VideoAs a CFO in these still uncertain economic times, imagine saving $3,000 per employee per year. And lopping $71 million off your real estate bill. Oh, and how about a 4 to 12 percent boost in employee productivity?
Sound good? Those are some figures thrown around by advocates of telecommuting, or, as some prefer to call it, teleworking. While the numbers may be optimistic, they do suggest that working from home isn't just good for commute-weary employees but for employers as well. But properly equipping a remote employee is more complicated than you might think, as is deciding whether the investment truly pays off. More vexing still may be the issue of who should take the lead in pushing for—or pushing back on—work-from-home arrangements.
Not everyone agrees on just what constitutes a teleworker. The International Telework Association & Council defines one as an employee who works at home, at a client's office, in a satellite office or telework center, or on the road at least one day per month. Even restricting the definition to an employee who works from home at least one day a month, there are 23.5 million teleworkers in the United States. Using research firm IDC's more-conservative standard of three or more days per month yields a population of 8.7 million telecommuters.
However these workers are defined, their numbers are increasing, at least by some measures (as with the total population, growth rates vary depending on how teleworker is defined). To be effective from home, they typically rely on a computer, often a laptop that travels back and forth from home to office; an Internet connection, preferably broadband and not dial-up; a telephone; maybe a fax machine; and, increasingly, a growing range of corporate-based software applications that can be accessed from home.
Also close at hand, of course, are family members, pets, and maybe the plumber, coming sometime between 10 and noon. With distractions, obligations, and temptations in abundance, productivity is bound to suffer. Isn't it?
Not necessarily. Most corporations with large numbers of teleworkers report productivity increases, not declines. "A number of companies fear their workers will be at home with their feet up in front of the TV, and that's just not the case," says IDC analyst Merle Sandler. "You can put measures in place to see if employees are actually producing what they are expected to produce."
Four companies that employ large numbers of teleworkers—Cigna, Hewlett-Packard, AT&T, and Sun Microsystems—report both jumps in productivity and savings on office space. In the current fiscal year, Sun reported a $71 million reduction in, or avoidance of, office-space expense due to teleworking, according to Eric Richert, vice president of the company's iWork Solutions Group, in Newark, California. At AT&T, telework director Joseph Roitz reports that the extra hour of work gained each day by telecommuters last year translated into a $148 million operational benefit. And Cigna's 6,000 "E-workers" delivered 4 to 12 percent more output than office workers doing similar work, not to mention the $3,000 per employee the company saved on reduced office space, according to Lynne Kelley-Lewicki, Cigna's team leader in charge of integrated work strategies.
Much of the productivity gain stems from having an office across the hall from the bedroom. At Sun, employees channel more than half the time they would have spent commuting back into their work hours (working an additional 1.8 hours for every 3 hours formerly spent in transit).
And telecommuters tend to keep closer track of their time spent on the job. "People working flexible hours are actually driven more by time management than anyone else," says Paul Hart, finance director at Microsoft UK, a 2,000-employee unit of the $33 billion U.S. software giant. "They know they've got a certain number of hours in the day to get a job done, and they can arguably deliver better results than people who actually work [in the office] five days a week."
But the biggest savings come in real-estate costs and related office expenses. "It's enabled us to gradually shrink the footprint of our work space," says Debby McIsaac, director of work-life programs at HP. At Cigna, departments may get less real estate than they request, on the assumption that the company's flexible work program will reduce the need for space. The company admits that savings require savvy management, because often leasing or buying decisions have been made without telework in mind.
For years, companies with telecommuters have moved toward so-called hoteling—providing employees with access to offices and meeting rooms that can be used as the need arises but are not occupied full-time. Offices tend to be underutilized at least two-thirds of the time. "With lunch hours, sick days, nights, weekends, and travel, the actual office-space usage for most offices is about 30 to 35 percent of the time, and office-space sharing enables companies to increase their usage of one of their most costly assets," says Gil Gordon, president of Gil Gordon Associates, a telecommuting consultancy in Monmouth Junction, New Jersey.
The trend is so pronounced that office-design firms and furniture makers now tackle it with flexible cubicle and room partitions and furniture that can be moved and reconfigured to meet a variety of needs throughout the week. A recent study of real-estate trends conducted by the Urban Land Institute and PricewaterhouseCoopers LLP cited hoteling and telecommuting as factors contributing to the current weak demand for office space. And today, one-quarter of new homes include a room specifically designed to be used as a home office.
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