Employee Innovation During Office Work, Work from Home and Hybrid Work

The Covid-19 pandemic forced firms globally to shift workforces to working from home [WFH]. Firms are now struggling to implement a return to working from the office [WFO], as employees enjoy the significant benefits of WFH for their work-life balance. Therefore many firms are adopting a hybrid model in which employees work partly from the office and partly from home. We use unique and detailed data from an Indian IT services firm which contains a precise measure of innovation activity of over 48,000 employees in these three work environments. Our key outcomes are the quantity and quality of ideas submitted by employees. Based on an event study design, the quantity of ideas did not change during the WFH period as compared to WFO, but the quality of ideas suffered. During the later hybrid period, the quantity of submitted ideas fell. In the hybrid phase innovation suffered particularly in teams which were not well coordinated in terms of when they worked at the office or from home. Our findings suggest that remote and hybrid work modes may inhibit collaboration and innovation.