside the social confines of an office without a place to retreat and recharge (closed door or a home office workday) it can be professional suicide. To not recognize this is unfair.

Timothy B. Corcoran February 28, 2013 at 11:29 am

Lisa, that’s a fair point. The subtext was unintentional, I can assure you. I sorted through hundreds of similar images and then I found one that not only illustrated the issue, but also linked to a discussion for employers on the legal ramifications of work-from-home policies. I thought I was brilliant for finding such a nexus. So I take your point about the implied message but that was not where I was going and I’m sorry if I exacerbated any myths.

Lisa Solomon February 28, 2013 at 10:57 am

I am disturbed by the image you chose to illustrate this post. I strongly doubt that, if you had chosen to illustrate the post with a picture of a man working from home, the man would have been holding a baby.

The image you used plays into the unfair assumption that mothers who work from home when their children are young do not give their full attention to work, but are constantly distracted by childcare responsibilities. Responsible work-from-home mothers (and fathers, for that matter) arrange for childcare during their working hours. If the children are young, that may mean a live-out nanny (the choice I made when my kids – now 10 and 15 years old – were young) or day care. When the children are older, the childcare issue is addressed for most of the day by school (or, during the summer, camp).

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