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Making Telecommuting Work

HR Magazine, October 2001Telecomuting hasn't become the dominant workplace option some predicted. But experts say—and employers' experiences prove—that companies can adopt strategies to make these programs highly successful.

It was supposed to be the next great workforce developmenta modern approach to work that allowed employees to perform vital business functions from the comfort of home, and allowed employers to enhance productivity and work/life balance, improve air quality, reduce traffic congestion and cut costs on office space.

And while current assessments of the success of telecommuting vary widely, one thing is clear: This once-futuristic trend has yet to materialize into the dominant modus operandi that some experts predicted. In fact, depending on the estimate you choose, the number of U.S. telecommuters falls somewhere between 9 million and 24 millionfar short of the 55 million telecommuters that some forecasters predicted would be in place in the early 2000s. (For more information on the various estimates of the number of telecommuters in the United States, see An Unsure Tally.)

This shortfall has occurred in spite of the intentions of employers, which are offering telecommuting programs in greater numbers, according to the 2001 Benefits Survey published by the Society for Human Resource Management (SHRM).

But simply offering such programs doesnt ensure that employees will take advantage of them.

Case in point: Although the majority of Fortune 1,000 firms offer telecommuting, more than half say that only between 1 percent and 5 percent of employees participate in such programs, according to a 2001 report by the Cutter Consortium LLC, an Arlington, Mass.-based IT business strategy company.

Telecommuting in the large has not replaced the traditional office environment and does not seem to be creating an overnight revolution, says Cutters Business Technology Council Fellow Ed Yourdon. People are practicing it to a much smaller extent than one might have imagined.

What happened? Why has a system that appears to offer advantages to both employers and employees failed to take a firmer foothold in corporate America?

Experts say one of the biggest culprits in the wavering acceptance of telecommuting is management reluctance, which often springs from such factors as a reliance on line-of-sight management styles, a lack of training, discomfort with flexible workplace programs and a dearth of information regarding telecommutings effect on the bottom line. Fortunately, the telecommuting programs in place at some companies offer encouraging examples of ways to overcome these challenges.

Old Habits Die Hard

If some managers hesitate to embrace telecommuting, part of the reason is that many workplaces still value and reward commitment to the office and being there to prove it.

The biggest barrier to telework is still resistance by middle management, says Charles Grantham, president of the Institute for the Study of Distributed Work based in Windsor, Calif. If Big Bob looks out over his Dilbertville and doesnt see cubicles filled with busy workers, hes going to wonder and feel uncomfortable about what hes paying the Little Bobs to do.

This surveillance-type of management style, experts say, hasnt changed much over time.

And altering it remains one of telecommutings biggest challenges because it runs deep in some organizations.

How deep? According to a study of 1,353 employees and 151 managers by Boston Colleges Center for Work & Family in Chestnut Hill, Mass., managers are more likely than employees to believe that telecommuting negatively affects employee-supervisor relationships; managers also are less likely to feel that telecommuters get the same promotions and performance reviews as other employees.

Its not that the individual isnt working hard, its that the team dynamics arent working well enough, says Kathy E. Lynch, manager of marketing communications at the colleges Center for Work & Family. If managers dont believe they have the responsibility and authority to control the relationship, it wont work.

One way of ensuring that managers feel they have the control they need is to provide written program guidelines, says Kenneth H. Pritchard, author of Flextime, a white paper published by SHRM. He adds that such guidelines should:

  • Explain how managers and employees can work collaboratively to ensure an interactive effort.
  • Explain that each job description will state whether that position is eligible for telecommuting.
  • State in employment policies that the arrangement may be terminated if it no longer meets the companys needs or if the employees performance suffers.

Guidelines can affect managers comfort levels when implementing flexible workplace options, agrees the study Work Life Initiatives 2000. However, the studyconducted by the consulting firm of William M. Mercer Inc. and Bright Horizons Family Solutionsfound that only 24 percent of companies that offer flexible work arrangements (which include telecommuting) also provide guidelinesa drop of 2 percentage points from 1998.

Another way to make managers more comfortable with telecommuting is to offer guidance detailing which employees are eligible to telecommute. For example, at Cox Business Services customer care center in San Diego, employees are rigorously screened; only those scoring in the top 30 percent of performance measures are allowed to telecommute.

To help managers gauge which employees are best suited for telecommuting, the American Telecommuting Association (ATA) in Washington, D.C., has developed a Telecommuting Affinity Index. (For a link to the tool online, see the online version of this article at The tool asks potential telecommuters to rate how strongly they agree or disagree with a series of statements, and then assigns point values based on their answers.

Similarly, ATAs Telecommuting Work Suitability Index evaluates how much of a jobs responsibilities can be reasonably handled by a telecommuter.

Another way to help managers feel they have the tools to properly control the telecommuting experience is to provide training. Such training is not to be underrated, says Gil Gordon, a telecommuting consultant in Monmouth Junction, N.J., for the past 20 years.

