Telework Savings Potential

Telecommuting Could Save Over $650 Billion a Year and Much More

Our Telecommuting Savings 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 (February 2010) allows companies to customize the model and calculate their own telework savings potential. Less than 2% of U.S. employees work from home the majority of the time (not including the self-employed), but 40% hold jobs that are compatible with telecommuting. If those employees worked at home just half of the time (roughly the national average for those who do), as a nation we would:

• save over 280 million barrels of oil (37% of Persian Gulf oil imports) valued at over $23 billion (based on $80/barrel)
• save consumers $15 billion at the pumps (based on $2.60/gallon)
• reduce greenhouse gases by 53 million tons—the equivalent of taking almost 10 million cars off the road for a year—that’s over 21% of the nation’s goal for GHG reduction by 2020.
• reduce wear and tear on our highways by over 115 billion miles a year saving communities over a billion in highway maintenance.
• save almost 100,000 people from traffic-related injury or death. Accident-related costs would be reduced by almost $12 billion a year.
• increase national productivity by 5.5 million man-years or $235 billion worth of work.
• save businesses over a $200 billion in real estate, electricity, absenteeism, and turnover—together with the value of the increased productivity, that’s more than $10,000 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 more than 900,000 homes for a year.
• enable employees to gain back the equivalent of  2-3 weeks worth of vacation time per year—time they’d have otherwise spent commuting.
• save employees between $1,800 and $6,800 in transportation and work-related costs. In addition, some would also be able to cut daycare and eldercare costs. Many would also qualify for home office tax breaks.

In total, that’s an economic impact of over $650 billion a year! Where did these figures come from? In addition to synthesizing over 250 case studies, scholarly reviews, research papers, books, and other documents on telecommuting and related topics, we have interviewed the nation’s largest and smallest virtual employers and their employees, corporate executives (including CEOs, HR representatives, IT professionals, Operations managers, and others), telework advocates and naysayers, top researchers, legislators, legal representatives, leaders of successful telework advocacy programs in both the public and private sector, and venture capitalists who have invested in the remote work model.

Based on all of that we developed the Telecommuting Savings Model to quantify the economic, environmental, and societal potential that telecommuting offers for every, city, county, Congressional District, and state in the nation. It’s been used by company and community leaders throughout the U.S. and Canada to quantify the extent to which telecommuting can reduce greenhouse gases and petroleum usage, save money, improve work-life balance, increase employee loyalty and turnover, reduce absenteeism, increase productivity, and reduce highway congestion and traffic accidents. It’s available free along with a customizable telework savings model that allows companies and communities to quantify their own potential telework savings based on dozens parameters such as real estate costs, turnover, absenteeism, participation rate, frequency, labor costs, etc. Our telework research has been quoted in the Wall Street Journal, Harvard Business Review, Washington Post, and dozens of other publications.

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)

Telecommuting—specifically, home based work, offers a relatively simple, inexpensive solution to some of the world’s most vexing problems:

- Environmentalists applaud telecommuting because it significantly reduces greenhouse gases and energy usage.

- Astute company owners support telecommuting because of the cost savings and increased productivity.

- Work-life experts endorse telecommuting because it addresses the needs of families, parents, and senior caregivers.

- Workforce planners see telecommuting as away to avoid the ‘brain drain’ effect of retiring boomers.

- Human resource professionals see telecommuting as a way to recruit and retain the best people.

- Employees see telecommuting as a way to save time and money, and improve the quality of their lives.

- Baby Boomers find telecommuting offers a flexible alternative to full retirement.

- Gen Y’ers see telecommuting as a way to work on their own terms.

- Disabled workers, rural residents, and military families find home-based work an answer to their special needs.

- Urban planners realize telecommuting can reduce traffic and revitalize cities.

- Governments see telecommuting as a way to reduce highway wear and tear and alleviate the strain on our crumbling transportation infrastructure.

- Organizations rely on telecommuting to ensure continuity of operations in the event of a disaster or pandemic-all federal workers are required to telecommute to the maximum extent possible for just this reason.

More details about the telecommuting workforce are available at Telecommuting Pros and Cons, How Many People Telecommute, and other Telecommuting Statistics.

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 2008 American Community Survey.

• Percent Who Could Work At Home = 40% (excludes those who do) • Percent who want to telecommute = 79% • Roundtrip Minutes to Work = 52 • Number of days/week each worker telecommutes = 2.5 (roughly the national average for those who do) • Number of workweeks/yr = 50

Telecommuting Fuel and Greenhouse Gas Savings Assumptions

• Reduced Driving on Telecommuting Days = 75% 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

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Telecommuting Savings Assumptions

• Productivity Increase = 27% • Reduction in Real Estate = 18% • Reduction in Office Building Electricity = 18% (calculations are net of extra home office electricity) • Reduction in unscheduled absences = 63% • Reduction in attrition = 25%

Telecommuting Individual Savings Assumptions

• Commuting miles saved / per person = 30 • MPG = 20.3 • $ Saved per person in gas / yr assumes ($/gallon varies with the market) • IRS Mileage reimbursement $.55/mile plus a premium/discount for current gas prices (included in total personal savings) • Non-Auto Savings are net of costs that would be incurred at home for food and home office electricity

Telecommuting Community Savings Assumptions

• Injury and Fatality per 100,000 Vehicle Miles • Cost Per Mile for Highway Maintenance per 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.