Telecommuting: benefits, challenges, and workplace implications

Telecommuting -- a Strategy for Profitability

Letter of Transmittal

4482 Pearl Avenue

Louis, Missouri 63032

Phil Finnegan

CEO

Burgess Realty & Title Company

3396 Elm Street

Santa Maria, California 93681

John Thompson

Letter of Transmittal

Background of what is out there in telework

Obvious Advantages of telework

What a company needs to consider

What does a company hope to accomplish?

Where telework employees work [illustration]

Personnel & Equipment / Set-Up costs

Building community in virtual workplace

Diversity & best candidates for telework

Employer rationales for launching telework [table]

Conclusion / Recommendation

Works Cited / Bibliography

List of Figures - Burgess Realty & Title Company

Employees at Burgess Realty & Title

Estimated number of Burgess employees to become teleworkers

Present cost of 30 cubicles (at $10,000 per work station) per year: $300,000

Cost of set-up for 20 Burgess employees (at $500 per employee) to telework: $10,000

Annual support costs, 20 Burgess telework employees (at $600 per employee): $12,000

New annual costs, 10 Burgess employees in the office: $100,000

Total annualized set-up and support costs for 20 Burgess teleworkers: $22,000

Total [Estimated] Annual Telework Savings for Burgess: $178,000

Executive Summary

The technology revolution that has exploded over the past twenty years or so has made it possible for companies to alter their corporate culture and operational structure by embracing virtual workforce options. Allowing some employees to work from remote stations -- usually at home -- allows the company to cut costs, streamline operations, and save employees the time and expense of driving automobiles to work. There are positives and negatives to be given serious consideration when a company considers telecommuting as a strategy. These issues are covered thoroughly in the body of this paper. Overall telecommuting has great appeal to American businesses; aside from some possible drawbacks (due to poor planning), it can be beneficial.

Overview

A substantial number of companies are now employing telecommuting strategies, and for good reason given the high cost of office space and the expense to employees of driving to work. Meantime, how does a company go about approaching a virtual makeover? What are the first steps and what are the potential obstacles? What are issues that need to be addressed vis-a-vis a company with culturally diverse workforce? How much cost savings can be expected? These matters and others will be addressed and presented in a business context.

Body -- Telework is a Smart Idea

Background Review of What's Out There: When Midwest Family Mutual Insurance switched from a traditional business operation to a virtual company in the summer of 2006, nearly all of the company's fifty employees began working at home. According to WFC Resources Newsbrief the makeover cost Midwest Family Mutual about $1 million, but in the first six months of operating as a virtual entity the company enjoyed a fifteen percent increase in efficiency. Notwithstanding the million-dollar investment -- mostly in technology hardware and software purchase -- the savings for Midwest were immediate. Those savings included the benefit of moving out of a 24,000-sq. ft. building and into a far smaller location. All Midwest needed was "just enough space for a few offices, a boardroom, a computer training center and cubicles any employee can use" if they decide to drop in and interact with supervisors, according to WFC Resources Newsbrief.

Midwest Family Mutual Insurance is just one of tens of thousands of businesses that have become virtual by allowing employees to "telework" -- and have become, in many cases, more efficient in a leaner, meaner profit-based environment. According to WorldatWork there were (as of 2008) approximately 33.7 million Americans employed by a company in a virtual workplace -- working from home at least part-time -- which is a huge increase from two years earlier when 28.7 million were employed in a telework environment (Rhodes, 2009). The two main reasons for a company going virtual (at least to some degree) -- the desirability for both employees and employers -- are bolstered by an increase in job performance by between three and twenty-five percent (MITE). Moreover, working virtually is a good idea because it makes sense for most enterprises, and the proof is in the numbers. To wit, in the five years between 2003 and 2008 the number of once-a-month virtual workers increased 43% (Rhodes, 2009); the most common locations for telecommuting are home (87%), the WorldatWork group reports.

