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Telecommuting Pros and Cons

We’ve spent years researching the advantages and disadvantages of work-at-home programs for Undress For Success—The Naked Truth About Making Money At Home (John Wiley & Sons, April 2009), and here’s what we found. Telecommuting—particularly work-from-home programs—offers a pull, rather than a push solution to a wide range of problems. It benefits employers, employees, and the community. Strong national telecommuting program would increase GNP, reduce the national debt, and bring the balance of trade back in our favor. It would substantially reduce our Gulf Oil dependence. It would reduce traffic jams and the carnage on our highways. It would alleviate the strain on our crumbling transportation infrastructure. It would help reclaim many of the jobs that have been lost to offshoring, and provide new employment opportunities for at-home caregivers, the disabled, and the un- and under-employed. It would improve family life, and emancipate latchkey kids. It would substantially bolster pandemic and disaster preparedness. It would reduce global warming. And it would save companies and individuals billions of dollars.

Half time telecommuting saves companies over $10,000 per telecommuter per year!

For details on the employee, employer, and community visit

our Telecommuting Savings Potential page

While we recognize that there are some very real inhibitors that need to be overcome—such as management mistrust, worker isolation, data security, and concerns about career impact—the advantages far outweigh the disadvantages. Based on our synthesis of over 250 studies, interviews with dozens of telework enthusiasts and challengers, researchers, venture capitalists who invest in the remote work model, Fortune 500 executives, virtual employers, and dozens of home-based workers in wide variety of professions, here’s why we need to make the road less traveled the way to work.

Advantages of Half Time Telecommuting For the Community *

Telecommuting reduces our foreign oil dependence

  • Half time telework (roughly the national average) by information workers could reduce Gulf Oil imports by 37%.
  • And it could reduce office building energy usage by enough to power almost a million homes for a year.

Telecommuting slows global warming

  • Half-time telecommuting could reduce carbon emissions by over 53 million metric tons a year—the equivalent of taking 10 million cars off the road.
  • Additional carbon footprint savings will come from reduced: office energy, roadway repairs, urban heating, office construction, business travel, paper usage (as electronic documents replace paper).

Telecommuting bolsters pandemic and disaster preparedness

  • Three quarters of teleworkers say they could continue to work in the event of a disaster compared with just 28% on non-teleworkers.
  • A decentralized workforce means there is no World Trade Center or Pentagon-like target to attack. If an attack does occur, fewer people will be effected, economic stability will be maintained, and continuity of operations is assured.

Telecommuting redistributes wealth

  • Location-independent job opportunities offer better employment options to rural workers

National productivity would increase by over $200 billion through telecommuting

  • Studies and empirical evidence shows productivity increases of between 25% and 40%. The increase in productivity for half-time teleworkers would equate to over 5.5 million man years of work.

Cost savings from telecommuting will encourage home-shoring and bring back many of the jobs that have been lost to foreign labor

Telecommuting reduces traffic jams

  • If traffic continues to grow at the current pace, over the next couple of decades, drivers in Atlanta, Baltimore, Chicago, Denver, Las Vegas, Miami, Minneapolis/St. Paul, Portland, San Francisco-Oakland, Seattle-Tacoma, and Washington, D.C. will be sitting in daily traffic jams worse than the infamous traffic jams that plague Los Angeles eight hours a day.
  • As a result, commutes will take almost twice as long, and you’ll have to leave even earlier to allow for traffic jams if you have to arrive someplace at a specific time, producing a further reduction to our national productivity.
  • Traffic jams rob the U.S. economy of $78 billion/year in productivity
  • Traffic jams idle away almost 3 billion gallons of gas and accounts for 26 million extra tons of greenhouse gases
  • Every 1% reduction in vehicles yields a three fold decrease in congestion.

Telecommuting prevents traffic accidents

  • Half time telework for 40% of the working population would save 1,500 lives, prevent over 95,000 injuries, and save over $11 billion a year in direct and indirect costs associated with traffic accidents.

Telecommuting takes the pressure off our crumbling transportation infrastructure

  • Crumbling transportation infrastructure - new roads are being built to meet needs of 10-20 years ago. Less than 6% of our cites roads have kept pace with demand over the past decade.
  • By 2025 we’ll need another 104 thousand additional lane miles - that will cost $530 billion—money the cities just don’t have.

Advantages of  Half Time Telecommuting For Companies *

Telecommuting improves employee satisfaction

  • People are sick of the rat race, eager to take control of their lives, and desperate to find a balance between work and life.
  • 79% of people want to work from home.
  • 36% would choose it over a pay raise.
  • A poll of 1,500 technology professionals revealed that thirty-seven percent would take a pay cut of 10% if they could work from home.
  • Gen Y’ers are more difficult to recruit (as reported by 56% of hiring managers) and to retain (as reported by 64% of hiring managers) but they are particularly attracted flexible work arrangements (ranked as 8 on a 10 scale for impact on overall job satisfaction).
  • 80% of employees consider telework a job perk.

