Should the Government Incentivize Telecommuting?
by Judd WileyJune 2nd, 2008, 5:38 pm
Did you know that the government supports and incentivizes telecommuting?
Grants. Tax incentives. Counseling. Research. Prepared talking points. All for businesses that allow their employees to work from home.
A lot of it has gone unnoticed over the years. But as oil prices increase, we’re going to start hearing more and more about the benefits of telecommuting and why our tax dollars should support it.
Before we go any further, let’s define the terms … “Telecommuting” … “Teleworking” … Both mean the same thing – working from home while remaining connected to your employer via phone, fax, email, chat, Internet, video conference, etc.
The talking points in favor of telecommuting break down into three groups:
- Benefits to employers such as cost savings, increased productivity and motivation, employee retention, organizational flexibility, flexible staffing, and resilience in the face of external disruptions (i.e. the power goes out in DC where the main office is, but the telecommuters in Virginia soldier on).
- Benefits to individuals such as reduced travel time and costs, improved work opportunities (based on employee location), less disruption to family life, better balance of work and family life, the ability to participate in local community events, and flexible hours.
- Benefits to society such as reduced traffic congestion, reduced pollution, greater employment opportunities for areas further away from major economic hubs, and greater access to employment for the disabled.
The federal government agrees. In 2001, the Environmental Protection Agency and the Department of Transportation joined forces to create the Best Workplaces for Commuters program, which uses tax money to “promote innovative solutions to commuting challenges faced by employers and employees.” The program “provided the tools, guidance, and promotional opportunities necessary to help U.S. employers of any size incorporate commuter benefits into their standard benefits plan, reap financial benefits, and gain national recognition.” In October 2007, the University of South Florida’s Center for Urban Transportation Research (CUTR) assumed program management responsibilities.
State governments agree as well. The Virginia Department of Rail and Public Transportation funds something called “Telework VA!” which pays up to $35,000 over two years to businesses that start or expand telework programs. According to the website, “When you’re ready to start a program, our E-Learning Tools will help simplify the process. And when your new telework program requires you to pay for something, we’ll offer up to $35,000 to help get you started!” Telework VA! also provides an extensive list of talking points on “how to sell a telework program to your boss,” i.e how to pressure your boss to let you work from home. Quite a nice little service, actually!
Then there’s Oregon, which offers financial incentives “to encourage the reduction of drive-alone vehicle miles” including tax credits of 35% for investments made in telework (i.e. the costs of purchasing and installing office and computer equipment) and eligibility for vouchers at local stores. Oregon’s Energy Telework/Telecommuting Program also offers “presentations and consultations on making your telecommuting program in Oregon successful” such as on-site training for supervisors and employees, and instructional publications and videos for CEOs, managers, and staff. All paid for by the taxpayers.
Let’s stop just long enough to ask ourselves the following: Why is any of this the government’s business?
Why does the EPA and DOT need to fund some organization that promotes telecommuting? Why does Virginia need to give $35,000 to companies that adopt teleworking programs? Why does Oregon need to give tax credits and vouchers to businesses that invest in telecommuting equipment? Why do we need to pay salaries, benefits, and pensions to the government workers who run all of this?
Why can’t we let companies come to these conclusions on their own? If telecommuting is the smart, profitable way to do business, you’ll see more companies telecommuting. You’ll see McKinsey letting its consultants work from home every day. You’ll see Goldman Sachs setting up home offices for its investment bankers. You’ll see Skadden Arps incentivizing its lawyers to not come to work.
Why don’t you see any of this?
Maybe it’s because telecommuting has never been conclusively proven to provide a net benefit. Maybe it’s because business owners don’t want their employees sitting at home watching soap operas, taking naps, trolling MySpace, downloading porno, skipping off to “community events,” immersing themselves in spy novels, or simply lying around doing nothing. Maybe it’s because successful management requires oversight, face-to-face interaction, and in-the-flesh meetings.
Either way, why is any of this the government’s business? Why the involvement? Why the expenditure of tax dollars?
Posted in Government Workers, Spending, Telecommuting, Traffic Congestion |
If you manage a company, you have to be crazy to let your employees work from home.
And let me tell you something about videoconferencing. IT IS A VERY BAD WAY TO HOLD A MEETING. The thing usually doesn’t work, and takes 10 minutes to fix while everyone is sitting around. Plus because of the time delay people are always talking over each other. Also you never know who’s in the room but not on the screen, so you have to watch what you say. Plus it can be very expensive.
My company is old school. At your desk by 8, leave by 5. Open office space so people can easily talk to each other as issues arise. Much more productive than if I was to let my employees work from home. I can GUARANTEE you that they’d be doing exactly what you mention above. Especially the ones in their 20s.
