New research reveals that working from home stifles innovation

New research suggests that while remote and hybrid work arrangements improve employees’ work-life balance, they can also stifle innovation.

While remote and hybrid work arrangements improve employees’ work-life balance, new research suggests they may hinder innovation.

A study led by economists from the University of Essex and the University of Chicago found that employees who work in a hybrid model are less likely to come up with innovative ideas than their colleagues who always work in the office. Employees who work from home always tend to generate lower quality innovative ideas than those who work in the office.

„Innovation in the workplace can happen through random, spontaneous 'watercooler’ conversations between employees,” explained lead researcher Dr Christoph Simroth. “However, these 'production accidents’ are less likely to occur when employees work from home. Our research finds that innovation suffers as a result.

Post-pandemic, many companies are hesitant to implement a full-time return to work from the office and have adopted a hybrid model, with employees getting the best of both worlds, spending some days in the office and some at home.

Research findings and recommendations

Many business leaders are concerned that innovation will be stifled by these new ways of working. The new study, published in the journal Scientific reportsTheir concerns are valid.

„Of course, this cost of innovation can be acceptable given the significant benefits to employees in terms of work-life balance, which makes more flexible employers more attractive,” said Dr Simroth, from Essex’s Department of Economics.

„Our findings indicate that organizations need to take steps to coordinate when employees are in the office. Innovation doesn’t work well if half the team is 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 work, it results in innovation. Our results suggest that the benefits

The study included more than 48,000 employees from a large Indian IT company who worked from the office, worked from home, and engaged in hybrid work. While innovation is not a core part of their job, the company has taken significant steps to promote a culture where all employees see innovation as a core part of their work, and the company provides financial rewards for fostering innovation at work.

Employees write down ideas for process improvements, cost-saving measures, or new products, which are then evaluated and implemented or rejected by the organization.

Although the quantity of ideas did not change during working from home compared to working in the office, the quality of ideas suffered. In the post-hybrid era, the volume of ideas submitted decreased and innovation suffered, especially in uncoordinated teams when they worked in the office or from home.

Reference: 24 July 2024, „Employee innovation during office work, work from home and hybrid work”, by Michael Gibbs, Friedrich Mengel and Christoph Simroth. Scientific reports.
DOI: 10.1038/s41598-024-67122-6