Manager training can make a big difference between trial and success and trial and error, he says. Every manager needs to approach telecommuting with full preparationyou dont just strap on a set of skis and push them down the mountain with no direction.

To reinforce how much an organization values the ability to manage alternative work schedules, Grantham suggests making this a selection and promotion criteria for management-level candidates.

HR could take a leadership role in its companies by recruiting managers who are already predisposed to being open to alternative work options, he says. They need to see that the past success that traditional managers have achieved just may not cut it anymore. Show them that those who embrace alternative work programs will have a competitive advantage.

Bottom-Line Data

Grantham believes that if HR helps managers develop and install a system of metrics that ties work productivity to the bottom line, managers will be more accepting of telecommuting. He points to three basic staffing metrics that HR should apply to telework situations:

  1. Cost of time and recruitment.
  2. Rates of retention of valuable employees.
  3. Rate and cost to recycle (or retrain) talent.

In short, HR should provide supervisors and managers with objective databased, for example, on targeted questions asked during new-hire and exit interviewsthat can help them evaluate the effects of telecommuting on recruiting and retention efforts.

The potential value of such data is underscored by the Cutter study, which showed that most managers arent convinced of telecommutings effect on recruitment and retention. The study asked managers if potential employees had refused job offers, or existing employees had left their jobs, because they were not allowed to telecommute. Slightly more managers answered no than yes, (29 percent vs. 17 percent), but most (54 percent) simply werent sure.

The message: Company-specific data showing that telecommuting may help recruit and retain workers could motivate managers to embrace a program more fully.

Helping managers buy into the retention benefits of telecommuting programs may be vital because the employees and managers most likely to succeed at telecommuting are probably the ones the organization is most interested in retaining.

According to experts, the best telecommuters are self-directed, self-motivated, independent, focused, well-organized, dependable and have been in their jobs long enough to have developed solid, successful relationships with bosses and co-workers.

The best managers of telecommuters are good communicators who trust employees and value their suggestions. They also tend to be more hands-off than hands-on and reward results, not appearances.

In short, your best telecommuters, and best managers of telecommuters, are probably your best employees, period.

Even if recruitment and retention are not critical issues for your firm, keep an eye out for other business issues in your organization that telecommuting can address. Linking telecommuting to a critical business solutionand not just to work/life initiativescan be key to a programs survival.

I describe it as Corporate Advil, says Gordon. If your company is in the kind of pain for which telecommuting is at least one good solution, thats a fine remedy. Otherwise, if you dont have a compelling reason, youre popping a pill for nothing.

If telecommuting is a valid option for your company, dont make the mistake of stopping your research after completing an initial justification of the program. Gather data to ensure that a telecommuting program continues to meet your needs.

Those who are leery of gathering and analyzing such data single-handedly can turn to consultants and software programs for help with the process.

Real-World Case Studies

Are the suggestions proffered by the experts merely paper theories that dont work well in the real world? Or can employers really turn these good ideas into good practice? The experiences at several companies suggest that employers can indeed effectively implement these strategies and make telecommuting work.

The following case studies illustrate how companies can overcome barriers to telecommuting and create successful programs by, among other things, effectively preparing and training telecommuters and their managers; setting up systems for monitoring productivity through results, rather than hours worked; and supporting telecommuters and keeping them in the loop.

Merrill Lynch: Preparation

Before instituting a formal telecommuting plan in early 1996, Merrill Lynch spent four years studying how best to implement the workplace option. Little wonder, then, that the companys program exemplifies a number of the recommendations offered by experts.

The results: The company developed a 21-page managers guide to alternative work arrangements, along with a four-step preparation process, which goes beyond just distributing a set of rules. Much like a family counseling session, it includes a workshop in which the employee and the manager hash out issues that could potentially poison the telecommuting relationship.

For example, both employees and managers consider, devise and agree on ways of measuring productivity, workflow and time management; map out how the telecommuter will communicate with co-workers; and discuss how to quell fears of career sabotage from being out of the office.

The final step is up to two weeks of practice in a telecommuting simulation lab, a kind of telecommuting school, where soon-to-be telecommuters work alone. Although they may be in the same building as their managers, they communicate only by phone and e-mailjust as they would from home. They also learn how to troubleshoot problems with their PCs, software and other equipment they will use at home.

In 1996, Merrill Lynch had about 100 telecommuters; today, 3,500 people work from home between one and four days a week, says spokesperson Selena Morris. Employees and managers report an increase in productivity between 15 percent and 20 percent among their telecommuters, 3.5 fewer sick days a year and a 6 percent decrease in turnover during the first year of the program.

The program also has helped boost retention. In January, Merrill Lynch announced it would move its New Jersey headquarters from Somerset to Hopewellthe kind of decision that lengthens commutes and spurs workers to seek new employment. But the companys telecommuting program helped it retain between 40 and 60 people it otherwise would have lost, says Morris.