Our taxes should DEFINITELY not support any govt efforts to push U.S. businesses toward telecommuting. Talk about govt interference in the market!
Love this blog, keep it up guys
If you manage a company you’d have to be crazy, or perhaps just ill-informed, NOT to let your employees telecommute. Unless you’re business is long-haul trucking, construction, or baseball.
Study after study has shown that telecommuters are more productive, more satisfied with their jobs, and are less likely to look for jobs elsewhere. They’ll even take telecommuting over a raise. We’ve looked at over 250 studies, by the way, and thems da facts.
Managers resist the idea of telecommuting because they confuse process with product, they mistake a warm body in a desk chair for work being done.
A results oriented work environment has proven to be hugely more effective. Once you’ve clearly defined the desired result, where and when the work gets done is a secondary issue for the company.
Sure, some companies have seem to have an edifice complex, and think the building defines the business like clothes define the man. But telework can make a real bottom line impact because you can reduce real-estate cost. We talked to a company recently, for example, that is renting 1,000,000 square feet of space because their employees are telecommuting now.
On the other hand, where the work gets done is an important issue for a commuter who’d really rather not waste 2 hours and 20 minutes every work day (about two work weeks a year) of their life (right Jedd?).
In fact, the studies show that many people spend more time working when they work from home, more than just the recovered commute time in some cases. AND they still report their work/life balance improves when they work from home, even when they put in more time.
What’s more, if they telecommute, they can find a less expensive and more attractive place to live—that real estate thing again—which makes them happier too. (That works the other way around too…employers can hire from a much larger population, a real consideration if you business happens to be in the armpit of the nation.)
So why should the government care? Because they don’t have the money or the geography to build more roads to help reduce the time wasted on the highway, for one. They also care because in the event of a disaster (earthquake, epidemic, terrorism) their community has to continue operating, something businesses need to think about too. Another reason government cares is because we could significantly reduce our dependence on foreign oil if more of those people who could telecommute did.
In fact, the federal government has been mandated by Congress to ensure that any government worker that can work from home does. That’s not widely known, and not widely implemented; but a number of Congressmen are working to put teeth in the mandate. When they do that means your commute will be shorter.
But then maybe you should ask yourself why YOU’RE commuting. Remember, work is something you do, not someplace you go.
Judd, the government has been a source of information for all kinds of things for many years and we count on them to continue that practice .. the FDA, the Surgeon General, Health Dept, EPA, and Consumer Protection to name just a few. So why wouldn’t the government be informing and/or promoting good practices for its citizens, rather than just waiting for people to stumble upon them?
There are undisputable facts associated with teleworking. FACT: those employees that don’t drive to work everyday are helping to conserve the nation’s supply of gasoline. FACT: those employees that don’t drive to work everyday emit less pollution into the atmosphere. FACT: with less commuters on the road, we have less need to expand our roadways and build parking structures which results in less tax dollars to support these infrastructure needs.
Open your eyes and you will see many organizations now that allow their employees to work from home; the upward trend in teleworking is indisputable. Obviously not every organization has discovered its benefits, or enjoys open-minded managers who manage by results. So the government needs to be asking it citizens and businesses and itself: How many employees in the workplace spend the majority of their time behind a computer? And how many of them could be doing that anywhere? There is nothing magical about strapping yourself in a metal box and driving to work just to sit behind a computer. As for interaction with co-workers, how often do you send the person down the hall an email rather than engage in an in-person conversation? Be truthful … those encounters are a whole lot less than you let on. Being able to see someone at the desk is just a way to appease a paranoid supervisor, not the way to ensure an effective or efficient worker.
In case you elitists haven’t noticed, gasoline is $4/gallon and it isn’t getting cheaper. A lot of working class Americans already are starting to not be able to afford to get to the jobs they require to keep their vehicles running and pay their mortgages. They’re not going to be able to just jump in to a new job and a new home next week. If a little push from the government makes it more feasible for these people to work at home, save some gas money and keep our roads less congested in the process — and if it works for the business owners who care to take advantage of it — by all means, why not. Sounds like good government to me. At any rate, this program is small potatoes.
If you want to single out a stupid govt intervention, take a look at the massive tax breaks people are still getting for driving around in SUV’s aka “light trucks.
Telecommuting is the future of US business. A lot of Americans are not going to be driving and flying in the coming years. That’ll be a luxury.
Tom,
Thanks for your comment. You make some excellent points. Your blog is quite interesting, and I recommend our readers to take a look at some of your posts.
Here’s my main problem with your argument: If telecommuting is such a fundamentally better way of doing business, why don’t more companies adopt it as their standard operating model?
I get the concept that some managers are constrained by their preconceived notions of what a productive work environment is.
But if you’re right, the visible benefits of telecommuting will trump these old fashioned views. You’ll see examples of prominent businesses large and small heading rapidly toward the telecommuting model. Others will follow.
