BENEFITS OF TELECOMMUTING

Matthew ParadiseApril 16, 2016

Overview

■ Introduction■ Trends in telecommuting■ Benefits for individuals■ Benefits for organizations■ Challenges■ Discussion■ Conclusion

INTRODUCTION

Introduction

■ Definition- Working from home through the use of technology

■ Not possible for all industries, companies, or individuals■ About 80% desire to telecommute■ Means to reach the most qualified individuals■ Business strategy, not a benefit or perk■ Over 400% increase since 1995

TRENDS IN TELECOMMUTING

Demographics and Stereotypes

■ In 1995, about 9% said they telecommute■ In 2015, 37% said they telecommute■ In 2014, 6.5% increase- largest since recession■ About 80% desire to telecommute■ About 50% of jobs are compatible ■ Young workers, baby boomers, disabled, etc., all desire to

telecommute for varying reasons■ Young, lazy, not motivated, possibly less educated

Cont’d

■ 49 years old■ College educated■ Salaried, non-union, management or professional■ Company of more than 100 employees■ Average $58,000 per year■ 75% make $65,000 or more■ More likely to love their job

Industries

■ Medical and Health■ Customer Service■ Sales■ Computer and IT■ Administrative■ Education■ Marketing

Cont’d

■ Almost 25% of job opening are medical and health related■ Information specialists, medical coding, pharmaceutical reps ■ Increase of about 80% in local government, 130% in state

government, and 425% in federal government in past 10 years– 5 year plan to implement: $30 million– Lost productivity in 1 day shutdown in Washington D.C:

$100 million

Companies

■ Top medical and health: United Health Group, Aetna, and Humana

■ Top customer service: Amazon, Teletech, Convergys■ Self-employed not included in statistics■ Self-employment declining■ Specific companies analyzed: Xerox and Aetna

Cont’d

■ Xerox: ranks 16th in top 100 offering telecommuting– Started in 1960’s– Employee’s must take self-assessment– About 11% telecommute 100% of the time (About

8,000)

■ Aetna: ranks 18th in top 100 offering telecommuting– 20 year history– 43% of 48,000 employees– Look at individual, job function, and home environment

BENEFITS FOR INDIVIDUALS

Increased Flexibility

■ Baby Boomers■ Generation X■ Millennial's■ Disabled■ Mothers

Cont’d

■ Birth of a child■ Serious injury■ Serious illness■ Caring for a loved one

Increased Time/ Decreased Costs

■ Gain back average of 2-3 weeks per year– 2-3 years over an entire career

■ Save $2,000-7,000 per year in travel costs■ Save after school and eldercare■ Could qualify for home office tax break■ Put $700 billion back into economy- 4% of current GDP

Cont’d

■ Work- Life balance– More time with family

■ Raise standard of living– More disposable income

■ Vacation more freely– Can get work done from anywhere

Increased Job Satisfaction

■ Love, Like, Neutral, Dislike, Hate■ Ambition■ Work ethic■ 87% more likely to love their jobs

Cont’d

■ Love 45% to 24%■ Dislike or Hate 2% to 7%■ Being average is terrible 71% to 65%■ Hits deadlines no matter what 87% to 76%

BENEFITS FOR ORGANIZATIONS

Increased Output/ Reduced Turnover■ Higher job satisfaction

– Higher output– Reduced turnover

■ More, less, or just as productive– 56%, 18%, 24%

■ Work longer hours

Cont’d

■ Nicholas Bloom- Stanford Professor■ Ctrip- China’s largest travel agency

– 9.5% more hours, 13% more production■ Hoteling- U.S Patent and Trademark Office

– Home 4 days, office 1 day– 66.3 more hours per year, 4% more applications

Cont’d

■ Mary Noonan- University of Iowa■ Jennifer Glass- University of Texas■ Worked more than 40 hours 78% to 27%

– 30% worked more than 50 hours per week■ Managerial or Sales- 82% to 33%

Increased Capacity/ Decreased Costs■ Several employees can share a single desk■ Typical business saves $11,000 per employee per year■ Over $500 billion in U.S alone■ Government 1 day shutdown costs $100 million■ Hoteling

– American Express, PriceWaterhouseCoopers, GlaxoSmithKline

– New York City, London, Singapore

Cont’d

■ U.S Patent and Trademark Office■ Saves $19.88 million from hoteling program annually■ $15.88 million in saved real estate costs■ Save $1,710 in costs first year, $3,380 in each subsequent

year■ Generates $13,373 in revenue over 14 years

Decreased Environmental Footprint■ Emissions■ Oil consumption■ Wear and tear on highways■ Crumbling infrastructure ■ Traffic related injuries

Cont’d

■ Save 37% of oil imports– 640 million barrels annually

■ Reduce emissions by 54 million tons per year– Take entire New York workforce off the road

■ 90,000 traffic related injuries and deaths– $10 billion in savings

Cont’d

■ Xerox– 92 million miles, 4.6 million gallons of gas– $10 million in savings by the company

■ Aetna– 127 million miles, 5.3 million gallons of gas, 46,700

tons of greenhouse gases– Reduced overall costs by 15-25%

■ Dell– $12 million in savings, 6,700 tons of greenhouse gases

CHALLENGES

Challenges for Individuals

■ Most desire to telecommute, but not exclusively■ Home and office balance■ Feel lonely, weaker relationships■ More likely to be passed over for promotions■ “Out of sight, out of mind”

Cont’d

■ 15-20 hours per week ideal■ Far more or far less leads to lower satisfaction■ Work longer hours■ Home and work life could become blurred■ Less likely to work a traditional schedule

20-40 hours 41 or more 51 or more 61 or more0

10

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50

60

70

80

90

Group 1

Telecommuters Non-Telecommuters

20-40 hours 41 or more 51 or more 61 or more0

10

20

30

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50

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70

80

Group 2

Telecommuters Non-Telecommuters

Challenges for Organizations

■ Big initial investment■ Supervisor challenges

– Difficult to keep track of employees– Monitoring performance– Performance reviews

■ Additional training– Face to face time limited

DISCUSSION

Advantages

■ Individuals■ Increased flexibility, time, and job satisfaction■ Decreased costs ■ Increased quality of life■ More disposable income■ More family time■ Work/Life balance

Cont’d

■ Organizations■ Increased production■ Reduced costs and turnover■ Growth potential■ Expanded recruiting■ Easier to expand

Disadvantages

■ Individuals■ Not all jobs compatible■ Don’t want to telework exclusively■ Passed over for promotions■ Weaker relationships■ Longer hours

Cont’d

■ Organizations■ Steep startup costs■ Risk ■ Supervisor challenges■ Training

Opportunities

■ Impact on economy■ Larger salaries, more disposable income, higher quality of

life■ Expansion, R&D■ Finding best qualified individuals■ Lower prices

Cont’d

■ “Greener”■ Reduced wear and tear■ Rebuild infrastructure■ Ability to catch up

CONCLUSION

Conclusion

■ Major strides in past 20 years■ 80% of workforce desires to telecommute■ Organizations being proactive■ Medical/Health and customer service especially proactive■ Major impact on individuals, organizations, economy, and

environment

Outlook

■ Continued desire■ Continued growth■ Organizations becoming more willing■ Too big to ignore■ Next 20 years potentially as impactful as past 20 years

QUESTIONS?