Employers Find Telecommuting Brings Savings Plus Productivity

Ann All
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Telecommuting is often touted as a way for folks to save money by cutting down on their drives to work, thus saving on gas and vehicle maintenance. But it yields savings for employers as well, which is why the practice may grow in the slumping economy.


Victor Liu, president of Link High Technologies, a New Jersey provider of managed IT solutions and network services, says he's noticed an increased interest in telecommuting among his clients in the past three to six months, with many of them opting not to renew leases on satellite offices and allowing those employees to work at home instead.


An office consolidation strategy facilitated by telecommuting has yielded cost savings for Sun Microsystems, where more than 19,000 employees, or 56 percent of the workforce, work away from the office at least once a week. Kristi McGee, senior director of the company's Open Work Services Group, says Sun shrank its real estate holdings by 15 percent in fiscal 2007, which "significantly lowered real estate operating costs." Expenses for employees who work from home at least part of the time range from 30 percent to 70 percent less than those for employees who work in offices.


Though some early advocates of telecommuting, including Intel and HP, are recalling some workers to the office in an effort to consolidate operations, Sun's Open Work program continues to expand, says McGee. It started in 1994 with 200 flexible employees and has been growing ever since. The biggest growth spurt came from 2000 to 2002, when the number of telecommuting employees rose from 3,100 to 12,750.


In addition to bottom-line cost benefits, virtual workers can improve a company's financial performance by boosting efficiency. John Halamka, CIO of the Massachusetts-based CareGroup Health System, cites several efficiency gains that have occurred since his company began allowing remote work by medical record coders, who apply codes to patient hospital stays for billing purposes. Coders are traditionally tough to recruit and retain. But CareGroup has eliminated job vacancies by creating a virtual team of coders around the country, says Halamka. Discharges now are coded faster than in the past, and bills spend less time in accounts receivable. Remote coders also seem more willing to work extra hours when needed.


Productivity often rises for employees working at home, and companies benefit when employees work from home rather than taking an entire day off due to illness, medical appointments or other personal situations. From the Telework Foundation's Web site:


1. Productivity increased 31 percent among the 9,000 telecommuters in British Telecom's workforce of 80,000.


2. At JD Edwards, telecommuters are 20 percent to 25 percent more productive than office workers.


3. According to Nortel, the cost of equipping an employee to telecommute is recovered in the first year if only three-and-a-half days that would otherwise result in time off can be saved. That number drops to one-and-a-half days in subsequent years.


Telecommuting allows companies to expand their pool of potential hires by not restricting themselves to those living within driving distance of an office, says Sara Sutton Fell, founder and CEO of FlexJobs, an online service that helps people find jobs that offer telecommuting.


Telecommuting also helps companies retain top talent, instead of losing them, says Fell. She recently met with the human resources director of a Colorado company that does not offer any type of telecommuting or flextime options for its employees. The director told her more than three-quarters of female employees in the HR department quit over the past three years due to the company's "hard-line approach" on telecommuting. Fell has two sons, ages 2 and 6 months, and says she appreciates the ability to work from home while raising the boys. "There's a lot going on in our lives today, and I think anything that makes it easier to spend more time with our families is a good thing," she says. "Telecommuting can give you the flexibility to do what you need to do, so you don't need to sneak around to schedule a doctor's appointment for a child, for example."


Telecommuting offers flexibility to employers as well as employees. Dan Demaree, CEO of the DPR Group, a public relations company, is considering opening satellite offices in areas where the company has no existing physical presence, an option that wouldn't be possible without telecommuting. A desire to retain valued employees is why the DPR Group began offering telecommuting to seven employees in its metro Washington, D.C., office and seven employees in its Cary, N.C., office, about a year-and-a-half ago. Three of the seven employees in metro D.C. telecommute on a regular basis, says Demaree, largely to spend more time with young children or satisfy other family commitments.


Until now, the company has tailored telecommuting programs to individual employees. But Demaree wants to include a more standard policy in DPR Group's employee manual, which is being updated now. And he's struggling a bit, he acknowledges.


"Some people are very disciplined and work just as well at home as they do at the office. But from a practical point of view, some people don't. They are easily distracted and find it more difficult to maintain productivity. The problem is, the employer doesn't always know which is which," he says. "When you come up with a policy, you want to enable employees to telecommute, but you must have a provision to pull people back into the office if it's not working out."


Policy tends to present a bigger challenge than technology, says Fell, noting that instant messaging, e-mail and Web conferencing are inexpensive and readily available technologies that help connect remote employees. She says the best way to ensure employees possess qualities needed to work at home - which include strong communication skills, self-discipline and a "proactive personality" - is to inquire about them during the interview process. "Ask job candidates whether they'd describe themselves as self-disciplined with their time," she suggests.


At Link High Technologies, where three employees based in Atlantic City telecommute regularly and employees in an office in Denville, N.J., telecommute on an as-needed basis, Liu found that support positions were not as well suited to telecommuting as sales and marketing positions. "It's difficult to easily escalate support issues when you can't just peek over a cubicle and ask for help. You have to IM (another support person) or conference them in," says Liu.


