Telework Savings Potential

Telecommuting Could Halve our Gulf Oil Dependence . . . and So Much More

Our Telework Savings Online Calculator allows community representatives to quantify the existing and potential telework savings for every city, state, county, and region in the country. Our latest update (March 2009) allows companies to customize the model and calculate their own savings potential.

Currently only 4% of the U.S. workforce  works from home, but 40% hold jobs that are compatible with telecommuting. If those employees worked at home just half of the time (roughly the national average), as a nation we would:

• save over 450 million barrels of oil (57% of Gulf oil imports) valued at over $19 billion (based on $42/barrel)
• save consumers $31 billion at the pumps (based on $3.50/gallon)
• reduce greenhouse gases by 84 million tons—the equivalent of taking 15 million cars off the road for a year or roughly the fossil fuel burn for transportation in New York State.
• reduce wear and tear on our highways by 180 billion miles a year saving communities over $3 billion in highway maintenance.
• save over 150,000 people from traffic-related injury or death. Accident-related costs would be reduced by almost $18 billion a year.
• increase national productivity by 6.2 million man-years or $200 billion worth of work.
• save businesses $194 billion in real estate, electricity, absenteeism, and turnover—together with the value of the increased productivity, that’s roughly $7,900 per employee and more than double the average first-year cost per teleworker. Additional savings would result from reductions in other utilities, janitorial service, security, maintenance, paper goods, coffee and water service, leased parking spaces, ADA compliance, equipment, furniture, and office supplies.
• save enough in office electricity to power 1.5 million homes for a year.
• enable employees to gain back the equivalent of  2.5 weeks worth of vacation time per year—time they’d have otherwise spent commuting.
• save employees between $2,500 and $11,000 in transportation and work-related costs. In addition, many would also be able to cut daycare and eldercare costs.

Where did these figures come from? In addition to synthesizing over 250 studies on telecommuting and related topics, we’ve interviewed dozens of  enthusiasts and challengers including the top telework researchers, venture capitalists who support the remote work model, Fortune 500 executives, virtual employers, freelance job boards execs and users (such as Guru and Elance) and those from traditional job boards (such as Career Builder and Monster), and dozens of home-based workers in wide variety of professions.

Telecommuting offers a new way to work—a new model for employers and new opportunities for freelancers and entrepreneurs. But the impact of e-work goes well beyond individual or corporate benefits; it will impact our nation and the world.

A strong national e-work program can dramatically reduce our fossil fuel dependence and slow global warming. It can increase productivity. It can provide new employment opportunities for at-home caregivers, the disabled, and the un- and underemployed. It can offer rural and economically disadvantaged populations access to better jobs. It can improve family life and emancipate latchkey kids. It can bolster pandemic and disaster preparedness. It can reduce traffic jams and the carnage on our highways. It can alleviate the strain on our crumbling transportation infrastructure. It can help reclaim many of the jobs that have been lost to offshoring. And the billions of dollars saved by companies and individuals could fuel economic growth and bolster retirement savings.

– from Undress For Success—The Naked Truth About Making Money at Home (Wiley 2009)

More details about the pros and cons of telecommuting, with data to back them up are available on our Telework Pros and Cons page.

Telecommuting Workforce Assumptions / Data Sources

• Size of workforce and existing work at home workforce numbers comes from the U.S. Census Bureau – Means of Transportation To Work 2007 American Community Survey.

• Percent Who Could Work At Home = 40%

Matthews and Williams (2005) estimate that information workers that could have the potential to telecommute represent 40% of the U.S. workforce. Our calculator excludes those who already do, regardless of how often the work from home.

• Roundtrip Minutes to Work = 52

Bureau of Transportation Statistics (BTS) Omnibus Household Survey – Average commute is 15 miles each way (26 minutes)

• Number of days/week each worker telecommutes = 2.5 (roughly the national average)

Bureau of Labor Statistics – Work at Home in 2004: “On average those with a formal arrangement to be paid for their work at home logged 19 hours per week at home. (19/40 = 2.4 days a week)

• Number of workweeks/yr = 48

Telecommuting Fuel Savings Assumptions

• Barrels Saved:

42 gallons (1 barrel) of crude equals 19.6 gallons of gas. Energy Information Administration, Petroleum Supply Annual 2005, June 2006.

• U.S. Gulf Oil Imports = 791,928,000 barrels

Energy Information Administration 2007

Telecommuting Greenhouse Gas Savings Assumptions

• Greenhouse gas savings in pounds (CO2, carbon monoxide, hydrocarbon, and nitrogen)

EPA Emission Facts: Average Annual Emissions and Fuel Consumption (data for passenger cars). For an explanation of how gas can produce more than three times its weight in greenhouse gases, visit Energy Information Administration – How Gas Is Formed.

