1-03-91 INFORMATION MANAGEMENT: STRATEGY, SYSTEMS, AND TECHNOLOGIES EVALUATING ORGANIZATIONAL READINESS FOR TELECOMMUTING Nancy Blumenstalk Mingus INSIDE Benefits and Drawbacks of Telecommuting; Corporate Telecommuting Policy; Critical Success Factors; Organizational Readiness Checklist HISTORY OF TELECOMMUTING People have been working from home for centuries, but during modern times, the return from the office to the home has been slowly gaining acceptance. The term telecommuting was coined in 1974 by scientist Jack Nilles. Nilles has written several books on the topic since then and he continues to help businesses develop telecommuting programs. Throughout the last 25 years, more and more organizations have acknowledged the benefits of telecommuting. As nations and companies continue to find more efficient means of linking workers to corporate computer systems, as more nontraditional workers join the workforce, and as smog and other pollution continues to threaten the environment, organizations without telecommuting policies are becoming the exceptions. BENEFITS OF TELECOMMUTING There are several benefits of telecommuting to both the worker and the company. For the worker, these benefits include: lower commuting time lower commuting expense PAYOFF IDEA Mergers, acquisitions, downsizing, outsourcing, and even the Clean Air Act are forcing organizations to offer telecommuting options. This article presents a brief history of telecommuting, the benefits and drawbacks of telecommuting from both management and worker perspectives, and the experiences of some organizations that have successfully implemented telecommuting. It also outlines the critical success factors for effective telecommuting implementations and includes two checklists designed to measure whether organizations are ready for telecommuting workers and if the workers themselves are ready to telecommute. 08/99 Auerbach Publications 1999 CRC Press LLC
lower food expense lower clothing costs higher job satisfaction higher productivity Depending on the type of work involved, and corporate locations, the benefits can also include: more flexible work schedule less distractions no need to relocate This article takes a look at each of these benefits in more detail. Lower Commuting Time. People working traditional telecommuting jobs from their homes can cut their commute time significantly. With an average commute of one-half hour to and from work, workers can save one hour per day. This hour may be spent working, or it may be additional personal time. It is up to the worker. Lower Commuting Expense. Commuting to work has several associated costs. If one drives, one needs gas, at least; and the commute may also require parking and tolls. If one takes public transportation, the commute still requires fares. That half-hour drive may cover 10 to 30 miles, depending on the roads traveled. Saving 20 city-driving miles per day would save an average of one gallon of gas per day, which at the average U.S. rates is about $1.00 per gallon. Saving 60 highway-driving miles per day would save approximately two gallons per day; so in gas alone, one could save from $5 to $10 per week, or $20 to $40 per month. Add in parking at $5 per day and tolls of $2 per day, and the savings rises to $50 to $70 per month. Lower Food Expense. Face it: lunches out are not cheap. Even lunches at the fast food chains cost an average of $5 per day. Lunches at fancier places can run $10 to $15 per day. If one eats out everyday, one could save $25 to $75 per week, or $100 to $300 per month. Even if one only eats out twice a week, one could save $10 to $30 per week, equating to $40 to $120 per month. Lower Clothing Costs. If one works at an organization that still requires business suits for work attire, one needs at least five suits averaging $100 to $300 each. Suits last for one to three years with regular use, so telecommuting can save $500 to $1500 over a three-year period. Even if one works at an organization that has gone to business casual or casual, clothing costs can be high. Business casual shirts and pants or skirts
average $20 to $50 per piece, and they also last for one to three years with regular use. Not replacing these could save $200 to $500 over a three-year period. Higher Job Satisfaction. Most people who telecommute feel more in control of their work and they enjoy it more. This keeps them happier in their work, with less burn-out. Higher Productivity. Because there are generally fewer distractions and interruptions, people who telecommute have a higher productivity. They may actually be able to work fewer hours and get more accomplished. More Flexible Work Schedule. Depending on the type of telework, one may have a more flexible work schedule. One may be able to work for three hours in the early morning, then five hours late at night, scheduling work around family commitments. The only teleworkers who generally must stick to a schedule are those in customer-oriented roles who must be near phones for specific times of the day. Less Distractions. Also depending on the type of work, telecommuting may provide fewer distractions. Generally, these include fewer phone calls, fewer drop-bys by co-workers, etc. No Need to Relocate. Not too long ago, corporate promotions meant moving to headquarters. Today, however, it is not uncommon to live in Portland, Oregon, and work for a company with corporate headquarters in Omaha, Nebraska. This allows teleworkers to stay in their homes while still improving their positions in organizations. This increases job satisfaction and productivity. The company can also reap tremendous benefits from telecommuting. These benefits include: less office space requirements less time wasted with office chat fewer attendance problems capability to employ disabled or distant workers who cannot commute higher job satisfaction higher productivity Depending on the type of work involved, the company benefits may also include: less employee turnover lower relocation expenses Now take a look at these corporate benefits in more detail.
