Why Are Some Companies Moving Away from Telework?

Why Are Some Companies Moving Away from Telework?

Experts blame lack of communication and mismanagement

Aliah D. Wright By Aliah D. Wright
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Telecommuting on a regular basis has grown 115 percent in the past decade, a new report on telecommuting reveals—nearly 10 times faster than the workforce itself has grown.

So why are some companies walking away from telework?

In recent years, Best Buy, Yahoo, IBM, Honeywell and Bank of America have abandoned their telework initiatives. Each said they wanted to improve communication, collaboration and teamwork by bringing employees back into the office.

"Reasons like improving productivity and easier collaboration are often given, but for every public denouncement of telecommuting, there are hundreds of successful telecommuting programs out there showing us that productivity and collaboration are possible and, in many cases, even better in telecommuting environments," said Brie Reynolds, senior career specialist at FlexJobs and Remote.co. Her Boulder, Colo.-based organization and another telework think tank, Global Workplace Analytics in San Diego, wrote The 2017 State of Telecommuting in the U.S. Employee Workforce Report referenced above.


​Technological advances such as digital whiteboards, videoconferencing, and collaboration and communication apps have allowed employees all over the world to work from anywhere at any time. As a result, whether they're in Istanbul or Indiana, more employees are working at home, on the train, at co-working spaces (think WeWork), or in coffee shops or restaurants.

Use of these remote-work options has been steadily rising.

According to a recent Gallup poll, 43 percent of employed Americans said they spend at least some time working remotely. Gallup's 2017 State of the American Workplace study also points out that companies that encourage telework have fewer retention problems and find it easier to recruit talent.

More people telework than work part time.

Impact of Telecommuting

Employers can save over $11,000 per half-time telecommuter per year. Across the existing work-at-home population, that potentially adds up to nearly $44 billion in savings. If the telecommuting workforce expanded to include those who could and wanted to work from home, the potential employer savings could approach $690 million a year.

​Savings factor (based on halftime telecommuting)
​Assumed decrease with half-time telecommuting
​Savings estimate for 3.9 million existing half-time telecommuters
Savings estimate for 62 million potential telecommuters

​Productivity

​15%
​$27.5 billion
​$436 billion
​Real Estate
​25%
​$7.6 billion
​$121 billion
​Absenteeism
​31%
​$5.1 billion
​$81 billion
​Voluntary turnover
​10%
$​1.5 billion
​$24 billion
​Continuity of operations
​1 day/year
​$1.7 billion
​$27 billion
​Total employer savings
​$43.4 billion
​$689 billion

Source: 2017 State of Telecommuting in the U.S. Employee Workforce; Global Workplace Analytics, FlexJobs

Savings Abound

​The savings associated with telework, most companies found, are astronomical.

For example, as SHRM Online reported earlier this year, IBM once completely embraced remote work. In 2011, 40 percent of the tech company's employees worldwide telecommuted. As a result, it saved about $100 million a year in the U.S. and had reduced office space by 78 million square feet.

Today, "employers can save over $11,000 per half-time telecommuter per year," according to the FlexJobs telework study. "Across the existing work-at-home population, that potentially adds up to $44 billion in savings." If more could and wanted to work from home, the report states, the potential employer savings could reach $690 million a year.

Companies like Cisco say telework not only has helped them save tens of millions in real estate costs and travel costs, it also has helped them recruit top talent.

Speaking at the TRaD Works Forum, a remote-work conference held recently in Washington, D.C., Jason Phillips, Cisco's vice president of digital HR and global chief of staff, said his company doesn't "want to be geographically bound by the best talent."

 

[SHRM members-only toolkit: Managing Flexible Work Arrangements]


Reasons to End Telework Have Varied

​In an interview with SHRM Online in April, Cord Himelstein, vice president of marketing and communications for Michael C. Fina Recognition, an employee rewards and incentives company, said ending remote work "appears to be driven primarily by … the idea that going back to the way things were will restore old glory.

"Some remote workers in these situations are given impossible choices to relocate across the country or face termination," he said. "The problem with these policies is they do not take into account how [remote working has] emerged as a top driver for employee satisfaction in the last 10 years or so."

Gallup's study points out that employees who telework at least three days a week are more engaged at work.

If a telework program isn't working, experts say, it's usually due to a lack of communication and a culture that doesn't embrace it.

"When we hear a telecommuting program is ending, we sometimes also hear that telecommuters who are being called back to the office were not contacted by their managers for months or even years at a time," Reynolds said. "There needs to be a well-thought-out communication structure for any remote team that fosters regular, consistent and quality communications between managers, employees and co-workers. There also needs to be a focus on results, processes, culture building, work/life balance, productivity, cost savings and more," she added.

When Yahoo's last CEO, Marissa Mayer, announced a ban on telework in 2013, reaction was swift and unforgiving. Many derided the company across social media sites and in news articles online, refusing to believe the reasons given for ending a program that was once lauded as groundbreaking. Some pointed out that declining sales may be one key reason why Yahoo—along with Best Buy and IBM—called employees back to the office.

When companies decide to end their telecommuting programs, it's an attempt to solve a much larger problem, Reynolds maintains. "It happens at companies where market performance is an issue or revenues are down, [where] there have already been layoffs, or where there's a real problem with managerial practices," she said. "But it's usually never about telecommuting in and of itself."


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