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To accompany our survey and current research on how organisations are making the business case for remote and agile working programmes, we interviewed Kate Lister from the Telework Research Network. Kate is a global authority on telework, and she advises businesses and federal agencies on the benefits and potential ROI of agile work programs.

If some of the themes in the interview resonate with what’s happening in your organisation then please do make sure you complete our survey. All participants will receive a free copy of the results. You can access the survey at: http://www.surveymonkey.com/s/DWFbusinesscasesurvey

DWF: Is it safe to say in a recession the main drivers for agile working and teleworking programs tend to be reducing costs?

Kate Lister: If there’s a silver lining to the recession, it’s that it has focused people’s attention on greater efficiency and anything that can help the bottom line. I tend to call telework the “solution to the problem de jour” because the benefits are so diverse—whether it’s labour shortages, changing labor force dynamics, environmental mandates, or Olympic-size traffic jams—telework offers an easy and inexpensive fix. In general, there’s some pain point that starts an organization down the path to telework, but they soon realize that it’s more than just a easy fix or short term tactic, it’s a fundamental shift in the way we work.

For example, before the recession nobody was talking about saving money as a reason for telework; it wasn’t even on the radar. It was about helping organizations hire and retain the best people. The recession has helped to move the concept out of HR or whatever silo it was in, and into the C-Suite. They’re the ones that have had to stand up in front of their shareholders and say, “We lost however many millions of dollars last quarter.” Telework and these other agile work strategies offer just what they were looking for, a way to save money, increase efficiency, and improve productivity. And given a choice between people and buildings, the former has a much larger ROI. If you’re looking for ways to save money, visit EquityRelease.co.uk.

But it’s not just about saving money. Three recent clients have each come at it from a different perspective. One saw it as a purely real estate play. For another, a healthcare organization, it was about helping employees better balance the demands of their work and personal lives. For the third, it was a way to avoid environmental sanctions. In each case, however, we were able to convince them of the value of having all the parties at the table—HR, IT, Facilities, and Sustainability. Of course, C-suite endorsement was first and foremost.

DWF: How important are improvements in productivity as a driver for remote working initiatives? Is it easy to demonstrate to the C-Suite?

KL: Productivity increases, in most organizations, are by far the hardest benefit to quantify. There are lots of studies that show people are more productive, but how do they measure that? In call centres, for example it’s pretty easy. How many calls did they answer, how many upsells were there? It’s very quantifiable and fifty to fifty five percent increases are common. The US Patent Office documented a dramatic reduction in the multi-year case backlog by having the patent attorneys working at home.

When it starts to become difficult is with knowledge worker and managers. But the real problem, is that the majority of managers aren’t managing by results, they’re managing by presence. A senior government official said, “telework doesn’t create management problems, it reveals them.”

Most managers are still trying to manage by walking around. The problem is, whether your people are two offices, two floors, or two hundred miles away, if you’re not managing by results, your not managing. The cultures where whoever comes in the earliest and stays the latest is assumed to be the most productive, simply don’t work with today’s workforce mobility. In fact, employees admit to wasting two hours a day not including lunch and scheduled breaks, right there in the office!

Study after study in organisations that have really measure outcomes show that these new ways of working increase productivity by between fifteen and fifty-five percent increase.

The productivity gains are just logical. First of all, employees tend to give back fifty to sixty percent of the time they would otherwise have spent commuting, so that’s an extra hour of productivity a day. Fewer interruptions also mean more effective time management. When someone pops their head in your office for a quick chat, it might take another thirty minutes to get your head back in the game. When you start to replace these synchronous kinds of interactions with email, chat or other and other asynchronous communications, it’s much more efficient and effective.

By the way, I’m not saying that all interactions should be virtual. Just like a blend of in-office and remote work is best form most, so is a blend of in-person and virtual communication.

It’s also worth noting that teleworkers are eager to demonstrate their productivity. We recently did a survey of over two thousand teleworkers and asked this question. “Are you more or less productive when you telework?” The vast majority said “more productive.” Here’s a word cloud of the more than 10,000 words that comprised their responses:

And when we asked, “If you work more hours when you telework, why do you do so?” The responses were generally along these lines: “Because this is a privilege and I don’t want to lose it.” This is a good gig and people don’t want to give it up so they really go the distance to prove to their managers that they’re performing.

DWF How about the argument that remote working digitally reduces employee absenteeism. Is that as hard to prove as increases in productivity?

KL: No, actually absenteeism is one of the easier ones to prove because most companies know what their absenteeism rate is. The American Management Association, U.S. General Services Administration and a number of others have shown pretty dramatic decreases in absenteeism, as high as sixty three percent. Think about it, when someone’s not feeling well, the last thing they want to do is shower, get dressed, and drag themselves to the office. But if they could just plop down in front of a computer and work at home, many times they would.

It also avoids presenteeism—something that’s as big if not a bigger problem than absenteeism.

And then there’s the reality that the majority of people who call in sick aren’t. They’re doing so because they’re stressed out, or they have to meet the refrigerator repairman, or they want to go to a parent/teacher conference or whatever.

It’s easy to figure out what that costs an employer. Just divide the employee’s annual salary and benefits by the number of days in a work year and that’s what they lose—in terms of lost productivity every day that person is not at work.

DWF: How about increasing staff retention? How key a driver is that?

