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By Robert Moskowitz
Telecommuting is extremely cost-effective. According to Noel Hodson, a British based telecommuting consultant who travels the world demonstrating its benefits to employers and employees alike, "Organizations may benefit, in ideal circumstances, by the equivalent of the gross salary of each home-based teleworker they employ, when the teleworker's extra output is taken into account. Individuals may benefit, in ideal circumstances, by the equivalent of a sixth or a fifth of their salary."
The self-employed, Hodson notes, collect both the employer's and the employee's side of the benefits from telecommuting.
Hodson's unique analysis of telecommuting from a cost/benefit perspective involves looking at certain specific cost centers:
Just about every study of telecommuting cites significant productivity increases for those who work away from the office. Hodson's are no different. In fact, I can't think of a single instance where productivity was found to be reduced by telecommuting, although there are cases where observers do not notice an increase.
Productivity increases related to telecommuting come from a variety of sources:
In one of Hodson's recent workshops, participants calculated that switching to telecommuting five days a week (not always desirable or recommended, but an easier basis on which to calculate costs and savings) would "create" an additional 100 workdays per year.
If you consider that dressing and going to the office each day takes 90 minutes, and returning home and relaxing requires another 90 minutes, the computations (5 days x 180 minutes per day) show that 15 hours or two work days per week are saved by the switch to fulltime telecommuting. Your mileage may vary, of course, but the concept is generally the same, and very positive for everyone.
With extra hours in every day, and extra days during the year, it's only natural for telecommuters to accomplish more than their office-bound counterparts.
It doesn't take rocket scientists to see how this productivity converts into extra profits for the employer.
At American Express Travel Services in Houston, Texas, for example, Hodson says that travel agents who work via telecommuting handle about 26% more calls per day and produce about 46% more business than comparably experienced travel agents working in conventional offices. The costs for all this extra income? As you'll see in a few minutes, they're almost negligible.
Productivity increases even more if you consider the ratio of work to employer expenses. Since teleworkers are not only less expensive and more productive per hour of work, but have more hours per week in which to work, according to Hodson the employer's cost per unit of work delivered literally plummets as much as 20% or more.
Hodson suggests that current pay rates are enough not only to maintain an employee's standard of living, but to cover the costs of commuting to and from work. That's why telecommuters often feel their new working arrangement is a kind of fringe benefit, and will often forego raises in return for the right to telecommute.
If you calculate the value of your time at only $5 per hour, eliminating a 30-minute (each way) commute through 5-day-a-week telecommuting brings you a clear benefit worth $1,150 over the year (that's $5 x 230 workdays). Value your time higher, or eliminate a longer commute, and the benefit climbs even higher!
Telecommuting can eliminate not only the travel people do to work, but the travel people do from work, once they arrive. This includes fairly local travel during the day to meetings at other locations, and travel done to more distant locations for a day or more at a time.
Substituting various forms of telecommuting for conventional business travel offers great cost-savings opportunities for both the organization (which would otherwise pay hundreds or thousands of dollars per day in salaried time that produces very little, plus mileage costs, airfare, hotel, taxi, and meal expenses), and for the individual (who would otherwise lose time away from the family and away from other opportunities to do productive work).
A great deal of business travel is unpaid (including nights spent away from home and weekend days spent traveling to and from weekday meetings).
Hodson recounts the example of a firm which recovered its entire $160,000 investment in video conferencing equipment just in the first few months of using it.
One of the big objections to telecommuting is the expense of setting up workstations away from the office. But studies show this expense to be very small in relation to the savings and other benefits of telecommuting.
In American Express Travel Services, for example, each telecommuting travel sales agent costs the company about $1,300 over three years. This includes the one time relocation and installation costs for computer and telephone equipment, plus the ongoing telephone line and usage charges. Against this expense, the company saves about $4,400 per year in office space rental. At the end of three years, the company has saved $11,900.
Equipment and workstation costs tend to be low in the U.S., Hodson reports, because as many as 75% of U.S. telecommuters already had access to a suitable computer when they first began telecommuting. Even when equipment must be purchased and installed, the cost of telecommuting never even come close to wiping out the benefits.
Equipment costs can rise, however, in some cases as high as $8,000 or more. One reason for higher equipment costs is when the teleworker uses a computer both in the office and at the telecommuting work site. That's why Hodson recommends that part-time telecommuters who depend on computer capabilities should receive portable computers they can transport with them from one site to another, as necessary.
The conventional wisdom is that telecommuters are more difficult to reach than people who work in a centralized office setting. But Hodson's research points to a different conclusion.
