Telecommuting Benefits: The Bottom Line for Companies, Employees & the Community

Workshifting Benefits: The Bottom Line Kate Lister & Tom Harnish TeleworkResearchNetwork.com Sponsored By:

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Definition “ All telecommuters are teleworkers, but not vice versa.”—Jack Nilles

Workshifting Benefits: The Bottom Line
Employers
Employees
Community
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Benefits Quantified
• Company
- Productivity
- Real Estate
- Electricity
- Absenteeism
- Turnover
• Individual
- Gas/auto
- Food
- Clothing
- Daycare
• Community
- Oil
- Greenhouse gases
- Traffic accidents and costs
- Highway maintenance

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Workshifting Benefits:
The Bottom Line For Employers

Employer Benefit: Productivity
Fewer Interruptions
More Effective Time Management
Empowerment
Flexible Hours
More Hours
Businesses lose $600 billion a year in workplace distractions.

Employers Benefit: Productivity
Employees admit to wasting two hours a day.
Best Buy’s average productivity increased 35%.
75% agree that flexible work increases productivity.
Dow Chemical estimates a 32.5% increase in productivity.
Assumptions:
Avg. Salary = $32,000
- Productivity Increase = 27%
Annual Increase in Productivity for Businesses Telecommuters 50 100 500 U.S. $ Increase $288,176 $576,351 $2,881,756 $235.4 B Man Years 7 14 68 5.5 M

Employers Benefit: Facilities
More Efficient
More Flexible
Scalable
Hoteling / Hot Desking
Other Costs: parking, furniture, supplies, maintenance, security, janitorial, insurance, taxes, common area, compliance costs

Employers Benefit: Facilities
Sun Microsystems saves $68 million a year in real estate costs, $3 million a year in reduced power consumption, and $25 million a year in IT expenditures
Unisys reduced its real estate costs by 87% through telecommuting.
McKesson Corporation’s telework program saves >$1 million a year in RE costs.
Assumptions: - Fully-loaded office cost = $43/sf - Reduction in office space = 18% Annual Saving in Real Estate & Electricity for Businesses Telecommuters 50 100 500 U.S. RE/Electricity $151,846 $303,692 $1,518,462 $124.0 B

Employers Benefit: Absenteeism
Stress
Exposure to Illnesses
Occupational / Environmental Hazards
Driving accidents
Working While Sick
Job dissatification
Telecommuting has proven to be the 2nd most effective method of reducing absences behind flexwork in general

Employers Benefit: Absenteeism
Unscheduled absences cost employers $1,800/employee per year; that adds up to $300 billion per year for U.S. companies.
AMA data and U.S. GSA telework model shows a 63% reduction in unscheduled absences per teleworker.
64% of managers felt reduced absenteeism was a strong reason to allow flexible work.
Assumptions:
Reduced absenteeism = 3.7 days/yr
- Annual cost per unscheduled absence = $310
Annual Saving Due To Reduced Absenteeism for Businesses Telecommuters 50 100 500 U.S. Absenteeism $56,700 $113,400 $567,000 $46.3 B

Employer Benefit: Attraction / Retention
Among top non-financial benefits
Expands talent pool
Geography
Caregivers
Part-timers (26M)
Disabled (16M)
Rural
Retirees
Over 70% of employees say they would like to work from home, at least part of the time. More than a third say they’d choose the option to telecommute over a pay raise.

Employer Benefit: Turnover Savings
Attrition costs 75% of a non-exempt salary and 150-200% of exempt salary.
85% of employers say telework increases employee retention.
72% of employees say they’d choose a flexwork job over traditional.
Gen Y workers are attracted to flexible work arrangements.
70% of Boomers plan to work for pay after retirement
Two-thirds of employees would take another job to ease the commute.
25% reduction in attrition
cost of turnover at 138% of wages
Annual Saving Due to Reduced Turnover for Businesses Telecommuters 50 100 500 U.S. Turnover $38,046 $76,092 $380,459 $31.1 B

Employer: Total Savings (Half-Time) Total Annual Employer Savings for Businesses Telecommuters 50 100 500 U.S. Productivity $288,176 $576,351 $2,881,756 $235.4 B RE/Electricity $151,846 $303,692 $1,518,462 $124.0 B Absenteeism $56,700 $113,400 $567,000 $46.3 B Turnover $38,046 $76,092 $380,459 $31.1 B Total Savings $534,768 $1,069,535 $5,347,676 $436.8 B

Employer Benefit: Other
Potential financial incentives
Improved Continuity of Operations
Community citizenship
Alternative to off-shoring
Avoid environmental sanctions
Avoid city access fees
Reduce overtime
Reduce overstaffing
24/7 global coverage
Fewer meetings
Results-based management
Reduce potential for discrimination
Increase employee empowerment
Improve work-life balance
Avoid of local labor burnout
Equalizes personalities
Local licensing compliance
Local knowledge hires

Employer: Concerns
Control
Productivity
Technology /Costs
Security
Culture

Employer Concerns: Security
Training
Virtual Private Network (VPN) / Biometrics
Virus Protection / Monitoring
Firewalls
Personal Use

Employer Concerns: Culture
Training
Esprit de corps
Advancement
Communications
Can vs. Can Not's

The Bottom Line For Employees

Workshifting: Employee Benefits
Commute – 63%
Flexibility – 49%
Productivity – 29%
Money – 28%
TeleworkResearchNetwork.com

Workshifting: Employee Benefits • 90% of home-based telecommuters say they are happier with the balance in their lives because of working from home. • During the 2008 run up in fuel prices, two-thirds of employee said they’d take another job to ease the commute. Total Per Person Employee Savings / Year Scenario Low Avg. High Days 5.7 10.1 15.4 Dollars $1,966 $4,203 $6,808

Workshifting: Employee Concerns
Self-discipline
Working Space
Loneliness
Co-Worker Jealousy
Advancement
Overworking

The Bottom Line For Community

Workshifting: Community Issues
Pollution
Fossil Fuel Dependence
Traffic Congestion
Highway Maintenance
Other

Community Savings Annual Greenhouse Gas Reduction (tonnes unless noted) Telecommuters 50 100 500 U.S. Greenhouse Gases 65 129 647 *52.8 MMT Equiv. Cars 12 23 117 9,596,859 *including 50MMT of CO 2 or 27% of U.S. 2020 Goal Annual Oil Savings Telecommuters 50 100 500 U.S. Barrels of Oil 353 707 3,534 288.7 M* * 36.6% of Persian Gulf imports $ Saving for Oil $28,275 $56,550 $282,749 $23.1 B

Community Benefits Annual Reduction in Highway Miles / Accident Costs Telecommuters 50 100 500 U.S. Accident Savings ($) $14,211 $28,421 $142,107 $11.6 B Vehicle Miles 140,625 281,250 1,406,250 114.9 B Maintenance $2,391 $4,781 $23,906 $2.0 B

Workshifting Community Benefits The Environmental Ripple Effect
Less Travel
Teleconferencing
Remote Training / Webinars
Less Building Construction
Less Office Equipment / Toxic Waste
Less Paper

Telecommuting: Bottom Line Benefits Total Annual Benefits—All Constituents Telecommuters 50 100 500 U.S. Total Employer $534,768 $1,069,535 $5,347,676 $436.8 B Total Employee $210,167 $420,333 $2,101,666 $171.7 B Total Community $44,876 $89,752 $448,762 $36.7 B TOTAL $789,810 $1,579,621 $7,898,104 $645.2 B

Telecommuting: Other Community Benefits

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Telecommuting Benefits: The Bottom Line for Companies, Employees & the Community

by Kate Lister

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