Yahoo Rebuffed: Alternative Workspace Creates More Productive Workers

Working from home

It’s been two months since Yahoo CEO Marissa Mayer angered the alternative workspace world with her ban on telecommuting from virtual offices. Now, a new report from the U.S. Census Bureau is giving her detractors more ammunition.

According to the March report, 13 million people – that’s nearly 10 percent of the U.S. workforce – worked from home at least one day a week in 2010. That figure is up from 7 percent in 1997. And Global Workplace Analytics found that 95 percent of employers report that telecommuting has a high impact on talent retention.

What’s more, a 2012 study published last year in the Monthly Labor Review noted that telecommuters typically work five to seven hours more a week than their office-bound colleagues. And numerous companies report that allowing employees to telecommute from a virtual office makes them happier and more productive.

Yet, Dottie Lam, the former first lady of Colorado, a social worker and political activists, points to reports that Mayer searched employees’ virtual private networks and found that many remote workers were connecting to Yahoo infrequently or not at all.

“OK, if this lack of connection proves that certain workers are slackers, why shouldn’t they be cast out of the company (as in fired) rather than pulled closer in, along with all those workers who are performing just fine from home?” she asks.

“Stanford economics professor Nicholas Bloom recently published a study showing that telecommuting employees at a Chinese company ‘enjoyed a 13 percent increase in productivity’,” Lam continues. “And in the U.S., a survey conducted by Comp TIA (a non-profit IT trade association) found that 67 percent of industry respondents rated productivity as telecommuting’s chief benefit.”

Jim Connolly, an organizational behavior consultant and a partner with Thomas, Connolly & Phelps, also believes Mayer’s decision to ban telecommuting is a bad move because as workers integrate more technology into their lives, the flexibility of working from anywhere and at any time is becoming as routine as having your paycheck direct deposited. Less flexibility for employees means lower employee satisfaction.

“Retracting the ability to telecommute will make working at Yahoo less appealing to current and potential employees. Employee turnover is likely to increase. Other employers should take note,” Connolly says. “By adding commute time to the workday, Yahoo employees may be less likely to put in additional evening and weekend hours that they are working now. As a result, productivity will fall.”

As Connolly sees it, removing a significant employee benefit does not go over well. Employees may expect more cash compensation in order “to be made whole.” Obviously, he notes, more office space will be required and that will drive up the cost of doing business, which Yahoo cannot afford.

“If other companies follow Yahoo’s decision, they will also suffer similar negative impacts,” Connolly says. “Technology is not going away so telecommuting is not going away. Those companies that figure out how to do it more effectively than others will have a competitive advantage.”

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