Telecommuting reduces attrition

  • The cost of replacing an employee extends far beyond the recruiting process. It includes separation costs, temporary replacement costs, and lost productivity training costs and frequently lost customers, co-workers, and corporate intelligence. Studies put the cost as high as 75% of non-exempt person’s earnings, and 150-200% of an exempt person’s salary.
  • 61% of employees who do not currently work from home say they are willing to give up some pay in exchange for being allowed to do so.
  • 68% of Shering-Plough Corporation’s telework program (which dates back to 1999), say that being able to telework is a factor in their decision to stay with the company
  • 14% of Americans have changed jobs to shorten the commute.
  • 46% of companies that allow telecommuting say it has reduced attrition.
  • 72% of employers say telework has a high impact on employee retention.
  • Almost half of employees feel their commute is getting worse; 70% of them feel their employers should take the lead in helping them solve the problem.
  • 92% of employees are concerned with the high cost of fuel and 80% of them specifically cite the cost of commuting to work. 73% feel their employers should take the lead in helping them reduce their commuting costs.
  • Two-thirds of employees would take another job to ease the commute.

Telecommuting reduces unscheduled absences

  • 78% of employees who call in sick, really aren’t. They do so because of family issues, personal needs, and stress.
  • Unscheduled absences cost employers $1,800/employee per year; that adds up to $300 billion/yr for U.S. companies.
  • Telecommuting programs reduce unscheduled absences by 63%.
  • Telecommuters typically continue to work when they’re sick (without infecting others).
  • The cost of replacing an employee extends far beyond the recruiting process. It includes separation costs, temporary replacement costs, and lost productivity training costs and frequently lost customers, co-workers, and corporate intelligence.return to work more quickly following surgery or medical issues.
  • Flexible hours allow telecommuters to run errands or schedule appointments without losing a full day.

Telecommuting increases productivity

  • Best Buy, British Telecom, Dow Chemical and many others show that teleworkers are 35-40% more productive.
  • Businesses lose $600 billion a year in workplace distractions.
  • Over two-thirds of employers report increased productivity among their telecommuters.
  • Sun Microsystems’ experience suggests that employees spend 60% of the commuting time they save performing work for the company.
  • AT&T workers work 5 more hours at home than their office workers
  • JDEdwards teleworkers are 20-25% more productive than their office counterpoints
  • American Express workers produced 43% more than their office based counterpoints
  • Compaq increased productivity 15% - 45%

Telecommuting saves employers money

  • Our own Telework Savings Calculator show that if the Americans who hold work-at-home compatible jobs did so just half of the time, U.S. companies could collectively increase their bottom lines by $400 billion as a result of savings in real estate (assuming 18% of offices could be eliminated or shared), electricity, absenteeism, turnover, and increase productivity. That’s over $10,000 per employee, per year. Full time telecommuting can save companies over $20,000 per employee per year.
  • Nearly six out of ten employers identify cost savings as a significant benefit to telecommuting.
  • Alpine Access Remote Agents close 30% more sales than traditional agents the year before.  Customer complaints decreased by 90%. And turnover decreased by 88%.
  • IBM slashed real estate costs by $50 million through telework.
  • McKesson’s telecommuting program saves $2 million a year.
  • Mindwave Research, a 21-person marketing research company saves over $11,000 by allowing half of it’s staff to work from home full time.
  • Nortel estimates that they save $100,000 per employee they don’t have to relocate.
  • Partial telework can offer real estate savings by instituting an office hoteling program.
  • Dow Chemical and Nortel save over 30% on non-real estate costs.
  • Sun Microsystems saves $68 million a year in real estate costs.
  • Offers inexpensive compliance with ADA for disabled workers.
  • Saves brick and mortar costs in industries where regulations or needs require local workers (e.g. healthcare, e-tail).

Telecommuting Equalizes personalities and reduces potential for discrimination

  • Hiring sight unseen, as some all-virtual employers do, greatly reduces the potential for discrimination.
  • It ensures that people are judged by what they do versus what the look like.
  • Communications via focus groups, instant messaging, and the like equalizes personalities. No longer is the loudest voice the one that’s heard.

Telecommuting cuts down on wasted meetings

  • Asynchronous communications allow people to communicate more efficiently.
  • Web-based meetings are better planned and more apt to stay on message.

Telecommuting increases employee empowerment

  • Remote work forces people to be more independent and self-directed.

Telecommuting increases collaboration

  • Once telework technologies are in place, employees and contractors can work together without regard to logistics. This substantially increases collaboration options.

