Quick Changes for Business 2011

Companies Embrace Telecommuting as a Retention Tool

Rob Reuteman, |Special to CNBC.com
Andreas Pollok | Photodisc | Getty Images

Companies that allow or encourage their employees to telecommuterather than come to the office are more interested in maintaining a happy workforce than achieving any direct cost savings, experts and corporate executives say.

CiscoSystems ,with 65,000 employees in 92 countries, has saved $1 billion in the past 2.5 years through video conferencing, but the real payoff is retention, says Gordon Feller, a director with the company’s Internet Business Solutions Group.

“But for us, the primary driver for a remote workforce is to retain and attract talent, and keep that talent fulfilled and creative,” he says. “It’s a lot easier to increase happiness and productivity than to add another employee.”

It’s much the same story with financial-services giant State Street , which has nearly $2.12 trillion under management and 29,000 employees in 26 countries.

“We approach it more from a talent-retention or recruiting perspective," says Mike Scannell, senior vice president of global human resources at State Street. “It differentiates us as an employer and it’s a value proposition for potential job candidates.”

State Street found that 67 percent of its employees wanted some type of flexible work schedule, whether it’s working more hours in fewer days of the week or working from home some of the time.

“We regularly measure the level of engagement we have with our employees,” says Scannell. “We find that the higher the level of that engagement, the better business results we show.”

Work-Life Balance

According to a June survey of 5,300 employees by the online job site CareerBuilder, 10 percent said they telecommute at least once a week, an increase from 8 percent in 2007.

Forrester Research recently bolstered its 2009 projection that 63 million U.S. workers will telecommute at least part-time by 2016.

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“We're well on our way to hitting that mark,” says T.J. Keitt, a senior analyst with Forrester. “To cope with a more mobile workforce, many organizations have bolstered deployments of laptop computers, smartphones, and collaboration software.”

The Forrester survey says 46 million Americans now telecommute at least part-time. Among the benefits cited to companies are better recruitment opportunities, higher retention, improved morale, lower operating costs, fewer business interruptions, and a reduced carbon footprint.

Nevertheless, there are skeptics, who say some of advantages of telecommuting are exaggerated or simply non-existant.

Ann Bamesberger, co-founder of the Co3 Group, a consultancy focused on mobile workforce issues, is among them.

“The green thing hasn’t really panned out, and the commuting argument hasn’t proven to be that important,” she says. “Shedding real estate and office space? In this economy, you can’t get rid of the real estate anyway."

Bamesberger adds: “Just the same, it’s nuts for a company to think it needs to pay for resources and force people to drive to it to be part of a team.”

She should know. More than 15 years ago, while vice president for Open Work Services at Sun Microsystems, Bamesberger implemented programs that allowed 17,000 of Sun’s 35,000 employees to quit their offices.

Of all the reasons for a company to allow telecommuting, however, hiring and retention still lead the pack.

“There’s nothing clear yet that employees who telework achieve cost savings,” said Forrester’s Keitt. “Sure, there can be savings through some travel reduction, savings through video conferencing. But the overarching theme is that employers are saying they need to allow for a better work-life balance on the part of their employees.”

Concerns most cited by companies in considering a telecommuting initiative are security, productivity, tech support, training, and supervision.

In the CareerBuilder survey, 37 percent of respondents claim they’re more productive at the office; 29 percent said they are more productive at home. Thirty-four percent claimed they are equally productive at home or in the office.

Sixty percent of Cisco employees say they don’t need to be in an office to be productive. Sixty-six percent say they’d accept a lower-paying job with more flexibility than a higher-paying office-based position.

Many managers also still express concern that workers won’t be as productive when working away from the office, although some software solutions allow close monitoring from any location.

“The reality is that managers simply don’t trust their employees to work untethered,” says Kate Lister, president of the Telework Research Network. “That’s not going to change until companies start measuring performance based on results, rather than the number of hours someone sits at their desk.”

Trust Issue

Co3 Group's Bamesberger agrees. “Companies should all be managing by results,” she says. “Line-of-sight management continues because there’s no trust. Trust is the most important attribute, and I don’t think there’s any right now.”

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Just as crucial as a lack of trust on the part of an employer is the employee’s measure of fear.

“A downward economy brings out the worst—people are scared,” says Bamesburger. “They think that if they’re out of sight, they’re out of mind and they’ll lose their jobs. ‘If I can be seen and can look busy, I’ll keep my job,’ they think.”

Even in the absence of formal telework programs, however, more people are finding ways of working remotely because technology allows them to do so, says Keitt of Forrester.

“Smart phones allow people to check their emails, mobile apps allow more work to be done anywhere,” he says. “The emergence of tablet computers and the wider distribution of laptops, the use of virtualization technologies—all these things contribute to the increased portability of work.”

Mary Ellen Slayter seems to have balanced the equation. The director of content development for a digital publishing company, Slayter recently moved from its headquarters city of Washington, D.C., to Baton Rouge, La., where she wanted to live.

“As a company, we’re able to let people do that,” she says. “Its my responsibility to stay tethered to the home office. I’m in constant touch via email, texting and instant messaging. I make sure boss knows what I’m working on.”

“It’s actually made me a better communicator,” adds Slayter. “As a result, work is not a place I go to. It’s a thing I do.”