IT:Goodbye, Dilbert

Telecommuting can help companies save space and money. But they must pay attention to the legal risks.
Michelle GabrielleNovember 15, 2000

Dilbert go home.

Over 62 percent of Fortune 1000 companies encourage the deployment of telecommuting, or teleworking, programs, according to a survey conducted by Kinetic Workplace, a company that helps businesses establish new workplace strategies. Teleworking is often touted as a super perk for employees. But it can also generate significant cost benefits for employers—if they stay mindful of the risks involved.

Tim Kane, president and chief executive officer of Kinetic Workplace, explains how teleworking can help generate a greater return on assets by having more and more people work from home.

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By reducing the amount of square footage leased, for example, a company can save money and make better use of it. “In downtown San Francisco,” says Kane, “one square foot costs $90.00.”

Pittsburgh, Pa.-based Kinetic Workplace has partnered with several major corporations, helping employers set up teleworking prorgrams. Hewlett-Packard Company is one of them.

John Hanousek, HP’s director of new business, says that from a cost perspective, teleworking enables a company to benefit from a growing workforce without having to build new buildings.

Since HP teamed up with Kinetic, the company has set goals for itself that include savings of about $1 billion dollars through the reinvention of HP’s work processes. “The real estate portion alone is $100 million of that,” says Hanousek.

Hanousek notes that HP has already reached “well over 50 percent” of its goal. And, in just the past six months, the company has added 3000 new employees in its consulting department. All of them are equipped to work in a mobile environment.

“The majority of the work force is going to be mobile in three to four years,” predicts Hanousek. “We’re gearing our group with lap- tops and cell phones so that they can easily dial and connect into our network. The mobile population performs in a very different atmosphere than the former Dilbert-population cubicle environment,” says Hanousek.

Out of 80,000 Hewlett-Packard employees, “about 25 percent now work full or part-time from home,” he said. This arrangement has proven extremely successful in retaining employees—a tremendous concern to employers considering the nation has hit a record high for unemployment.

Especially in large companies, the risk of high turnover can be great. More and more companies are discovering that when they deploy a significant percentage of teleworkers, they experience low employee turnover, as well as reduced absenteeism, both of which can cut costs.

“It costs us about [$30,000 to $50,000 dollars] to hire every new employee,” says Brad Murphy, chairman and CEO of Digitalesp, a strategic and technical e-business consulting service.

“In our industry, turnover is usually between 25 and 30 percent; ours is 5 percent,” says Murphy.

Murphy attributes Digitalesp’s low turnover rate with the company’s “ability to provide employees with the opportunity to work in a virtual environment.” Murphy adds that Digitalesp is saving about $600,000 to $1million a year in employee-turnover costs.

In addition, says Murphy, “teleworking enables us to offer exciting and challenging work to extremely skilled workers, both globally and domestically.”

And, according to a study conducted by Dallas- based, Joanne H. Pratt Associates, an organization that studies the benefits and risks of home-based work, “the cost of absenteeism is less than if the same ‘skilled employees’ took a full day’s leave for each occurrence. This is simply because they are equipped to work from home.”

In addition, for each day off taken by a teleworker, for example, “the cost, based on an average salary of $44,000 and average of 20 absentee events per year, would be $3,313,” according to the study, which is based partly on a survey of 247 teleworkers. Employers who encourage teleworking save 63 percent of the cost of absenteeism or $2086 per teleworker per year.

Yet while teleworking can save employers some hefty dollars, employers must be sure to establish strict policies and procedures for their teleworkers, experts say. Communication and awareness are key; without them, what has become a mutual employer-employee dream, can quickly become an employer’s nightmare.

“One of the greatest risks of failure in a telework program is the selection of the wrong people to participate,” warns Michael Dziak, president of InteleWorks, Inc., a company that helps employers set up telework programs. Employees who perform at a marginal level in the office are not likely to perform any better when they are outside of the office, he notes.

Dziak, who is the author of RemoteControl System Pro, a guide to help companies maximize business potential through telework without hiring a consultant, suggests establishing specific criteria that an employee must meet in order to qualify to work from home. This also prevents another risk of telework: decreased company moral.

Aside from the threat of employee resentment for not being allowed to participate in the company’s telework program, employers must also be aware of the legal risks created by employees working at home.

Dziak suggests that to avoid an unjust claim for worker’s compensation, employers should create a binding document that maintains that the employee will only file a claim, if and only if, an accident was indeed work related. “Don’t choose employees who seem prone to file false claims.”

Choosing employees who have proven solid work ethics can prevent the dangers of teleworking. Security, for example, is another major issue for employers. There is always a risk of the “introduction of viruses, stolen material, as well as a loss of intellectual capital,” says Dziak. Employees should all be trained strategically to prevent any of these events from occurring. For example, a how-to lesson on transferring documents can always come in handy.

In addition, “if you don’t have rules and purchasing restrictions for technology in place,” says Dziak, “suddenly, technology costs for teleworkers could get out of hand, not to mention make it very difficult for the company’s support department to monitor or track the computers or network in use.”

“Turning potential risks into positive benefits,” says Dziak, is key to establishing and maintaining a cost productive telework program.

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