Telecommuting provides new employment opportunities for the un- and under-employed

  • 18 million Americans with some college education aren’t working.
  • More than twelve percent of the working age population that’s disabled (16 million). A full three quarters of unemployed workers with disabilities cite discrimination in the workplace and lack of transportation as major factors that prevent them from working.
  • 24 million Americans work part time.
  • Only seventy-five percent of women, still the traditional primary caregivers, age twenty-five to fifty-four participate in the labor force (compared to ninety percent of men). Almost a quarter of women work part-time (16.5 million), compared to ten percent of men.

Telecommuting expands the talent pool

  • Over 40% of employers are feeling the labor pinch; that will worsen as Boomers retire.
  • Reduces geographic boundaries.
  • Provides access to disabled workers.
  • Offers alternative that would have otherwise kept parents and senior caregivers out of the workforce.
  • Offers geographic, socioeconomic, and cultural diversity that would not otherwise be possible.
  • Over 70% employees report says the ability telecommute will be somewhat to extremely important in choosing their next job.

Telecommuting slows the brain drain due to retiring Boomers

  • 75% of retirees want to continue to work—but they want the flexibility to enjoy their retirement.
  • 36% of retirees say the ability to work part rather than full time, or to work from home would have encouraged them to keep working—even if it didn’t provide health benefits or meant a temporarily reduced pension.
  • 38% of surveyed retirees indicated that being able to work seasonally or on a independent contractor basis would have encouraged them to delay retirement.
  • 71% of retired workers who later decided to go back to work, originally retired because of a desire for more flexibility than their job offered.

Telecommuting reduces staffing redundancies and offers quick scale-up and scale-down options

  • Having access to a flexible at-home workforce allows call centers, airlines, and other to add and reduce staff quickly as needed.
  • The need to overstaff, just in case, is greatly reduced.
  • 24/7 worldwide coverage is easier to staff with home-based help.

Environmental Friendly Policies are Good For Companies

  • Tougher environmental laws are coming. Several cities are considering access taxes similar to those imposed in London. Many states are implementing programs that require businesses to reduce their carbon footprint. In 2008, Wal-Mart, together with Cadbury Schweppes (CSG), Imperial Tobacco (ITY), Nestlé, Procter & Gamble (PG, Fortune 500), Tesco, and Unilever (UN) formed the Supply Chain Leadership Coalition and began asking their vendors to provide emissions data. When its pilot ends later this year, Wal-Mart will begin comparing suppliers’ emissions records and favoring those with better scores.
  • Businesses that want to stay competitive will need to pay attention to their carbon footprint.
  • Telework offers an easy, effective way for companies to reduce their carbon footprint.
  • Telework offers perhaps the easiest, cheapest way to address Clean Air Act requirements.
  • Sun Microsystems reported that its 24,000 U.S. employees participating in the Open Work Program avoided producing 32,000 metric tons of CO2 last year by driving less often to and from work.
  • Office equipment energy consumption rate is twice that of home office equipment energy consumption.
  • 70% of employees report they would see their companies in a more favorable light if they helped them reduce their carbon emissions.
  • 24% of employees say they’d take a pay cut of up to 10% to help the environment.

Telecommuting insures continuity of operations in the event of a disaster

  • Federal workers are required to telework to the maximum extent possible for this reason.
  • Bird flu, terrorism, roadway problems, and weather-related disasters are all drivers.
  • Three quarters of teleworkers say they could continue to work in the event of a disaster compared with just 28% on non-teleworkers.

Telecommuting improves performance measurement systems

  • Drucker, Six Sigma, and management experts agree that goal setting and performance measurement is key to successful management.
  • For telework to work, employees must be measured by what they do, not where or how they do it.

Telecommuting offers access to grants and financial incentives

  • A number of states, including Virginia, Georgia, and Oregon offer financial incentives for businesses to adopt telework. Other states including Arizona, Vermont, Washington, and Connecticut offer free training to encourage companies to give it a try.

Advantages of  Half Time Telecommuting For Employees *

Telecommuting saves employees money

  • Employees save on gas, clothes, food, parking, and in some cases, daycare (provided they can flex their hours to eliminate the need).
  • Average savings is $1,600 to $6,800/year per person for half-time telework
  • Allows them to live in places where the cost of living is lower. Employees can save over $7,000/year for every $100,000 reduction in home value.

Telecommuting increases leisure time

  • Full time telework results in an extra 2-3 workweeks of free time a year—time that would have been spent commuting.
  • The majority of teleworkers report they have more time with family, friends, and leisure.