Meredith Johnson, chief people officer at Gevity, a provider of human resources software and consulting services, says telecommuting doesn't work well for positions that require frequent face-to-face customer contact or access to in-office reference materials. "Those won't travel well, but those that are heavy on computer work, require great concentration, and have clear objectives can be ideal," she says.


Employees with a history of high performance and demonstrated self-accountability are the best candidates for telecommuting, says Johnson. Don't forget supervisors, she adds. They may need training in a "management by results" approach, since many managers employ a more traditional "management by observation" style.


Though Demaree knows of several PR agencies that employ only remote workers, he thinks a mix of virtual and in-house employees makes more sense for most companies. "Do it when it makes sense, not just to do it," says Demaree, noting that account coordinators responsible for answering phones, greeting clients and other administrative duties are expected to work at the office most of the time.


Working with global teams necessitates remote work, says Jay Mulki, a marketing professor at Northeastern University's College of Business Administration, who has published research on telecommuting and its impacts on the workforce. More than half of his research sample of a new study to be published soon came from IBM, which he says is typical of multinational companies where work transcends time zones. "If you want to compete in a global environment, you have to have people available to talk to each other all the time. The traditional workplace has lost its meaning," says Mulki. "I don't think we'll ever go back to traditional offices where sales people all come in at 8 a.m., go out to the field and then come back at the end of the day. That's gone."


Mulki is likely right. According to Gartner, more than 12 million people telecommute at least one day a week, up from about 6 million in 2000, and the number is expected to hit 14 million in 2009. While Mulki believes telecommuting offers many advantages to both employees and employers, he says some forms of communication can suffer when employees telecommute. "At the office, we tend to ask spontaneous questions. You lose that spontaneity when you use structured or scripted communications like e-mail," he says. "This can happen in traditional setting as well, but it's more common in remote settings. Also, many people look to their colleagues to learn the kinds of informal rules that help govern your behavior but are not contained in any formal policy document. This is difficult for remote workers to do."


Communication quality tends to be less of an issue, Mulki says, if telecommuters feel they know and can trust their fellow workers. IBM fosters such feelings among its employees by periodically asking telecommuters within a given region to congregate at central meeting places where they can get to know each other better. Companies such as IBM also encourage remote workers to gather in virtual workplaces, where they can post photographs and personal information about themselves and participate in online activities that mimic those in a real-world office, such as gift exchanges.


Employers should also take care to ensure that remote workers don't lose the improved work/life balance that telecommuting can offer by not turning off the technologies that make it possible for them to work at home. "We found that the very technologies that allow them to work remotely are keeping them fully engaged in their work and making it difficult for them to break away from it," says Mulki. A strategic approach to telecommuting "will exponentially increase likelihood of success," says Sun's McGee. "Companies have to be clear about why they are investing in a flexible work initiative and establish clear value for the company, management and employees. Base decisions on data, and be prepared to measure results and communicate program impacts."

Add Comment      Leave a comment on this blog post

Dec 16, 2010 3:17 AM Sophia Sophia  says:

Telecommuting is really a great way of working at home, excellent article . I wish more and more companies adopt this system where-ever it is possible as it will save lot of driving and there by, save fuel , save environment and save world..

Jan 24, 2011 6:43 AM Ralph Ralph  says:

I think telecommuting would solve the problem of traffic and environmental damages. It would also improve performance if properly utilized

Jan 28, 2011 12:22 PM Telecommuting Job Guy Telecommuting Job Guy  says:

The corporate culture still has to get over the notion that employees will

be less efficient if they telecommute. It simply isn't true. Companies that

offer telecommuting enjoy improved productivity of 7% to 20% or more.

Mar 5, 2011 11:45 AM Mary Mary  says: in response to Mark Savushkin

Mark, you have to understand that not any kind of job can be done "online", in fact those jobs that can be done from home are normally a minority.

Mar 5, 2011 12:11 PM Mark Savushkin Mark Savushkin  says: in response to Sophia

You are right Sophia, telecommuting is indeed a great way of working at home. Myself I work from home, and our my relation with my boss is done by email and phone.

Mar 6, 2011 11:29 AM Bands Bands  says: in response to Mark Savushkin

Mark, you made a point here, and yes, it may work with some kind of jobs very well, but it's more about the personality and the commitment of both, the employer and employee.

Some years ago I used to work for a company, suddenly they asked me to try telecommuting with them and work from home, they paid me for a home office, and at the beginning it was great. After a couple of months, things started to go bad, because once I didn't have anyone controlling me, specially because they told me that I had freedom to schedule my time, I started to get distracted by my son and my wife, and eventually I had to ask the company to work from the office again. I hope this short story helps to understand that not every situation suits to work from home

Aug 20, 2011 7:38 AM Professional Employer Organization Professional Employer Organization  says:

From my experience of working with small businesses, I know for a fact that telecommuting is untapped source of gold. There are so many advantages of telecommuting it's unfathomable. Think about the possibilities:

-No driving to work = less emissions into atmosphere

---No rush hour

-No problems with getting to work on time

-Maximize time off (no time wasted driving) means a happier workforce

I could go on, but you get the idea. More people & more employers need to know the facts about this mostly uncovered subject.


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