Yahoo Ban on Employees Working From Home a Risky Move: Analysts

IT industry analysts say Yahoo's new work-at-home ban could hurt the company's chances to hire and retain top-quality employees.

Yahoo surprised many industry observers when it announced that as of June, employees will no longer be allowed to work from home so the company can rebuild camaraderie and strong interpersonal culture in the workplace.

The news came from a confidential, internal Yahoo memo that was leaked Feb. 22 to All Things D. Jackie Reses, Yahoo's chief of human resources, acting on instructions from CEO Marissa Mayer, sent out a companywide memo explaining that as of June, all workers—including those with remote-working arrangements—will be expected to work in the office.

"To become the absolute best place to work, communication and collaboration will be important, so we need to be working side by side," the memo stated. "That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together."

The decision reportedly isn't being welcomed by all Yahoo employees, and four IT analysts who spoke with eWEEK about the new policy said it could definitely hurt the company's chances of retaining and hiring quality workers.

"It is contrary to conventional wisdom, especially in the Silicon Valley and in many, many businesses where remote workers have become a common occurrence over the past decade or so," said Charles King, principal analyst of Pund-IT. "It's certainly contrary to the interests of most employees. I think there will be certain employees who will be upset by this decision," including some who will consider it a deal-breaker when considering Yahoo as a potential employer.

For many Yahoo workers being able to work from home can mean avoiding commuting two to three hours a day round trip in the San Francisco metro area, said King. "It's become pretty dreadful out there."

At the same time, though, "Mayer's goal here to rebuild Yahoo's culture is a very important and valuable goal to work toward," said King. "While employees who work remotely can be just as effective and efficient as those who work onsite, I'm not sure that it's possible to build a corporate culture if a majority of your employees never see one another."

Rob Enderle, principal analyst of The Enderle Group, wrote in an email response that the new Yahoo rules are "corporate management by policy," which treats all workers with the same overarching one-size-fits-all rules. "It takes discretionary power from the managers and forces them to treat all employees with respect to this benefit as if they had abused it. It punishes the good performers equally with the bad performers and, typically, when this is done it causes the good performers to seek employment elsewhere."

Many other large businesses that have tried to roll back opportunities for home workers have found it damaging, wrote Enderle. "Generally this is done as the result of a lack of people experience in the management staff, and then it gets reversed when that staff discovers key employees they want to hire go to other companies, or a few top employees leave citing this as the reason."