Telecommuting reduces stress, illness, and injury

  • 80% of diseases show that stress is a trigger. Because telework reduces stressful commutes and alleviates caregiver separation issues, teleworkers are likely to suffer fewer stress-related illnesses.
  • A quarter of telework employers report improvements in employee health.
  • Teleworkers are exposed to fewer occupational and environmental hazards at home.
  • Teleworkers suffer fewer airborne illnesses because of lack of contact with sick co-workers.
  • Teleworkers report being able to make more time for exercise.
  • Anyone who has ever dieted knows it’s harder to stay the course when you dine out. Teleworkers often eat healthier meals and are less inclined to consume fast food lunches.
  • Those who choose to move to more rural areas can reduce the stress of the hustle and bustle cities and suburbs.

The Holdbacks To Telework / Telecommuting *

Management mistrust

  • 75% of managers say they trust their employee, but a third say they’d like to be able to see them, just to be sure.
  • Company culture must embrace the concept at all levels, sweatshop and typing pool mentality has to be abandoned.
  • From Peter Drucker’s introduction of Management-By-Objectives in the mid-1950’s, to Six Sigma which was popularized by General Electric’s Jack Welch in the 1990’s, setting and measuring goals has long been held as the key to good management.

It’s not for everyone

  • For some, social needs must be addressed. Telephone, email, instant messaging are a solution for some. Innovative solutions such as virtual outings, online games, and even Second Life have proven successful as well. Occasional telework is also a solution.
  • Telecommuters must be self-directed.
  • They should be comfortable with technology or arrangements should be made for remote tech support.
  • They should have an defined home office space
  • Home-based employees need to understand that telecommuting is not a suitable replacement for daycare unless they can schedule work hours around their children’s needs.

Career fears from ‘out of sight out of mind’ mentality

  • Some employees cite career fears as a reason not to telecommute. Successful teleworking programs overcome the ‘out of sight, out of mind’ issue with performance-based measurement systems, productivity versus presenteeism attitudes. Teleworkers who maintain regular communications (telephone, email, instant chat, even the occasional face-to-face meeting) with traditional co-workers and managers find career impact is not an issue.

Co-worker jealousy

  • Employees need to understand why they were or were not chosen for telework.
  • Employees should see telework as a benefit that is earned, not given.
  • Standards of selection should be uniform.

Costs

  • The average overall annual direct spend per virtual office employee was $2,710. Support costs average $1,231. Most organizations reported that virtual employees are provided with or reimbursed for: a laptop or desktop computer, software, cell phone, printer, voice/data communications, office supplies, and a fax machine. Most did not cover office setup, postage or courier services, scanners, PDAs or pagers, phone cards, or any sort of per diem.
  • The U.S. General Services Administration estimates that a cost of $16 million to provide a basic teleworker at-home solution for 50,000 telecommuters (at an agency with 100,000 staff) can, in appropriate circumstances, be offset with a realization of over $36 million in benefits of the same period.
  • NCR and Lucent found the savings from their telework programs were double the costs.
  • In 2006, the U.S. GSA reported that the average first year cost per teleworker was $1,000 and often as low as $300.
  • Only about a third of federal agencies pay for home office equipment, relying instead on the employees own equipment or providing equipment GSA already owns. Of those that do pay for equipment, most pay only a portion of the costs.

Security issues

  • Almost 93% of managers involved in IRS pilot telework program believe there is no problem with data security.
  • Security issues are easy to solve, but must be addressed.
  • 90% of those charged with security in large organizations feel that home-based workers are no a security concern. In fact, they are more concerned with the occasional work that is taken out of the office by traditional employees who lack the training, tools, and technologies that teleworkers receive.
  • Security training should be provided for all employees.

IT infrastructure changes may be necessary

  • Teleworkers need access to company systems, software, and data.
  • Infrastructure changes that support telework improve efficiency for office and traveling employees as well.
  • Companies need to address remote technical support issues. Off the shelf solutions exist.

Collaboration Concerns

  • Some managers feel that distance inhibits collaboration. The need the “energy in the room” when a crisis occurs.

Double-taxation

  • Some cities, notably New York, impose taxes on home-based workers whether they work in the city or not. A Connecticut resident, who works at home for a New York company, owes taxes to both states.

Employment Law and OSHA Concerns

  • A few recent accidents in the homes of teleworker has raised concerns about employer liability.
  • The inability to monitor employee overtime is also an issue.

Local Zoning Issues

  • Some communities and homeowner associations prohibit home offices.

For a roundup of the latest statistics on who’s telecommuting and how much, visit our Telecommuting Statistics Page. For a look at how we as a nation could benefit from regular telework, visit our Telework Savings Potential Page.

As a nation, it’s time to make the road less traveled our way to work.

* Statistical information contained herein comes from a wide range of studies. For additional information reporters on assignment can email info-at-undress4success-dot-com. Please let us know what publication you represent, the nature of the article, your timeframe, and the estimated date of publication and we’ll help if we can. If you’re under a tight deadline, please call 760-703-0377.