What are the Most Obvious Advantages of Telework?

According to WorldatWork, a dispersed workforce (telework) will: a) increase a company's "agility" (remote workers are more flexible); b) "minimize disruption" following an interruption due to violent storms, earthquakes, power outages, floods, etc.; c) allow a "speedier rebound from disruptions or disasters; d) "shorten downtime," reduce lost revenue, and "improve customer responsiveness in emergency situations; and e) increase competitive advantage because a "strong continuity plan" helps a company position itself as a secure place.

Moreover, from an environmental standpoint, having employees work from their homes lessens the carbon footprint, keeps cars off the road, and from a personal economic position the telework strategy saves employees money they would otherwise spend on fuel and saves wear and tear on their automobiles (especially in difficult economic times when gas prices hover around $3.00 a gallon).

What a Company Needs to Consider Before Launching into Virtual: Getting Started

There are eight steps to take when launching a virtual employee program, according to the 134-page pdf called "Exploring Telework as a Business Continuity Strategy" prepared by an association of human resource professionals from Fortune 500 companies (WorldatWork.org). One, the groundwork has to be laid by establishing goals and appointing a planning team. Two, the risk factors must be fully vetted -- and the team must research how the organization mitigates risk. Three, key resources must be identified including: "The people, the technology, support services, training and facilities you'll need" to make telework successful. Four, the costs certainly must be taken into consideration; a comparison assessment needs to be made juxtaposing a telework solution with the "cost of housing essential employees in workplace recovery centers." Six, procedures need to be developed that show "how you'll use telework in your business continuity program." Seven, a selling job must be done on company leadership and staff; without having executive buy-in the program will never fly. Eight, "Test and maintain plans and procedures. Conduct practice drills to test plan components. Update plans to stay current" (WorldatWork.org).

Business Plan: What Does the Company Wish to Accomplish? Mission Statement.

In order to address immediate issues prior to launch, a mission statement should be prepared demonstrating the organization's commitment. Once in place, the company's business-continuity (BC) committee needs to "establish a cross-functional task force" to lay down specific plans for a telework operation (WorldatWork.org). The BC committee must able to leverage the expertise and intelligence of task force members on a regular, timely basis.

If the signs and the research point to going ahead with a virtual workplace -- using a substantial number of employees on a full-time (5 days a week) or part-time (1-3 days per week) basis -- then real-world telework experts should be brought in from HR, IT, and perhaps real estate. This is a very important step in the process of creating a telework program; in fact the search for competent, experienced people is among the most important things management and leadership will be undertaking (WorldatWork.org).

Indeed, the titles that the leadership should be looking for include: "work-life manager"; "virtual work expert"; "mobility project coordinator"; "flexiplace analyst"; "alternative office manager"; "remote programs administrator"; "workplace strategist"; "telecommuting coordinator"; and "transportation program manager" (WorldatWork.org).

The BC team that is in place should have on board a proven IT genius; this is "essential," the WorldatWork Web site asserts, because infrastructure and technical support for the digital systems needed will be the driver to keep the company moving forward. Another important, pivotal person that needs to be on the BC committee is a corporate communications expert; building program awareness will be critical, and a communications professional from the company -- a person who is already familiar with the company culture and company goals -- will fit well into the development of sound, effective telework strategies.

It should be part of the BC committee's task to identify safe and comfortable venues from which employees may do their jobs, since not all workers with virtual employers are conducting their duties and responsibilities at home (Graph below: WorldatWork.org, p. 17).

Business Plan: Personnel Costs, Equipment & Database Needs.

What are the average costs to set up teleworkers at home? Using data from Cisco Systems, WorldatWork estimates that a one-time set-up for an employee is between $500 and $1,500. Annually the support costs (not including salary of course) range between $300 and $700 per worker. Compare that with the $10,000 companies pay annually to lease and maintain each employee workstation. WorldatWork / ITAC research posits that the annual "productivity gains plus reduced office space, support and other infrastructure-related costs generate a $5,000 annual savings per broadband teleworker" working from home just one day a week.

