World Class Faculty & Research / April 6, 2017

When a Telecommuting Pioneer Calls Its Workers to the Office

SMITH BRAIN TRUST – What does it mean when a pioneer of the telecommuting workforce begins to curb its work-from-home practices? For IBM, it means a massive culture shift, say experts from the University of Maryland's Robert H. Smith School of Business. And while the tech giant might be hoping it results in a surge in innovation, it also might spark a surge of resignations.

IBM announced in February that it was ending work-from-home policies for thousands of marketing employees, many of whom had never commuted to an office. It was the latest co-location push for the company, following similar mandates affecting design, security and information technology employees, among others.

Big Blue, as IBM is known, had been a pioneer in the telecommuting movement since the 1980s, adopting it for its own teams and building the technology to enable it. By 2009, the company was boasting that 40 percent of its 386,000 global employees didn't even have a traditional office space. What's more, work-remote innovations had helped the company reduce its office space by 78 million square feet between 1995 and 2009, at an estimated savings of $100 million annually.

Studies have shown that telecommuting can increase productivity among some workers, in part by reducing workplace distractions, cutting down on commute time, and minimizing sick days. It can also be motivating for workers who enjoy the greater autonomy that often accompanies telecommuting, says Gilad Chen, the Robert H. Smith Chair in Organizational Behavior.

But there are trade-offs, says Kathryn M. Bartol,  the Robert H. Smith Professor of Leadership and Innovation, chair of the Management and Organization Department and co-director of the Smith School's Center for Leadership, Innovation and Change. One of the tradeoffs is innovation, experts say. And that's key for IBM.

"There is something valuable to be gained from coworkers being around each other and hearing what other people are working on, and having opportune conversations," Bartol says. "Companies are trying to leverage the knowledge of people who work for them." When people are at home and they have knowledge that other people can benefit from, it's harder to get that knowledge to transfer. "No one is physically around each other," she says. 

For marketing teams, which are creative and collaborative, and for research and development teams, Chen says, there is value in being at the office. "The synergy among members, which is required for  that creative work, tends to function better when people meet and work face to face," he says.

That's why office spaces today include more than just conference rooms, offices and cubicles. They are more home-inspired, with kitchen and living-room areas for collaboration, as well as ping pong and billiard tables. "If people are able to interact more, then serendipitously, that is where good ideas evolve," Bartol says.

For IBM, navigating a change

Taking away an employee perk, particularly one in place for decades, may come with a cost. "The movement from more autonomy to less autonomy is very difficult," says Chen, who is also the editor of the Journal of Applied Psychology. "Some people will end up quitting, but there might be a situation at IBM, or elsewhere, where a company calculates that that's a cost that is worth taking to enhance much-needed innovativeness."

People today are looking for more flexibility in their work, not less, says Nicole M. Coomber, management and organization lecturer at the Smith School. "If companies don't give the option of at least some flex time, they are going to lose out on talent," she says.

Coomber tells a story about a job interview she had a few years back. Seeking to get a read on the corporate culture, she says, she asked about the firm's policy of working from home. "They were like, 'Yeah, we work from home every night after we work from the office all day,'" says Coomber, mother of four boys and owner of Managing Motherhood, a media and consulting firm. "I thought, well, this isn't going to work for me. It was just that clear. Not for me. And I was OK with that. You have to consider what's right for you."

'The war for talent'

A recent Gallup poll showed that 43 percent of Americans worked from home at least some of the time. For IBM, the move to ditch telework could send "the wrong message" to millennial workers who are looking for jobs, Coomber says.

"When my top students get a job offer, they get multiple job offers. And these are the things they are thinking about – flexible work, as well as all the other benefits," she says. "The war for talent is real."

Not everyone wants to work exclusively from home, Bartol says. So, for some, the change may be a welcome one.



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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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