Telecommuting: Purchasing for the Home Office

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1 Telecommuting: Purchasing for the Home Office Executive Summary Telecommuting and Procurement: Strike While the Iron is Hot Results of a new survey administered to procurement professionals by Staples Advantage, the business to business division of Staples, show a growing trend toward employees telecommuting at their organizations. While some professionals report using strategic sourcing processes and tools to manage spending on office supplies and other related products by telecommuters, the findings indicate most procurement experts do not take telecommuters into account when buying for their offices, resulting in lost savings and a missed opportunity to address the spend category.

2 Here are some of the key findings: Purchasing trends were consistent across the majority of respondents, regardless of industry. More workers are telecommuting today than five years ago, and the trend is likely to continue, with more employees working from home five years from now. Respondents noted reduced travel costs and increased retention as the biggest benefits of telecommuting. Most organizations do not take telecommuters into account when planning budgets. A third of respondents say that telecommuters purchase products for themselves out of their own pockets, with only half of companies providing reimbursement. Respondents reported spending between $100 and $500 annually per worker on office supplies; the survey further reveals that while some organizations think they re spending the same or even less on telecommuters, when asked further questions, they report they do not know what they spend on office supplies and other products for telecommuters or in-office workers. Respondents tracking this metric report spending and compliance to procurement policy is about the same for telecommuters as in-office workers. There are several areas where inconsistencies are apparent. There is a division in who is responsible for purchasing for telecommuters. Furthermore, most organizations provide no standard product list or catalog to guide telecommuters purchasing.

3 More Employees Work from Home A majority (86%) of procurement professionals responding to the Staples Advantage survey say at least some employees at their organizations telecommute; most (69%) say the figure currently is relatively low, with less than 10% of workers telecommuting. Still, the numbers are growing. Asked to consider the past five years, 67% say some employees at their organizations were working from home then, with 53% reporting that these workers represented less than 10% of their total employee population. Looking ahead, they see the trend toward telecommuting continuing. As more employees work from home, companies that consider telecommuters when making purchasing decisions for their offices will gain additional benefits from having procurement involved in managing the spend. A part of that strategy may be to begin providing standard product catalogs to help encourage program compliance and help achieve cost savings for their organizations. Reduced travel costs (36%) and increased retention (32%) are cited as the top two benefits of telecommuting, according to the survey. Additional benefits include lower overhead (17%), increased productivity (12%), and healthier staff (3%). Procurement Processes and Practices Only 28% of respondents take telecommuters into account when planning their procurement budget, indicating that there may be some organizations that could benefit from having a well-informed sourcing strategy.

4 More than 14% report they do not know what impact, if any, telecommuting has on their procurement budget, including a potential lack of visibility into telecommuting expenditures. Adding telecommuters to the budget has little impact overall; just 2% say they spend more on their purchases. When asked to share how much they spend annually on office supplies per teleworker and per in-office worker, the majority more than 35% say they do not know how much they spend per employee, and nearly 28% report they do not know how much they spend per teleworker annually, further demonstrating an opportunity for more thorough reporting and greater visibility into supply expenditures. Of those who know how much is spent annually per employee, more than 38% say they spend $100 to $500 per telecommuter annually, as compared to 28% reporting this same expenditure per employee. Telecommuters most often request office supplies (44%), technology (17%) and Internet/phone service (16%). At-home workers also ask their organizations for IT services, furniture, copy and print services, and cleaning and janitorial supplies. Based on these buying patterns, organizations should consider negotiating better prices for goods and services that fall into these categories to ensure maximum savings.

5 More than half of those surveyed (59%) purchase products for telecommuters. Thirty-three percent say telecommuters purchase products for themselves out of their own pockets, with only half of companies (46.7%) providing reimbursement. Compliance to Procurement Policy Only 23% of organizations provide a standard product list or catalog to telecommuters to guide their purchasing. This practice helps to discourage maverick or off-contract spending by telecommuters and costs associated with doing so. Seventy-five percent do not provide a standard product list or catalog. Seventy-one percent see little change in compliance levels among those who work remotely versus those working full time from the office. Only eight percent say they see less compliance among employees who work remotely. To maintain compliance, respondents: Route all telecommuter purchases through procurement (41%). Provide a budget to telecommuters to purchase needed items and services (21%). Establish standard catalogs for telecommuters (14%). Establish standard product lists (8%). Provide standard start up kits of items and services (2%).

6 Others provide remote workers with standard instructions for purchasing office supplies and other related goods and services. Conclusion With the number of telecommuters on the rise, organizations can no longer afford to ignore the potential impact telecommuting can have on their procurement practices and their budgets. Based on responses to this survey, there are some key takeaways for purchasing professionals as they continue to adapt their programs for the future: The number of organizations that don t know what they spend on supplies per office worker, either in-office or remote, presents a clear opportunity to implement thorough, end-to-end reporting that allows full visibility and a deeper understanding of the program spend, no matter where the end user sits. Even though telecommuting has grown over the past five years and is projected to continue to grow, most respondents don t plan for telecommuters as they structure their purchasing program. This indicates a clear opportunity for more up-front planning, streamlining all purchasing and giving the procurement organization more buying power with their supplier(s). In addition, as telework continues to grow throughout the workforce, the need for all parts of the organization, including procurement, to ensure telecommuter productivity and prevent alienation will also grow.

7 Without planning, reporting and compliance measures supported by key suppliers, program leakage and rogue spend will become more evident and continue to grow as the number of telecommuters grows, impacting the bottom line more over time. Suppliers who have experience and capabilities to support a decentralized workforce can help in slowing and stopping these losses through an ongoing, collaborative partnership. About the Survey Late summer 2014, Staples Advantage conducted a survey of CPOs, Procurement Vice Presidents, Directors, Managers and Category Managers. More than 200 procurement professionals responded, representing a variety of industries manufacturing, finance, education, government, healthcare, hospitality, insurance, retail, and utilities. About Staples Advantage Staples Advantage, the business-to-business division of Staples, Inc. (Nasdaq: SPLS), serves organizations of 20 or more employees up to the Fortune 1000, helping them make more happen with more products, greater cost savings and improved ordering efficiencies. Staples Advantage provides its customers, including global businesses, local, state and federal government, healthcare organizations and educational institutions, with a one source solution featuring comprehensive products and services like office supplies, technology, printing, promotional products, furniture and facility supplies, along with a customized level of account support and best-in-class customer service. More information is available at