Does Working from Home Increase Job Satisfaction and Retention? Evidence from the COVID-19 Pandemic

51 Pages Posted: 25 Jan 2022 Last revised: 13 May 2022

See all articles by Christos Makridis

Christos Makridis

Stanford University; Columbia University - Columbia Business School; Arizona State University (ASU); Department of Veterans Affairs (VA)

Jason D. Schloetzer

Georgetown University - McDonough School of Business

Date Written: March 6, 2022

Abstract

We study how working-from-home (WFH) impacts employee job satisfaction and retention using proprietary data on the WFH arrangements of over 70,000 employees. We find that the positive association between always WFH and satisfaction vanishes after controlling for employee compensation, occupation, demographics, and workplace environment characteristics (e.g., feeling appreciated at work). Employees who always WFH also have a higher intention to leave their job than employees who never work from home. In contrast, less frequent WFH arrangements relate to higher satisfaction but no difference in intention to leave, and their impact is limited relative to workplace environment characteristics. We draw on work-psychology and employee well-being models to explore potential mechanisms. Working from home more frequently tends to confer higher satisfaction when employees have jobs requiring less coordination with others and when employees believe they have a ``bad boss,'' suggesting an interplay between WFH arrangements and employees' psychological states. Our results suggest that WFH is not a one-size-fits-all approach for organizations and may not be a panacea that resolves employee engagement and retention challenges.

Keywords: flexible work arrangements; remote work; job satisfaction; employee retention; employee turnover; corporate culture

JEL Classification: D13, D23, E24, G18, J22, M54, R3

Suggested Citation

Makridis, Christos and Schloetzer, Jason D., Does Working from Home Increase Job Satisfaction and Retention? Evidence from the COVID-19 Pandemic (March 6, 2022). Georgetown McDonough School of Business Research Paper No. 4016657, Available at SSRN: https://ssrn.com/abstract=4016657 or http://dx.doi.org/10.2139/ssrn.4016657

Christos Makridis (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Arizona State University (ASU) ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Department of Veterans Affairs (VA) ( email )

810 Vermont Avenue NW
Washington, DC 20420
United States

Jason D. Schloetzer

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States
202-687-2672 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/jds99/?PageTemplateID=319

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