Part of the set-up process should include an inventory of staff talent: a company needs to develop a database system "to catalog [staff] capabilities and equipment" including phone numbers, address, personal email addresses. If suddenly a key telecommuter is unavailable for any reason, alert organizations have "hordes of unofficial 'guerilla' teleworkers" that can step in remotely as needed. Hewlett-Packard (HP) for example has set up a "teleworker-tracking" database; this allows HP to use competent substitutes on a moment's notice, helping HP to "leverage the competitive Internet access rates for the home office." The HP system also provides flexibility to existing staff; indeed, 70% of HP's workforce in the U.S. has the training and ability to work remotely and about 10,000 HP employees "have given up dedicated office space entirely" (WorldatWork.org).

Business Plan: Building Community in the Virtual Workplace.

Although clearly there are economic and production positives with teleworkers, there are problems that need to be addressed prior to setting up a telecommuting system. Jennifer L. Carpenter's essay "Building Community in the Virtual Workplace" points out, "Social interaction is an important component of all work arrangements" (Carpenter, 1998). And yet with a virtual workplace, a sense of isolation can creep in. "Nowhere are the social challenges of the Internet so pronounced as in the virtual workplace" (http://cyber.law.harvard.edu) Carpenter explains. Online interaction will never replace "face-to-face contact," Carpenter writes, adding that many potential telecommuters fear isolation because they have always seen the workplace as a venue for social interaction.

Carpenter asserts that the social barriers that now exist with telework "must come down"; companies need to develop online chat rooms and "virtual water coolers" so teleworkers can "build the same types of interpersonal connections via Internet that they do in person" (Carpenter). She also recommends that managers should be responsible for getting to know their teleworkers "socially before they start working." Carpenter insists that some managers should be assigned "to supervise only remote workers" because those managers who have both virtual and in-house staff will more than likely "give more attention to those in the office."

Writing in Human Relations, Timothy Golden points to another potential problem that can arise in virtual workplace situations. Inevitably there are people still working in the home office, and those non-teleworkers are in some ways negatively impacted by the absence of teleworkers. For one thing, non-teleworkers are at risk of having "decreased flexibility in conducting their work activities, since greater restrictions are placed upon them when coordinating and adjusting" their unique tasks and schedules (Golden, 2007, p. 1643-44).

To wit, on-site workers must alter schedules to be available when teleworkers come in to the office; also, they must "hold off on sensitive or complex discussions until face-to-face discussions can be held" (Golden, p. 1644). Beyond that, telework dynamics are likely to "change the scope and amount of workload experienced" by the staff that remains in the office; indeed, the on-site workers may well have to "assume additional responsibilities which might otherwise be handled by a teleworker," but due to the teleworker's absence, fall into the hands of those present in the office (Golden, p. 1644).

Golden brings up the point that because in-house employees (non-teleworkers) do not as a rule enjoy the freedom and flexibility of teleworkers, some edginess and jealousy may well result. "It is likely that decreased co-worker satisfaction will be associated with higher turnover intentions," Golden explains (p. 1649).

Business Plan: Diversity -- Which Employees are Best Candidates for Telework?

Auxillium West, nationally known for human resources software, explains that because of the diversity of employees a thoughtfully prepared survey should be used to sample the "organizational climate" and the "attitudes" of employees toward the notion of telework. "Carefully designed questionnaires provide personal comments about the overall support" for telecommuting and will bring out concerns "about potential drawbacks" (Auxillium). A pilot study may be necessary to determine how telecommuting will be received by certain personalities. No matter what ethnicity or nationality -- or pay grade -- the candidates are, they should be screened to be sure they exhibit the following (www.auxillium.com): self-motivation; above average organizational and "time management" skills; the ability to work with a "minimum of supervision"; and a true excitement for the opportunity to telecommute.