Stagnate from home? Hybrid and remote work models are killing innovation among employees, study finds

As companies worldwide navigate the post-pandemic landscape, many have embraced remote work—where employees work from locations outside a traditional office, typically their homes—and hybrid setups, allowing staff to split their time between home and the office.

However, many business leaders have voiced concerns over creativity and innovation suffering with these new work modes. Now, a study published in Scientific Reports has provided evidence to support these fears.

Conducted by economists from the University of Essex and the University of Chicago, the research indicates that employees working under a hybrid model are less likely to generate innovative ideas compared to their colleagues who are consistently in the office. Moreover, those working remotely tend to produce ideas of lower quality.
A case for random 'watercooler' conversations at work
The study tracked over 48,000 employees from a major Indian IT company across different work arrangements: full-time office work, full-time remote work and hybrid models. While innovation isn't central to these employees' daily tasks, the company has implemented financial incentives aimed at nurturing and rewarding innovative thinking across the organisation.

The researchers found the innovative ideas to be the highest among full-time office workers. Although the quantity of such ideas remained constant during remote work periods too, their quality deteriorated. The hybrid working phase, in particular, saw a drop in both the quantity and quality of ideas, especially within teams that struggled to coordinate their office and home workdays.

“Innovation in the workplace can occur through random, spontaneous 'watercooler' conversations between employees. However, these 'productive accidents' are less likely to occur when employees work from home. Our research has found that innovation is suffering as a result,” explained lead researcher Dr. Christoph Siemroth from Essex's Department of Economics.

“Of course, this cost to innovation may be acceptable, given the significant benefits for employees in terms of work-life balance, which makes more flexible employers more attractive.”

The study’s findings suggest that to enhance innovation, companies need to consider more structured hybrid schedules.
Dr. Siemroth added: “Companies should take steps to coordinate when employees are in the office. Innovation does not work well if half the team is in on Mondays while the other half is in on Wednesdays. Instead, set days where the whole team is expected in the office. While this limits the flexibility of hybrid work, our results suggest that innovation benefits as a result.”

As businesses continue to adapt to evolving work models, finding the right balance between innovation and convenience remains crucial. Maintaining this thoughtful equilibrium will be key to thriving in a landscape where both employee satisfaction and creative excellence are paramount.