People tend to be about 15% more available to their supervisors and their co-workers when they are telecommuting than when they are working in a traditional office.
One reason is that teleworkers tend to view their work style as a privilege to be protected. So they are highly motivated to be seen as hard-working, readily-available members of the team. Another reason is undoubtedly the fear of teleworkers falling out of touch, although this is nothing but an unsubstantiated myth left over from an earlier, but rapidly fading, era.
It's well-documented that telecommuting makes it easier to recruit employees from a wider geographical area. Because it's generally viewed as a benefit, it enhances an employer's recruiting package and also motivates employees to stay once they are hired. Few people who begin telecommuting are later willing to give it up. When other opportunities arise, telecommuters often feel that their flexible working style is more reason to stay with their present employer.
Hodson points out that replacing and training a high level professional or executive can cost a company as much as $100,000. To the extent key employees stay because they have the chance to telecommute, some of that potential expense should be considered a savings attributable to telecommuting.
Even more to the point, losing such an employee to another can mean one firm is underwriting the training costs of a competitor.
Telephones keep getting smarter and smarter. Already, there's "follow me" service in some parts of the country that allows you to quickly and easily - and instantly - switch your phone calls from one location to another. With this technology, you can give people a single telephone number and take all your calls in your office, on your boat, or anywhere in between.
Now a new "MultiMux" modem from MultiTech Systems, Mounds View, MN provides a virtually invisible telecommunications connection between a telecommuter and his or her headquarters office.
According to Paul Kraska, product marketing manager, the new device is an intelligent multiplexer that can combine voice, data, and fax lines and send the information through a 28,800 bps modem over a standard "twisted pair" telephone line. What's more, the devices (you need one at each end of the telephone line) makes the telecommuter's phone a practical extension of the office PBX and local area network.
Once it's connected, whenever someone calls your office extension, the phone call is automatically transferred to your telecommuting workstation - whether at home or on the road.
It will also use the PBX's capabilities, so if you get a second call on your office line, you'll hear a beep in your handset at home, and you can switch back and forth between the calls, just as you can at the office.
When you call in, the unit will automatically call you back to put toll charges on the office PBX instead of your home telephone bill. Dial 9 at home, and the MultiMux gives you an outside line through your office PBX.
Here's another advance in telephone technology: the Northern Telecom (now known as NorTel) Caller ID Integrated Digital Answering Machine. Designated the M9516, this answering machine with built in telephone does the work of some switchboard operators all by itself.
For example, the M9516 logs the originating numbers of the last 75 calls you have received (either all your calls, or just the calls you haven't answered—it's your choice). It also allows you to create a directory of up to 75 names and numbers that you can speed dial via scroll keys or the alpha-numeric keypad.
The integrated Caller ID feature allows for an interesting "Preferred Match" capability. With this, you can program the answering machine to respond differently when you get calls from particular people listed in your dialing directory.
Inside the answering machine, you can create as many as nine separate voice mailboxes. Calls from individuals or groups of people in your dialing directory can be shunted to any one of these nine mailboxes, where they can receive a customized greeting and leave a message, too. These messages are all recorded on computer chips, rather than on tape, so you can scan through them for review or deletion selectively rather than sequentially.
You can even create project-by-project greetings to deal with individual colleagues. So when Sally calls to see how you're coming with the mail merge you promised her, she can hear your voice saying: "Hi, Sally. I've finished the mail merge and sent the file to your email account. I'm on the other line with Joe right now, so I'll call you back around 4 PM."
Because the M9516 can also speak, it can announce the names of each person who calls—before you pick up the telephone. You can also program it to direct calls whose return phone numbers have been electronically blocked—such calls are frequently from sales people—to a special mailbox so you never have to answer them again.
Another programming option lets the machine answer calls and give an opening announcement, then lets the caller select whether to leave a message or ring through so you can answer.
These shunting and announcing capabilities can be valuable to telecommuters who want to prevent interruptions when they're concentrating on something important. For example, use the machine to screen your calls and answer only those you want, or let it give out customized messages to people while you focus on meeting your deadline.
If you can obtain the Distinctive Ringing service from your telephone company (which puts more than one incoming number on a single telephone line), the M9516 can give different answers to each of the different numbers. In addition, it can automatically route calls to one of the numbers to your fax machine—saving the cost of a special switch to do just this small task.
Naturally, the M9516 works with a headset, offers all its features via remote access, and even provides a call timer to help keep busy telecommuters on schedule. For more details about the M9516, contact NorTel locally, or phone the company at 800-4-NORTEL for product information and a local referral.
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