Telecommuting Company Savings Assumptions

• Productivity Increase = 25%

Studies show 20-45% improvement in productivity. Sun Microsystems, Ann Bamesberger testimony to Congress – teleworkers work 65% of the time they used to commute.

• Value of Productivity

12/2008 Bureau of Labor Statistics – average Earnings for service industries

• Reduction in Real Estate = 25%

U.S. General Services Administration: total rentable office space per person.

Cushman & Wakefield MarketBeat 4Q08 – (Class A, Central Business District)

U.S. GSA telework program suggests half of offices can be eliminated with full time telework.

• Reduction in Office Building Electricity = 25%

Percentage reduction follows real estate reduction.

Joseph Romm, “The Internet and the New Energy Economy,” Center for Energy and Climate Solutions, Global Environment and Technology Foundation, 2002.

Energy Information Administration – 10/2008 Commercial Sector per kWh

• Reduction in unscheduled absences = 63%

17th Annual Unschedule Absence Survey CCH shows unscheduled absences at 2.4% or 5.8 days per year. Telecommuting is shown to be the second most effective method of reducing absences (flexible scheduling is first)

Hewitt LCG, Nucleus Absence Overview and 2005 CCH Unscheduled Absence Survey shows cost per employee per year of $1,800

Our assumption for the percentage reduction is conservatively based on AMA Study (as quoted in AVAYA Unleashing the Hidden Productivity of Your Small Business) which shows a 63% reduction in unscheduled absences, GSA assumption of 3 day reduction.

• Reduction in attrition = 25%

TalentKeepers, Employee Turnover Trends: Survey Report, April 2004 – average between high of $30,000 and low of $10,000 is used in savings calculation

Average Quits rate (Jan 2007 to Jan 2008 per Bureau of Labor Statistics in Professional and Business Services categories)

Two-thirds of employees would take another job to ease the commute (BusinessWeek Research and TransitCenter, 2/08, The Impact of Commuting on Employees.

Telecommuting Individual Savings Assumptions

• Commuting miles saved / per person = 30

Bureau of Transportation Statistics (BTS) Omnibus Household Survey.

• Percent of reduced travel from telecommuting = 100%

2005 Reason Foundation — The Quiet Success: Telecommuting’s Impact on Transportation and Beyond. Telecommuters reduce their daily trips by 53 to 77% on telecommuting days. We use 65% in our calculation when we assume full time telecommuting, though many telework researchers argue the number is closer to 90% because the side stops they would have made on the way to or from work are eliminated or are handled together in a more efficient fashion. When assuming part-time telecommuting we use 100% offset because evidence suggests that errands are held for their non-telework days.

• MPG = 20.3

EPA MOBILE6.2 2003 (EPA’ computer model) weighted average of 23.9 mpg for cars and 17.4 mpg for light trucks.

• $ Saved per person in gas / yr assumes $3.50/gallon

• IRS Mileage reimbursement $.55/mile (included in total personal savings)

• Non-Auto Savings are net of costs that would be incurred at home for food and home office electricity (Joseph Romm, “The Internet and the New Energy Economy,” Center for Energy and Climate Solutions, Global Environment and Technology Foundation)

- Parking  (Colliers Intl. 2008 Non-reserved parking survey)

- Lunch (BLS Monthly Labor Review May 2000)

- Clothes/drycleaning (U.S. Bureau of Labor Statistics 2005 Consumer Spending Report)

- Other (coffee, snacks, soda, tolls, gifts, football pools, etc) – Estimate

Telecommuting Community Savings Assumptions

• Injury and Fatality per 100,000 Vehicle Miles

Traffic Saftey Facts NHSTA.gov 2007, August 2008 DOT HS 811 017

• Cost per injury / fatality

Federal Highway Administration 2005

• Cost Per Mile for Highway Maintenance

CommuteSolutions.org  — using just the improvement, repair, maintenance, and operations numbers

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If you’re a reporter and need additional details regarding our assumptions, email info-at-undress4success-dot-com. When you write, please let us know what organization you represent, the reason for your interest, and how you intend to use the data and we’ll help if we can.

If you’re on a deadline, please call 760-703-0377 or 760-473-2574.

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To read more about how to go carbon neutral visit TreeHugger.com.

To purchase Carbon Offset Credits visit CarbonFund.org or TerraPass.com.