KL: It’s absolutely key. Eighty percent of employees in the US, and 67% of employees in the UK say they’d like to work at home at least part of the time. More than a third say they’d choose it over a pay raise. And ten percent say they’d even give up some pay to do it.

For a non-exempt employee about the experts estimate the cost of replacing a non-exempt/hourly employee at between fifty to a hundred percent of annual salary, and between one hundred to two hundred percent of salary for exempt employees. That’s a real cost. And it doesn’t take into account the potential loss of intelligence, customers, and co-workers.

One of the interesting things organizations find when they start measuring people by what they do, rather than the number of hours they spend at their desk, is that voluntary turnover typically goes way down and involuntary turnover goes way up. When you’re being measured by results, there’s nowhere for the slackers to hide. You either perform or you don’t.

Remote work options also expand the talent pool because it allows organizations to hire outside their local geography. That’s good for employers, but it’s also good for communities. In rural areas, these new ways of working help them reduce the outbound migration of talent and business.

DWF: Do you find a view that operational continuity as a positive outcome of telework programs tends only to be in focus when there’s been a crisis?

KL: I wouldn’t say it’s only after a crisis, but there a transient surge is typical each time there’s an event that threatens continuity of operations. In 2000, for example, the threat of a bird flu pandemic led to the passage of a mandate requiring all US Federal employees to work at home to the maximum extent possible. Since then, telework has been the cornerstone of the government’s continuity of operations plan.

Again, the year after Hurricane Katrina and the bombing of a federal building, there was another push for telework. In fact, it increased fourfold the following year.

Another surge followed snowstorms in 2010 that closed down Washington for several days and another mandate was passed to add rigour to the earlier one.

The Olympics in the UK is a driving factor in telework right now.

DWF: How about the environmental impact of teleworking? Are companies attracted by the opportunities for good PR or is it more because they’re being hit by environmental taxes?

KL: Since the recession, environmental impact as a reason for telework has lost traction, but it is starting to return, particularly where there are sanctions involved. The avoidance of penalties and taxes are directly quantifiable.

Other countries are doing a better job than the US in requiring companies to reduce their environmental impact, but regardless of what’s required, we’re seeing a good bit of peer pressure among companies to voluntarily show how they’re reducing their carbon footprint.

We’re also seeing a lot of pressure from big companies such as Apple, WalMart, and others who are beginning to include sustainability measures in their supply chain criteria.

One problem we face is that not all governments count commuter travel as a business environmental impact. They focus more on the direct and indirect emissions from an organization’s heating, cooling, fossil fuel usage, etc.

Fact is, there simply is no quicker, faster, cheaper way for an organization to reduce its carbon footprint than by getting its employees off the road.

Just to give you some perspective on the potential, if all the US employees with telework- compatible jobs and a desire to work from home did so, just half the time, we could cut our Persian Gulf imports by thirty seven percent. The greenhouse gas savings would be equivalent of taking the entire New York State workforce permanently off the road. And, by the way, that assumes they only reduce their driving on telework days by 75%.

Of course, whenever you say something like that, people are going to throw up the “yeah, but’s”—“Yeah, but we’re going to be using more electricity at home.” In fact, that impact is infinitesimal compared to the impact of reduced driving.

DWF: How about reducing real estate costs? Instinctively that feels like an easy reason for teleworking to sell to the C-Suite.

KL: It is but only if you’re willing to change the way you do business. People are already working remotely. Study after study shows that office occupancy—the amount of time someone is actually at their desk—is typically in the range of 35 to 50 percent.

But one of the problems companies are having is that while people are happy to work from home part of the time, they don’t want to give up their office space. Unless a company can reduce that one-to-one desk ratio or the square footage per person, telework is not going to save money in real estate.

The industry leaders are redesigning their offices to include desk sharing and office hoteling. They’re moving that footprint from two hundred square feet per person down to a hundred and even fifty square feet in some places. That’s not only creating huge savings, it’s increasing collaboration, innovation, and efficiency because these new spaces are being designed to facilitate the work that’s being done in them.

There’s also the reality that if a company is stuck with a long term lease, there’s not a lot they can do in the short term. One trend we’re seeing is that some organisations are re-letting their unneeded space to shared office and co-working operators.

About Kate Lister:

Kate Lister is president of the Telework Research Network, a California-based consulting and research organization that focuses on creating the business case for new ways of working. They have examined and cataloged over 500 documents on global workplace strategies and created Workplace Savings Calculators™ that have been used by hundreds of US, UK and Canadian organization and community leaders to quantify the bottom line benefits of alternative workplace strategies.

Kate is a frequent speaker, and author of three books including Undress For Success—The Naked Truth About Making Money at Home (Wiley, 2009), a popular press book aimed at creating a ground-up movement to empower employees to negotiate, find, or create work at home opportunities. Jack Nilles, the grandfather of telework, wrote the foreword for the book.

About the author

Steve-BynghallSteve Bynghall is a freelance consultant, researcher and writer specializing in the digital workplace, intranets, knowledge management, collaboration and other digital themes. He is DWG’s Research and Knowledge Lead, a benchmark evaluator and research analyst for DWG. Steve previously worked at accountancy firm BDO in a variety of knowledge roles, including managing its global extranet programme.

Connect with Steve on Twitter: @bynghall or on Google +.

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