What is keeping them from doing this now? Could it be that these businesses have considered the arguments for and against telecommuting, and decided against it?
If so, why should we be giving tax money to incentivize these companies to do something that they wouldn’t do on their own? We’re simply stacking the deck toward telecommuting, just because we think it would be better.
My view is – Let the free market sort it out. If the telecommuting model is the way to go, a large number of companies will start moving toward it, and we won’t need any government incentives, and therefore no tax dollar expenditures.
That way, we’ll know for sure that telecommuting is the superior operating model.
What do you think?
Because it’s a very new idea, Judd and because employers, for the most part, don’t bear the cost of their employees’ commutes, and because lots of business managers are scared, conservative and not willing to try new things til they are proven to work. They have a lot to lose if it doesn’t work. Government can help us figure out if this is desirable policy by bearing some of the risk to help get it off the ground.
Big companies in the UK are already moving fast towards this model, such as British Telecom. All studies show that working from home is more productive, gives a better life/work balance, and is more eco-friendly. Studies also show that flexible working practises are becoming very important among younger people entering the job market - to hold onto the best brains, companies will need to deal with this and deal with it fast.
The idea for telecommuting goes back to NASA in the 1970s (not that they’re any paragon of good management, sadly), and real interest began to develop in the late ’90s. There’s a ground swell of adoption now with broadband as the catalyst, and even more so lately with energy issues adding further stimulus.
Every call to Jet Blue goes to someone at home, they don’t even have a call center. Even McDonald’s is experimenting with using happy people at home to take orders from the drive-through box—they key it in, and the register around the corner (and across the country) displays it for the surly minority at the window.
Only about 4% of the people who could telecommute do, however, so you’re right. There’s a long way to go to reach the estimated 40% of workers who could.
We think this new way of doing business been slow to arrive largely because the so many people are still caught in a sweat shop mentality and think that management by walking around is a good idea. It’s not, all you’ve done is interrupt and by-passed layers of management who’s job is to synthesize for you what’s going on so you don’t have to.
Besides management inertia there have been other reasons companies have moved slowly—security and privacy issues, for example. Over 70% of medical transcriptionists work at home (some even overseas), and protecting patient’s medical information, of course, is crucial. (Not that that prevented a local hospital from sending us a bill recently for a named someone else’s breast augmentation surgery.)
But big companies like IBM and Cisco and Avaya are adopting telecommuting in a major way. IBM reported $40 million in savings way back in 1994 from their FlexiWork program. Today 80,000 (26%) of IBM’s employees telecommute at least once a week.
Anway, I think you missed my point about why government is involved. They’re not meddling in a free market, they’re trying to solve some serious problems. Some that may actually have reached the tipping point. Highways and related infrastructure, for one. There are those that make a well reasoned argument that we can’t even maintain what we have, much less catch up with demand for capacity and never will. Government is encouraging telecommuting because the only solution, if you can’t add capacity, is to reduce demand.
Capitalist -
But doesn’t the government bearing some of the risk for getting it off the ground distort whether it is truly desirable?
Once it does get up and running, what happens when the government pulls the plug, does it fall apart?
If not, why not let them get it up and running on their own? If so, why fund it?
Tom,
I agree that management by walking around isn’t a good model - or even management for that matter - but what about the scenario where you receive poor customer service?
I’ll give you an example - when I had cable hooked up, I had a huge customer service issue - basically they stood me up, and when I called to complain, the customer service rep hung up on me. (In DC our cable companies are abysmal.)
The next day I called a number I found on the Better Business Bureau website, and the manager I spoke to got real results - I had my cable hooked up promptly that evening and soeone called with an apology.
Now, if those people had been working from home, don’t you lose that ability to directly intervene - by that I mean go to someones desk, and “fix” the problem immediately before a problem spirals out of control?
I see some merit to your points, but I don’t know that I’m completely convinced that management shouldn’t be able to reach out and touch someone if they need to.
Well, actually, I don’t read anything in your example, Lewis, that required face to face contact—and I’d be willing to wager that there was none. It was probably all done by phone. Who cares if the person you’re talking to is in a dress-for-success outfit sitting in a desk chair in front of a monitor in a call center or wearing their jammies in their home office in front of an identical monitor?
That said, I sure can identify with your cable company experience. And telephone companies are just the same—maybe worse. Verizon actually told us they couldn’t handle an accounting problem for us over the phone, we had to come into a store. A phone company hasn’t figured out how to do business over the phone?!
And since I’m ranting here, the BBB is one of my favorite companies to hate. Their strong arm tactics, threatening damnation if you don’t join, really rubs me the wrong way. Hell, I’d have turned the San Diego office into the Better Business Bureau if that wasn’t recursive in an odd way. Actually, the telecommunication commission and FTC—or even just the threat of going to them—often gets instant results.
