3 Threats to Telecommuting

Is Working from Home Green?

The 5.2 million telecommuters (considered people who worked at home at least twice per month) are already saving 10 million barrels of oil per year, according to a study from the Mobility Choice Coalition by NRDC’s Justin Horner. If all of the employees who telecommute once per month started to do so once per week, it would cut oil demand by 23 million barrels of oil per year, saving employees $1.9 million in transportation costs.

Similarly, Sun Microsystems allows 19,000 employees to work from home at least one day per week - a policy it has had in place for over 14 years. They found that this saves each employee 107 hours per year in commuting, which is the equivalent of three weeks of vacation! Plus, the reduced commuting prevented an estimated 173,000 car trips per year and employees save 120-180 kilowatt hours of energy per year by working at home rather than in a Sun office. Combined, these energy savings will prevent 52,000 carbon dioxide equivalents from entering the atmosphere each year.

Cost Savings of Telecommuting

Not only can telecommuting save energy and time, but companies that let their employees work from home half of the time can save $10,000 per year, according to the Telework Research Network’s study for 250 telecommuting cases. Half of these savings come from increased productivity, less time spent commuting (which equates to more time working), and more effective time management, according to the study. The rest come from energy savings, reduced sick time, office consolidation, furniture, and lower employee turnover.

The employee saves money, too - between $2,000 and $6,800 annually. This comes from reduced gas and automobile use, fewer parking fees, lower food costs and reduced clothing needs.

The aforementioned Sun Microsystems study also found these results to be true. The company saves an estimated $64 Million per year in real estate costs, $2.5 million in electricity, and $20 million in administration costs. Employees saved $2,335 per year in reduced transportation costs.

So, Why Aren’t More People Working from Home?

So, telecommuting has clear benefits: increased productivity, energy savings, happier employees, and lower costs for employers and employees. However, despite these proven advantage, companies are slow to allow their employees to work from home.

American Community Survey data shows that between 2005 and 2011, the percentage of the workforce (not including self-employed individuals) that works from home grew from 1.86% to 2.5%, or from about 1.8 million employees to 3.1 million. This is a very small increase given telecommuting’s numerous benefits.

Plus, a March 2010 study by Microsoft showed that 41% of respondents worked for companies with work-from-home policies, and only 15% thought their companies would support a flexible working arrangement.

Threats to Telecommuting

Threat #1: Employers may believe that telecommuters are out of touch with their colleagues, or worse, unproductive. However, in a 2012 study, the University of Wisconsin-Milwaukee showed that this is not the case. It found that the stress of interruptions in an office was stronger than feelings of closeness to other employees from working in close proximity to them. In general, companies should focus on reducing the possibility of interruptions, the study showed - by reducing meetings, limiting mass emails, etc. Telecommuting is a way of reducing interruption and organizing communication. Microsoft’s 2010 study showed similar results. Sixty percent of the 3,600 U.S. workers polled said they felt more productive and efficient when working remotely, even though their employers are perceived to be less supportive of working from home policies.

Threat #2: Employers perceive security and data privacy is a big problem with telecommuters. This is because securing internal networks against outside intruders is difficult enough without having to worry about the fact that the head of accounting's home network administrator is her 10 year old son, "Timmy". Add to this that telecommuting employees can be anywhere by definition and employers worry about unanticipated data spills, stolen hardware, etc. The reality is that employers can adopt more secure rules and/or create a virtual environment for telecommuters that can increase security while maintaining the flexibility and appeal of telecommuting for employees. By developing specific telecommuting policies covering such things as disposal of paper records containing personal information, the use of "thin clients" and virtual private networks, prohibition of employees using computers or devices without approved security mechanisms installed, require home networks to have secure passwords installed, develop a prohibited list of software that may not be downloaded, etc.

Threat #3: Potential incremental taxation on companies that offer work from home arrangements for out of state employees is an unfortunate reality. While this is absurd, and would only seem to encourage employers to avoid running afoul of the law by restricting telecommuting to in-state employees or simply finding less expensive employees who are offhshore (i.e. non-U.S. based) who can do independent contractor work, a company called Telebright Software of Maryland was found liable for state taxes in New Jersey because a single employee works from home in NJ. On appeal the New Jersey appeals court found that Telebright was liable for New Jersey's Corporation Business Tax. New Jersey defines business as "activities occupying people's time or labor for profit".

The Bottom Line

Companies are losing money, wasting energy, and sacrificing employee happiness and productivity based on the fallacy that telecommuters are less productive. If companies allowed employees to telecommute a moderate amount (even just once a week), it could save tens of thousands to millions of dollars, depending on the number of employees. It could also reduce the company’s carbon footprint by cutting car trips by over 100,000 per year. Plus, it could make employees happier and more productive.