Telecommuting Programs: Nicety or Necessity?
In today’s economic climate where business bankruptcy filings are at a run rate of over 5,000 filings per business day, with no prospects for any kind of economic recovery until late 2009 or 2010 – business owners are being forced to look at new ways to cut costs to remain in business today that will also increase their competitive advantage in the long run.
The business trend of rapid growth and seemingly unlimited spending, which transitioned into an era of mergers & acquisitions, has resulted in today’s necessity of more than just corporate downsizing, but strategic right-sizing. Companies need to take a hard look at what resources and expenses are absolutely critical to success, which may even mean abandoning old ideas of how a business must operate
Traditionally, employers have offered telecommuting as a benefit to retain key talent. But in recent months, companies are reportedly citing it as a way to reduce real estate costs, which is one of the most significant expense items on a company’s financial statements. On average, the real estate costs associated with one full-time employee working in a dedicated office space adds up to nearly $10,000 annually. So as the recession continues and companies look to save money on real estate costs, what was once considered a nice-to-have privilege is now viewed as a business necessity.
This is not to imply that the corporate office will disappear. But pure and simple - telecommuting programs save companies money. Telecommuting programs create an opportunity to reduce existing office space or postpone expansion. You also save on utilities, office equipment, phone lines, maintenance, and parking costs, not to mention all those gallons of coffee and bottled water you wouldn’t have to buy for employees who are working at home and can get their own.
An article in PC World reported that telecommuting programs can cut corporate real estate costs from 25% to as much as 90%.
Sun Microsystems, which has allowed employees to telecommute since 2000, has seen huge cost savings. With about 19,000 employees worldwide -- over 56% of its total employees -- working in shared workspaces or at home, savings have totaled about $387 million in office space and utility costs over a six-year period.
An Alexandria, Va., insurance company reduced its office space from 12,000 square feet to 4,000 square feet after implementing a telecommuting program in which about 50 percent of employees participate, reportedly saving the about $400,000 a year in lease payments.
Other common survival tactics for companies have been layoffs, salary cuts and reduced benefits. Because of this, employees are required to do more with less and companies are struggling to find ways to keep them motivated.
Telecommuting programs are a big incentive for current and prospective employees. Employees benefit financially because of commute-related savings. And according to a study by the American Psychological Association which examined 20 years of research on the effects of telecommuting, employees that telecommute report higher job satisfaction, are more reluctant to leave the company, report less stress, have improved work/family balance, and receive higher performance ratings by supervisors. It has been well documented by researchers that a telecommuting employee who works from home even 1-2 days a week is up to 20-45% more productive than their office counterparts. In fact, the manager/staff ratio in a virtual organization is 1:40 compared to an average of 1:4 in a traditional office environment.
The concept of telecommuting is certainly not new. However, recent advances in wireless computing and collaboration software, as well as increased availability of broadband, make telecommuting programs easier to implement from a technological standpoint. Concerns about cost, security, features and reliability have been laid to rest with the introduction of hosted, Software-as-a-Service (SaaS) applications. With an Internet connected computer, employees can securely access centralized data, collaborate with remote team members and host interactive web meetings and presentations.
Workplace2go, a reseller of name brand SaaS applications, offers remote work teams an added convenience of one centralized portal to access and manage their applications. For more information or to discuss other ways Workplace2go may help you meet your business priorities and cost reduction initiatives, contact us by calling (800) 487-0044.