The Cost of Face Time

By Heather Chapman (New York City)

U.S. companies could save upwards of $260 billion dollars a year by implementing a telework (also known as “telecommuting”) policy. So says Undress for Success, an online resource site for people who work from home. Using recently released U.S. Census figures and data from several different studies, as well as their Telework Savings Calculator, they also determined that U.S. consumers could save around $228 billion dollars a year and that the U.S. government could see $14 billion dollars in savings.

Currently, there are less than 6 million people in the U.S. who currently work from home, half of whom are not self employed. But, according to Kate Lister and Tom Harnish, publishers of the Undress for Success site, there are another 33 million people working in the U.S. whose jobs are suitable for teleworking. They say that if these people worked from home for half of the time, “businesses could improve their bottom line by over $7,900 per new telecommuter per year—the result of lower real estate, electricity, absenteeism, and turnover costs together with increased employee productivity.”

Undress for Success found that, thanks to teleworking:

• Sun Microsystems saves $70 million a year in real estate alone;
• McKesson saves $2 million a year in real estate and other expenses;
• Dow Chemical saved a third of its non-real estate costs through telework;
• Best Buy, British Telecom, JD Edwards, and American Express show home-based employees to be 20-40% more productive than their office counterparts.

The Glass Hammer reached out to additional sources to see what they thought about teleworking and if they too had seen savings like this for their own companies or themselves.

Grace Tiscareno-Sato, a Senior Global Marketing Manager at Siemens Communications, agreed that teleworking is an amazing opportunity for both the company and its employees. Citing cost savings in real estate, the leasing of office equipment, and transportation, she also mentioned that “teleworking was once thought of as a luxury for the employee, but that isn’t the case any longer. Employees expect to have this sort of flexibility at work, and once they start teleworking, they don’t want to go back. There is no longer the need to drive into work daily for face time if no one is working at the office, and there is the additional benefit of not having a daily commute.”

Ms. Tiscareno-Sato also pointed out that once employees begin teleworking, the rate of employee retention rose, which is another way that companies will see savings. Speaking for herself, she said, “it’s hard to tempt the employee away when other companies don’t offer this kind of work flexibility and freedom.”

A final point that Grace offered was that by having a workforce that works remotely, “organizations now have the ability to market themselves as a greener company, which improves their company profile with potential and current customers, shareholders, and employees.” She gave LiveOps, a leading distributed call center that is headquartered in Palo Alto, California, as an example. In a 2007 press release, LiveOps stated that “its use of home-based customer service agents has avoided the use of over 1. 4 million gallons of fuel per year, and the associated carbon emissions. By working from home, LiveOps’ 10,000 home agents have saved a staggering $4,281,248 ($3.00/per gallon) in gas money. According to CEO Maynard Webb, ‘Companies and governmental organizations are all finding ways to support the cutting of carbon emissions. One by one, 10,000 LiveOps home agents are helping, too. By running their own home-based businesses, home agents have cut out their daily commutes, saving them time and money and also sparing the environment.’ ”

Jennifer Flaa, CEO of Vettana, a software quality assurance (SQA) company, agrees that teleworking is absolutely essential for any company today. “As a high-tech business-owner, the coolest thing about telecommuting is that it opens up a vast pool of talent. We are not limited geographically [in] finding personnel, but can use the best talent around the globe in order to provide outstanding service to our clients. Telecommuting also aids in employee retention. Businesses invest in, and rely heavily on, their knowledge workers. If someone has to move, they no longer have to quit. They can still do their job from their new location.”

Jennifer also mentioned how the savings her company sees from having her employees work from home are shared with her company’s clients. “The bottom line is that our virtual business (with telecommuting workers) saves our clients money. We are able to keep our overhead low and pass that savings on. That strategy was key to keeping us in business during the dotcom bust and is serving our clients well as our economy is in recovery mode.”

Jean Murray, a Product Manager at Siemens, says that being able to telework “helps with the work-life balance. As I manage teams everywhere from Europe to the West Coast, if I had to be in the office, I would never see home.” She adds that “[a]lthough my hours are long, I can schedule in trips to the gym or run errands around my other responsibilities to make sure everything gets done both personally and professionally.”

Jean did point out what she sees as the downside of teleworking, noting that “[a]ny type of creative development activity, brainstorming, or solution development is much easier and arguably much more productive in person. A number of tools and techniques are available which help with these challenges, but one of the best remedies is to have targeted in-person meetings planned for these types of activities where possible. This also helps renew and refresh team relationships, which helps maintain a good team dynamic during the times between in-person meetings.”

Caroline Co, senior manager of professional sercies at Avaya Professional Services, says, “Avaya has been working with many customers to deploy teleworking programs through its technologies and consulting services. Much like our customers, we too have benefited from leveraging our own solutions to enable employees to telecommute.” Caroline pointed out that about 70% of Avaya’s Professional Services organization is virtual; as a result, the company has seen its real estate costs lower. “The flexibility of our solutions lead to improved retention and provides Avaya with a broader talent pool beyond specific locations.”

Avaya has also noticed the additional green benefits that teleworking has provided. “Our internal study shows we have saved 3 million pounds of carbon annually. We have also reaped tax credits by allowing teleworking. Our customers achieve similar benefits in lower real estate costs, carbon emission reductions, and increased employee retention.”

On a personal level, Caroline appreciates the benefits that teleworking provides her. “As a global company, I need the ability to work early in the day or late at night. At Avaya, I can work anywhere as long as I have my laptop.” She also notes that “[l]iving in California, commuting is a challenge. Working from home not only saves me gas, it affords me a better quality of life by saving me anywhere from an hour or two of sitting in traffic everyday. I can just as easily be at soccer games or in a different state—and it’s seamless to the people I work with. Overall, our technologies have given me the flexibility and latitude to better balance my work and personal life.”