Less Office Space Requirements. This is the major corporate benefit to telecommuting. Depending on the location, businesses pay anywhere from $6 per square foot of office space to $15 or more per square foot. With small cubicles averaging ten by ten, or 100 square feet, that means each worker costs $600 to $1500 per year in office space. For every ten workers, the company also needs approximately 200 square feet of meeting space and space for copiers, etc. Having ten people telecommute can save $7200 to $18,000 per year. Having 200 people telecommute can save $144,000 to $360,000 per year. Less Time Wasted with Office Chat. Hanging out by the water cooler does not happen often anymore; but whenever people share office space, they will find a place to congregate. Sometimes this congregation is work related, but all too often, workers are simply gossiping or discussing past or future sports events. Estimates on this type of lost time vary from 1 to 2.5 hours per day. Workers earning $20 per hour cost the company $100 to $250 per week in office chat time, which equates to $400 to $1000 per month. Fewer Attendance Problems. Childcare problems, sick children, and personal health often keep employees from work. Other attendance-type problems include perpetual tardiness, extended lunches, and the like. These problems are eliminated or significantly decreased when employees telecommute. Teleworkers can still work when their children are sick, and many can often work when they themselves are sick, but could not have come to an office. Question: how does telecommuting prevent or avoid the problems of perpetual tardiness or extended lunches? It is doubtful that managers would be willing to have employees with these problems become telecommuters, but the issue should be addressed because the topic has been raised. Capability to Employ Disabled or Distant Workers Who Cannot Commute. When employees telecommute, it opens up the potential labor pool. People who would require special adaptive equipment at work or who would have to move to a corporate location can easily telecommute. This lets the company hire the best workers for each position. Higher Job Satisfaction and Higher Productivity. Higher job satisfaction and higher productivity have the same advantages to employers as they do to employees. Employees are happier and can generally get more work done in less time. Less Employee Turnover. Because employees are happier, they stay longer on their jobs. Because hiring and training new workers can cost
$2000 to over $10,000 per worker, the longer they stay, the more money the company can save. Lower Relocation Expenses. Technology has reached the point now that workers do not have to move to corporate headquarters to work. This not only saves on office space, but can save the $2000 to over $10,000 per worker for relocation as well. Note: The relo number looks very low. An organization likely spends well over $50,000 on a relo by the time housing differential, moving, etc. costs are paid. DRAWBACKS OF TELECOMMUTING There are also drawbacks to telecommuting for both the worker and the employer. For the worker, these drawbacks include: lack of physical contact potential to be left out of the loop potential to overwork While there are more benefits than there are drawbacks, these drawbacks are significant and need to be carefully evaluated. Take a look at each of these in more detail. Lack of Physical Contact. Because humans are social animals, many people feel isolated without the daily contact with co-workers. Potential to be Left Out of the Loop. Without being on site on a daily basis, the old adage out of sight, out of mind tends to come true. Telecommuting workers must make sure they are included in group decisions and information distribution networks, as they would be when on site. Potential to Over-Work. Believe it or not, people are often so happy with their work that they work all the time. Telecommuters need to establish relatively regular work hours or they will burn themselves out by working 12 to 14 hours per day. For the employer, the drawbacks include: more need for strong communications infrastructure more need for well-defined job duties/tasks/requirements jealousy on the part on non-telecommuting workers managers feeling of lack of control These drawbacks can be minimized as follows:
1. Need for strong communications infrastructure. Because telecommuters often feel left out, companies must make sure that the communications infrastructure includes them. If not, they will miss out, or feel like they are missing out, which has the same negative effects. Note: Excellent point. Can one add an example of an infrastructure that includes them? A couple examples that come to mind are dialing in for staff meetings, and ensuring that all memos are distributed via e-mail. Certainly, there are others that one can include here. 2. Need for well-defined job duties/tasks/requirements. Managers can no longer manage by walking around when workers telecommute, so workers need well-defined job duties and measurable tasks and deliverables. This is often difficult to set up initially, but is key. 3. Jealousy on the part on non-telecommuting workers. If only selected people can telecommute, co-workers may envy those who telecommute. This means managers must make it clear as to why certain individuals are allowed to telecommute. Note: One may want to add that it is important to have clearly defined criteria for which jobs (and people) are eligible for telecommuting. This might be a place to indicate that employees with performance or attendance problems would not normally be considered for telecommuting. 