The economist: Home warriors
10.11.2008. | analytics
Telecommuters need more than e-mail and a broadband connection
The best thing about being a foreign correspondent is not having to commute to the office every day, attend dreary meetings, dress soberly, and generally get distracted from the nitty-gritty of doing the job. The worst thing is being out of touch with colleagues at head office, with little say over how your stories are treated. But if you can handle the patchy feedback and total lack of control, the freedom pays dividends in productivity and sheer job satisfaction.
Being one of the most portable jobs on the planet, journalism provides a daily reminder that work is something you do, not some place you go to. For the past quarter of a century, your correspondent has smirked about the time and energy he’s saved through not having to travel to work.
When he commuted back in the 1970s, he spent 80 minutes a day strap-hanging on trains and buses, and hoofing it in between. On the odd times he drove, it took an hour and at least a gallon of petrol a day. By telecommuting, he reckons he’s saved the planet some 2.5 tonnes of carbon dioxide for each of the past 25 years.
He’s not alone. Gartner Dataquest, a market-research company, reckons one in four employees in America worked from home for at least one day a week last year. Over half of all businesses in the United States now allow some form of telecommuting. European employers are further ahead still.
However, it’s what’s not being done that’s even more interesting. One study published earlier this year reckoned 33m Americans have jobs that could be done from home. If all of them started to telecommute instead of drive to work, oil imports would drop by over a quarter, and carbon emissions would fall by 67m metric tonnes a year. In terms of hours saved, each telecommuter would get the equivalent of an extra 25 working days of holiday per year.
The telecommuting boom has been driven in part by the rapid penetration of broadband in the home, easier and cheaper forms of IP telephony, more robust VPN (virtual private network) software, plus a new generation of powerful laptops that are true desktop replacements. Actually, that “technological pull” has existed for quite a while. What’s different today is that, complementing it, there’s now an “economic push” for telecommuting from business itself.
To gain an edge over the competition, firms have begun belatedly to realize how much more agile they must quickly become. Success, it’s now understood, goes to those that can genuinely reduce costs, recruit and retain the best employees, and ensure business continuity when disaster strikes.
A sure-fire way of saving money is to reduce the amount of office space and services—generally reckoned to be around $10,000 per employee annually. Telecommuting doesn’t remove all those overheads at a stroke, but it can easily halve them.
Surprisingly, firms also find that telecommuting can reduce their communications costs. That’s because a broadband connection to the home—and telecommuting is impossible without one—can always be configured as a second (essentially free) voice line as well as a high-speed data connection. That saves firms from having to reimburse employees for making business calls at high residential rates.
The other big saving comes from reducing labour costs. Employers find they can often recruit cheaper and better employees as telecommuters by going outside their normal catchment areas. An added bonus is that teleworkers don’t incur relocation expenses.
There are productivity benefits, too. Telecommuters at American Express, for instance, are reckoned to generate over 40% more business than their office-bound colleagues. British Telecom’s 9,000 teleworkers are apparently 30% more productive than their office counterparts.
That may be just the extra hours they put in. Telecommuters are famous for clocking on much earlier and clocking off far later than their office counterparts.
But as experience with telecommuting has accumulated, doubts about some of its reputed benefits have begun to surface. For instance, Korn/Ferry, a recruiting firm based in Los Angeles, finds the careers of telecommuters are believed to stagnate—as out-of-sight translates into out-of-mind.
The unhappiness is mutual. Half the bosses in the Korn/Ferry study felt the work done by remote employees suffered over time through lack of face-to-face contact with fellow workers. With 40% of its employees working away from the office every day, IBM has been alarmed enough to do some soul-searching.
Research it commissioned recently from Jay Mulki, a marketing expert at Northeastern University’s business school, points to two particular challenges that need addressing—the feeling of isolation and the difficulty of achieving a healthy work/life balance when employees operate from home. “When face-to-face communication isn’t possible,” says Mr Mulki, “teleworkers need a substitute—and voice-mail isn’t it.”
Technology, it seems, is both the problem and the solution. What most telecommuters rely on—e-mail, voice-mail, conference calls and instant messaging, plus a broadband-connected computer—will do the job, but only just. Without some form of “telepresence”, remote workers tapping away at their keyboards in their pyjamas will always be struggling in the dark.
The good news is that the cost of providing telepresence—visual and aural feedback that makes remote users feel they are all in the same room together, having personal conversations—has started to come down quite steeply.
Depending on the number of screens used, these high-definition video teleconferencing systems that deliver life-size images of the participants used to cost $500,000 or more per room. Cisco Systems, a network equipment maker based in San Jose, California, is now selling a personal telepresence system for $33,900.
That’s still big money by any measure. But with petrol at $5 a gallon today (and probably double that in a decade’s time), think of the savings to be made. Cisco reckons to have saved $70m in travel expenses in 2007 alone from the 200 telepresence systems it’s installed in its remote offices over the past few years.
And now a small start-up called LifeSize Communications in Austin, Texas, has introduced a personal teleconferencing system for $6,000. It lacks some of the bells and whistles that more professional systems offer. But it’s more than enough for a foreign correspondent filing stories from his bedroom.
You can find original text of The Economist here.