Womble Carlyle: Monitoring Through Results

This summer, Sean Scott, chief information officer at Womble Carlyle, a law firm based in Winston-Salem, N.C., asked the firms top management to allow his six-person help-desk staff to telecommute. The move was a first for the 480-attorney firm.

Scotts goals were two-fold: To give employees a perk and to help the firm free up valuable office space, he says.

For Scott, the decision was eased by the fact that he believes help-desk functions lend themselves well to telecommuting, because all interactions take place over the phone. More importantly, he has multiple ways of monitoring the staffs work performanceby volume of calls, length of hold times, the percentage of resolved calls each day and the number of hang-ups, for example.

My feeling was that, sure, it could be a management nightmare in some situations, but in my case, I have total ability to monitor and track performance, he says.

He also seems confident that his staff will take the arrangement seriously. People realize that a work-at-home arrangement is only as good as they make it, says Scott. If production and performance suffer, they know itll affect the whole outcome for both parties.

And he recognizes that he has options if the program doesnt meet expectations. Ultimately, he says, if its not working out, I can always call them back into the office.

Putnam Investments: In the Loop

Recruiting was an expensive proposition for Putnam Investments, an investment management company located in Boston. The company routinely held lavish open houses and job fairs to recruit prospective hires. But as the areas labor market tightened, attendance dropped and results plummeted.

When we were attracting only 80 attendees, a dozen of which were qualified, for between 600 and 700 job openings, we knew we had to find a better way to cultivate new employees, says Ken Daly, managing director and director of general services at Putnam. Scarce office space in locations where the company identified its talent pools led it to create virtual, at-home jobs, significantly expanding an existing telecommuting program.

Called Work@Home, the expanded program targets residents in New England states for full-time jobs in customer service, financial services, systems and management. Through partnerships with four colleges in Massachusetts, Maine and Vermont, the company offers job training and practice sessionseither on campus or onlinefor the work-at-home arrangements. Putnam instructors lead the employee training.

The company then sets up home offices, providing employees with a computer and installing either ISDN or DSL serviceeven in rural locations.

Despite the fact that Putnams telecommuters are far-flung, the company has successfully addressed the isolation associated with telecommuting. The company pays special attention to maintaining a bond with its work-at-home staff.

In some cases, managers travel to training sites to meet with program graduates in person. But even when this is not an option, constant communication between the organization and new employees helps stave off problems, says Ed Whalen, managing director and director of human resources.

For example, Putnam co-workers stay connected with telecommuters via hosted online chats. All employees receive electronic newsletters. And when they log in to Putnams intranet each morning, theyre greeted with updates on company events. Last year, the company even rented buses to pick up the workers and their families who wanted to attend the annual holiday party in Boston, Daly says.

Weve not built a separate world for people, he says. I dont see work-at-home diminishing the need for offices and people in them, but I see it handling a significant percentage of our growth going forward.

The telework option hooked the recruits the company was seeking, Daly says. In Maine, for example, Putnam advertised its work-at-home positions in two local newspapers covering 38 counties. The cost: $69. The return: We got 1,700 resumes in two weeks, Daly recalls. It was an enormous success.

The telecommuting program has allowed us to go after a whole new labor pool, says Whalen.

Today, Putnams telecommuting program counts 714 people working at home in five New England states; that is nearly 12 percent of the companys 6,000 employees. Putnams work-at-home staff has one-tenth the attrition rate of its in-office workers, and productivity has increased so substantially that the company added telework positions in three more divisions, Daly says.

Adding these telecommuting positions has saved the company the cost of building additional facilitiesa point that benefits local jurisdictions as well, says Whalen. Maine and Vermont really welcomed this program because it created good job opportunities for them without building new facilities and increasing traffic, he says.

Putnam also eases the management burden for supervisors by offering short, internal, customized training sessions spread out over several weeks.

The training is focused on such issues as managing a virtual workforce, communicating, helping set employees on career paths and conducting performance management.

A value Proposition

As with many HR responsibilities, telecommuting is not a black and white issue. But it is a work option for which HR can provide clarity, leadership and guidance as the workforce continues to shift and change. And by doing so, HR professionals can create value for the business, says Fred Crandall, partner with the Center for Workforce Development in Northbrook, Ill.

HR professionals are the guardians of the value proposition of a company, he says. The whole model for work is going through a dramatic change. And HR needs to begin to realize that telework encompasses a broad and tremendous opportunity.

As they seek to take advantage of that opportunity, HR professionals should not be discouraged by less-than-100 percent employee participation in such programs, says Gordon. HR must keep such workplace alternatives in perspective.

The perception that lingers out there is that we should make this a universal thing, which it was never meant to be, he says. Telecommuting was never intended as an all-or-nothing proposition.

Susan J. Wells is a business journalist based in the Washington, D.C., area with 17 years of experience covering business news and workforce issues.


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