4. Managers feeling of lack of control. Many managers have a hands-on management style and have a difficult time letting go of their employees. This may mean that organizations need to retrain managers who have telecommuters, or they may need to hire managers with different styles for these telecommuters. Any examples or suggestions? TELECOMMUTING ORGANIZATIONS Hundreds of organizations now have formal or informal telecommuting policies. These include banks, manufacturing companies, government agencies, educational institutions, and insurance companies. Some of the better-known organizations include the state of California, the city of Los Angeles, Pacific Bell, Travelers, Aetna, New York Life, and Key Bank. One of the largest telecommuting organizations is IBM. While IBM prefers to use the term mobile workers, it has one of the largest telecommuting staff in the world. According to Bob Egan, Project Executive for Global Mobility and Productivity at IBM, the company has equipped 75,000 to 100,000 employees with their mobility tools. Of these 75,000 to 100,000 employees, about 60,000 really use the tools on a regular basis, 27,000 of these in the United States and rest worldwide. IBM had 10,000 mobile representatives in place by end of 1995, and the program went worldwide in 1995. IBM is a prime example of the success of this type of working. IBM spent $41 million equipping these workers, and has saved $75 million per year in real estate expenses alone; but the success has not been just
financial. In in-house surveys, IBM has found that 87 percent of the teleworkers found they were more or much more productive than they were prior to telecommuting. CRITICAL SUCCESS FACTORS While the benefits and drawbacks above and the readiness checklist below (Exhibit 1) both allude to factors for success, Bob Egan (IBM) and most telecommuting organizations and employees agree that there are three critical success factors for implementing a telecommuting program. These are: clearly defined, measurable objectives strong communication system belief in telecommuting Take a look at why these factors are critical. Clearly Defined, Measurable Objectives. Because of all the drawback factors mentioned above, judging the success of telecommuting can be highly subjective. To make sure it is as objective as possible, the telecommuting policy and job descriptions must be clearly defined and measurable. It also helps to have a series of objectives for both the short and long terms. Strong Communication System. Because telecommuters are not on site as frequently as other workers, there is a high potential for forgetting about them, leaving them out of the decision-making process and the results of those decisions. For these reasons, the organization needs a strong communication system. Internal and external documents need to be circulated to teleworkers; meeting dates and times need to be passed on to teleworkers; even office parties, birthdays, and other special occasions should be communicated to teleworkers. They may not need to be involved in the activities, but it is comforting to know about them. This information flow must also go both ways. When this type of information flow does not exist, both the organization and the workers suffer. The hardware and software tools of today allow for this IBM even sells its secrets of success but it is up to organizations to implement them correctly. Belief in Telecommuting. It has been proven in countless types of ways that expectations influence final outcomes. If managers and employees expect telecommuting to fail, it most likely will. Both the managers and employees have to believe that telecommuting will produce the needed benefits. If not, then the success will be consciously or un-
EXHIBIT 1 Readiness Checklist Organization Checklist Does management believe in telecommuting? Do the workers have clearly defined and measurable job duties/objectives? Do you have a strong company/team communication network in place? If not, are you willing to implement one? Do you have the technological infrastructure capable of supporting telecommuting? If not, are you willing to implement one? Individual Checklist Do you have a physically separated spot in your home to work? Do you have enough discipline to work when you would rather be doing something else? Do you have clearly defined and measurable job duties/objectives? Can you work in relative isolation from colleagues? consciously undermined. Unfortunately, this lack of belief is also ingrained in most people. Touting the benefits will not convince skeptics. They may pretend to play along, but will be pleased to say, I told you so in the end. Exhibit 1 allows one to judge whether an organization is ready for telecommuting. Answer the questions as things are now, not as one hopes they will. When organizations implement telecommuting sooner than they are ready, they run the risk of failing. References 1. Gil Gordon Associates: http://www.gilgordon.com/want.html. 2. Jala Associates: http://www.well.com/user/jala/index.html. 3. Kelly & McGraw: http://allison.clark.net/pub/kmgraw/telgd1.htm. 4. Telecommuting Advisory Council: http://www.telecommute.org. Nancy Blumenstalk Mingus is president of Blumenstalk Associates, Inc., Williamsville, NY, which specializes in writing, training, and consulting on project management and human resource subjects.