For better employee retention, why hybrid work may offer the most value

In the post-pandemic world of work, employee and employer expectations for where work gets done continue to evolve. In an effort to provide clarity around the business value of in-office versus hybrid work arrangements, Stanford University professor and work-from-home expert Nick Bloom led a research project at one company that yielded insightful results—particularly around the impact of hybrid work on employee retention.

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The project, published this month in Nature, followed 1,612 employees at a large multinational Chinese technology company, Group, who were randomly selected to go from working five days a week in the office to three in-office and two at home. After the six-month study, the hybrid group had 33% lower turnover and greater job satisfaction than employees working full-time in the office. Group had approximately 32,202 employees when the experiment was conducted.

Subsequently, Group leadership established a permanent hybrid policy, giving all employees the option to work remotely on certain days.

More with Nick Bloom: Many RTO policies are failing, research shows. Here’s how to fix them

What it means for HR leaders

Organizations have struggled with the debate over the benefits of remote, hybrid and in-office work since the pandemic started in 2020, resulting in heated employee protests against coming back to the office and employers threatening to fire workers who didn’t adhere to a return-to-office policy.

Nick Bloom, employee retention
Nick Bloom, Stanford

However, Bloom wrote last week in a LinkedIn post, the Group research highlights positive employee and business impacts from the shift to hybrid.

Bloom says the transition to a hybrid schedule did not affect organizational performance. Before the hybrid pilot, company managers surveyed expected productivity to fall by 2.6%. However, after the trial, which was conducted from 2021-22, managers found productivity increased by more than 1%.

Bloom says the project also did not impact employee performance or access to promotions or development opportunities, often cited as an important consideration for bringing workers back to the office. For instance, a 2023 study by Executive Networks found that more than 70% of HR leaders surveyed believe in-office workers benefit from proximity bias, or favorable perceptions by managers and leaders, compared to remote and hybrid workers.

The hybrid arrangement was well-received by those in the experiment; 93% of those who participated said they used their time more efficiently, while more than three-quarters reported stronger wellness outcomes.

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Such factors can influence retention, with the Group study demonstrating the potential business impacts of hybrid.

“Given that each quit cost the [technology] firm about $20,000, this saved millions a year, making hybrid very profitable,” Bloom says.

Among those in the hybrid group, turnover was particularly lower among female employees, non-managers and workers with the longest commutes, Bloom says.

“In industries struggling with gender diversity—like finance and tech—this is another benefit,” Bloom adds.

Dawn Kawamoto, Human Resource Executive
Dawn Kawamoto
Dawn Kawamoto is HR Editor of Human Resource Executive. She is an award-winning journalist who has covered technology business news for such publications as CNET and has covered the HR and careers industry for such organizations as Dice and Built In prior to joining HRE. She can be reached at [email protected] and below on social media.