Everywhere we turn it seems the traditional 9-to-5 office structure is going the way of fanny packs and shoulder-padded dresses.
Tough economic conditions have companies scrutinizing their real estate overhead, but the jump in officeless businesses is more about productivity than cost savings, says Kate Lister, president of Global Workplace Analytics and the Telework Research Network, which track telework trends and consult businesses to develop alternative work environments.
“Whether managing employees who work 9 feet or nine floors or nine time zones away, businesses are working in a new way,” says Lister, pointing to major corporations that have longstanding telecommute polices.
AT&T employees work five more hours at home per week than their in-office colleagues, while JD Edwards teleworkers are up to 25 percent more productive than in-office peers. The Telework Research Network found the typical company can save $10,000 per employee each year by allowing them to work remotely just half the time. Those savings come from less need for real estate, lower turnover and absenteeism, and higher productivity.
“Most managers like to be able to look at the backs of their employees’ heads to make sure they are doing their work,” Lister says. “But studies have shown that workers are not at their desks an average of 55 percent to 60 percent of the time.” Instead, they’re traveling, meeting clients or socializing with colleagues.
Employees prefer flexibility in their work schedules along with the ability to combine their professional and personal lives. The happier workers are, the more productive they are—and the more loyal. “Telecommuting allows small businesses to compete in an age of skilled labor shortages by attracting the best and brightest with remote working options,” Lister says.
But it’s not as easy as shuttering the office and expecting business as usual. There needs to be a culture of trust and results. Keep the following tips from Lister in mind when structuring a telecommute policy:
• Devise a metric by which to measure cost savings related to the shift to remote workers.
• Explain to employees how their quality of life will improve, how their success will be measured, how much money the company will save and new ways they will stay connected.
• Explore part-time telecommuting. “It’s not an all-or-nothing thing,” Lister says. A part-time arrangement allows easier management of the employee’s personal life while maintaining social ties at the office.
• For each employee, establish measurable goals for the month, quarter and year—results-driven markers—as well as those for softer skills, such as response to colleague and customer inquiries.
• Don’t try to replicate the old office model. Consider doing away with regimented meeting schedules and instead rely on a more fluid and constant stream of communication via email, instant messages and social media.
• Similarly, reconsider the annual review. Instead, make feedback, correction and praise a real-time practice that keeps behaviors in constant check. Make the most of the time when you do meet face to face.
• Invest in the right technologies. More than teleconferencing capabilities, telecommuting requires workers have access to documents, projects and contacts through the cloud.
• Know when to pick up the phone—or get on a plane. “You don’t fire someone via instant messaging,” Lister says. Big announcements, discipline and dismissals still require interpersonal finesse.
Business: Chrein.com, an online marketing and web development firm in Lynbrook, N.Y.
Tactic: Closed the pricey Manhattan office, and now all employees work from home.
Results: Lowered overhead and raised profits, thanks to a decrease in attrition and more productive employees.
For almost 10 years we had a Manhattan office that cost us $5,000 in monthly rent alone. I thought it would be hip and cool for clients to come to us, but that rarely happened. Then our Hungarian web developer moved back to Europe. He was one of our main guys, and I wanted him to stay on board, so we figured out a way for him to continue, and it worked out really well. It became clear we could save a lot of money as a company and for our workers if we did away with the office.
Today I work from my home office on Long Island, N.Y. We have full-time workers in Hungary and Florida as well as a number of contract writers and designers.
Overall this is a much more efficient model. Aside from lower overhead for me, we all save on the costs of transportation and now work the two hours we would otherwise spend on the road every day.
Plus I find people are more productive since they don’t have to take time off for personal obligations, and I’m keeping employees much longer. We’re not stressed from commutes or exposed to flu in the office, and since there aren’t traditional office hours, there’s no “killing time until quitting time.” You work when you need to work, get things done and then do something else.
We are in constant communication, sending upward of 300 emails daily, and once in a while use Skype. My management style is laid-back, and a weekly meeting would be redundant.
Sometimes we do miss the camaraderie of the office. We banter through email, though it isn’t quite the same. But with some of the money I’m saving on rent, I can jump on a plane and go to Tampa or Budapest to visit my top guys.
Business: In Every Language, translation services provider, Louisville, Ky.
Tactic: Get rid of retail space, hire top employees from out of state.
Results: The company is growing, thanks to better talent and new business from outside Kentucky.
I launched the business out of my two-bedroom apartment, and eventually we had five employees working there. It was fun, but we had nowhere to grow—and I had nowhere to live! We eventually moved into a trendy retail space with a rent of $2,000 per month. I thought we needed the visibility.
At the time I had two challenges: First, our client base was very much limited to Kentucky. Second, it was hard to attract good employees to live here. We had key positions that we didn’t fill for a whole year simply because we couldn’t find good applicants. Plus, no one but our employees went to the office.
When one of our employees moved to Ohio, we couldn’t replace her, so we set her up to work remotely. That was three years ago. Today we have five employees, all working from home. One of our translators is in Brooklyn, N.Y., which allows us to be perceived as a larger corporation, and as a result we attract more business outside Kentucky.
Now we communicate by instant message and have staff video meetings once per week. As a manager I’ve had to learn to read between the lines of IMs. If someone’s Skype window is marked “busy” and I get a terse response, I might be more understanding because I know they are otherwise occupied. But if I get the same response and the light is “available,” I am likely to pick up the phone and see what is going on.
Our employees are much happier, and attrition is lower. One employee says she would find it very difficult to balance her job and her graduate studies if she had to work from a traditional office, and our woman in New York turned down an offer from a large competitor because her quality of life made our company a better place to work.
President and CEO
Business: The Dunvegan Group, maker of customer service software, Calgary, Alberta
Tactic: Create a blended model where some workers telecommute.
Results: Real estate costs were cut by half, attrition-related costs slashed and a companywide culture of camaraderie was nurtured.
I founded this company in 1987 and eventually it grew to 46 people working at the office. Then in 2001 we lost our biggest client, downsized to six employees and went officeless.
Our programming team was already lobbying to telecommute. They were doing critical work, but also had family responsibilities, caring for aging parents and dealing with spouses’ job transfers. By coincidence, all three of them met their spouses online and all the spouses are from different countries. At various times these employees worked remotely from Scotland, Japan and the Philippines. Our guy in the Philippines made weekly calls with a satellite phone from a thatched-roof hut. We could hear a rooster in the background!
Going officeless saved us $50,000 per year in real estate, but as we rebuilt, we found some of our employees couldn’t function effectively in a home office environment; they needed routine and discipline. The best model is to rent a smaller space where some employees work, while others can work from home. New hires go through training in our offices, where they get to know our staff and get used to the culture.
To keep everyone connected, we have weekly phone meetings and a once-a-month “Coffee with the President” call where I update the company. Then, once per year, we all get together in person to socialize and have team-building exercises.
As a leader, I’ve changed my vocabulary to address everyone with the messages “I’m relying on you,” and “I’m so fortunate to have you on the team.” This instills the sense we’re counting on each other. Before, it was an environment of “no news is good news.” The new culture is good for everyone.