Practical Problems
Once a company decides which employees can telecommute, there are numerous practical matters involved in setting up a telecommuting program. For example, does the potential candidate have a dedicated work space at home? Have adequate child-care arrangements been made? Does the company want the telecommuter to observe core working hours? At management consulting firm Watson Wyatt, for example, telecommuters are required to work at least from 10 a.m. to 4 p.m.
In addition, legal issues have to be addressed, such as how much control employers can exert over the working conditions inside an employee's home, and whether the employer is liable in the event of a home accident. De Pietro, for example, explains that at the University of Michigan, "our primary issue was to set up a safe and ergonomically well-designed work area. We didn't want employees to just set up a computer on the kitchen table." To guard against that, de Pietro's group has published a booklet on telecommuting policies that includes everything from the proper number of smoke detectors to instructions on how to fill out a workers' compensation claim.
Then there is the matter of expectations. KPMG's Parente points out that it is necessary to measure the goals of telecommuters rather than hours worked. Traditionally, managers manage by "line of sight," he explains. But with telecommuting, managers need to be "retrained to focus on goals and objectives rather than hours worked." At Motorola, for example, "we have set quantifiable goals and objectives for years, measured by quarterly reviews," says Tynan. Specifically, the company measures productivity in terms of the telecommuter's job — how many lines of code are written per week, for instance, or how many pages of documents are edited during a similar time period — against set goals. Such standards have allowed the company to measure a 12 percent average increase in productivity among telecommuters since the program's inception. Says Tynan, "The revenue generated by this productivity increase more than offsets the costs, even for an individual's first year."
Finally, a successful telecommuting program has to take a long-term view, according to Gordon. "It's a no-brainer to set up a pilot program," he says, but companies are often ill-prepared to expand telecommuting beyond that. At many companies, he explains, allowing 15 to 20 people to telecommute works fine, but when the program is rolled out for 75 to 100 employees, companies often realize that their computer and telecom infrastructures can't handle the capacity. Parente recommends developing a comprehensive business case that shows the payback and the benefits before moving beyond the pilot stage. "Developing such a case allows you to secure and retain the resources and commitment from senior management that is necessary to expand the program," he says.
A Cost-Effective Solution?
Much has been made of the low cost of telecommuting, but there is still a price. Says de Pietro, "It's going to end up costing [business] more rather than less [to set up a telecommuting program]. We would be foolish to ignore the fact that we are buying laptops and equipping home offices with ergonomic furniture."
A study by Pacific Bell of its telecommuting program, for example, which involves at least 25 percent of its 12,000 salaried employees, estimates that the cost of at-home equipment for participants, including computer, fax machine, and printer, is about $4,000 per employee. If the employee already has a home computer, the price tag may be only a few hundred dollars for software, but could range as high as $5,000 to $6,000 if the employee requires a high-end computer with special equipment.
Costs at Motorola are similar, according to Tynan, but going down. Back in 1993, he says, the costs to implement the telecommuting program averaged $6,487 per employee. This included a number of one-time costs, including computers, fax machines, and telephone lines. With the price of computers and ISDN service declining, that figure has dropped to $3,739. Costs after the first year average $1,440 per telecommuter, mostly for linking the telecommuter's computer to the company's network.
Much of the savings from telecommuting is supposed to come from real-estate costs. But as it turns out, one of the thorniest decisions involved in launching a telecommuting program is whether to maintain corporate offices for telecommuters. At the University of Michigan, the task force determined that offices should not be eliminated. "We ruled that out from the beginning, because we didn't want people to feel that this was just a cost-saving measure," says de Pietro. "We thought people would be very suspicious of something like that. If someone is doing this three to four days a week long term, we may ask them to share office space, but that would be only after we reviewed the situation."
However, companies whose employees work at clients' or customers' offices don't have that luxury, says Linda Russell, senior partner with Toronto-based Telecommuting Consultants International Inc. "If you consider that real estate constitutes your second-largest monthly overhead, right after salaries and benefits, most companies are not in a position to put someone remote and keep a candle burning for them back in the office."
IBM Corp., for example, started implementing an aggressive hoteling program for its field personnel in 1993, and now close to 100 percent, or more than 20,000, of its field employees use such a scheme, according to Andre'a Jackson-Cheatham, the communications software manager in Norfolk, Virginia, who implemented IBM's first virtual office site, in Norfolk. Each field employee has a laptop that he takes with him all the time. Whether he works at home, at a client site, or at an IBM "visitor center" — open environments equipped with individual rooms for customer conference calls or meetings — the laptop can connect to the employee's server just as if he were in his own office.
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