Lewis, far as I know the government incentives are not welfare checks, but one time incentives and conscious raising efforts. But I may be wrong. Maybe someone from one of the involved government agencies can respond?
“In my 10 years as a CIO, I’ve strongly believed that productivity is optimized when everyone meets and works in close physical proximity. That way, teams get the benefit of being able to brainstorm in person, respond to urgent issues as a group and build trust among one another. I didn’t think telecommuting was right for IT departments.
This article is my official about-face on telecommuting and flexible work arrangements. A variety of factors have changed my opinion on the best way to get work done.”
This is the introduction by [obvious underachiever] John D. Halamka, MD, MS, is Chief Information Officer of the CareGroup Health System, Chief Information Officer and Dean for Technology at Harvard Medical School, Chairman of the New England Health Electronic Data Interchange Network (NEHEN), CEO of MA-SHARE (the Regional Health Information Organization), Chair of the US Healthcare Information Technology Standards Panel (HITSP), and a practicing Emergency Physician.
The rest of the article is at http://tinyurl.com/6a3656. Doesn’t address the gummint involvement issue, but makes a good case for telecommuting.
P.S.
McKinsey, Goldman Sacks, and Skadden Arps all have telecommuting policies. One of the Skadden Arps people writes: “The telecommuting technology helps to make the [crushing] hours much easier to deal with because it enables attorneys to control how/where assignments are completed.”
PPS
I was doing some more research for a book we’re writing and came across the fact that 84 of the Fortune 100 Best Companies To Work For 2008 (those that allow employees to telecommute or work at home at least 20% of the time), these 10 have the highest percentage of telecommuters.
Cisco Systems 70%
eBay 48%
Booz Allen Hamilton 34%
S.C. Johnson & Son 32%
American Fidelity Assurance 30%
Shared Technologies 26%
Principal Financial Group 23%
Goldman Sachs 22%
Yahoo 20%
Qualcomm 18%
all of you are missing the more important point: that offices are hazardous, life-threatening environments, as evidenced by this video clip here: http://www.break.com/index/office-worker-goes-absolutely-insane.html
Tom,
All the companies you mention established their reputations in office environments. They had well-defined corporate cultures BEFORE they adopted telecommuting. It makes sense that their employees would be just as productive if they were allowed to telecommute, because they’re essentially extending their pre-existing corporate culture to their homes. Plus, they have to measure up against their colleagues, the majority of whom are located in the office.
What happens, however, in the case of a new business without a well-defined corporate culture that decides to adopt telecommuting as its operating model from day one (perhaps because of government incentives)? I’d be interested to know how successful such a business would be.
Do you have any examples of new businesses (let’s say 100+ employees) that adopted telecommuting from the very beginning and were successful?
This is a fascinating topic. Thanks for your comments.
I mentioned Jet Blue, the airlines, earlier. The ±265 people who answer the phones all work from home in locations all over the country, and they have from day one. Lowest turnover of any “call center” in the country. They almost had to let on lady go because her cow mooing cracked up callers and slowed down the call handling rate. Moved the cow’s pen and solved the problem.
And there’s mySQL, the venture-funded company that’s behind one of the world’s most popular open source databases. 6,000,000 users, and 40,000 downloads a day. The three founders were in Finland, UK, and US. First 10 employees were in 7 countries. Today they have employees on every continent except Antarctica and in 26 countries. They get together quarterly (virtually, of course) for a sports day. Everyone gets a paid day off, each photographs the sport the play, and share the pictures online.
sfx: Twilight Zone theme plays in background
I find the various points of view very interesting. What I’m seeing in some of them, however, is basic failure to connect a few important dots on why the “state of teleworking” is where it is. In my opinion, we aren’t far enough along in the business culture change. When I was in college, there were no classes that provided in-depth instruction on how to manage professional employees or remote workers; how to measure the performance of employees who were paid to “think” instead of implement; and how to measure outcome rather than output. I have been through managerial and executive training three times, including private sector and government — and it was all about guidelines for managing and evaluating hourly or low level salary employees. That might be fine for some companies, and needed for entry level employees, but it just doesn’t work for most experienced professionals and information workers. And it sure won’t work with the upcoming generations. As a result of this management pre-disposition, telework can never achieve its potential as a business tool without retraining management and re-thinking outdated management mind sets, where appropriate. Incentives and education can assist in doing that when evolution isn’t fast enough to address some important societal issues. I think we can all agree, however, that every business is not a candidate for teleworking, nor is every work team, nor is every job.
Look at transportation funding as one of the dots with many connections. We can hardly afford to adequately maintain and preserve the existing infrastructure, much less expand it to meet the demands from ever increasing urban sprawl, population growth and economic expansion. Think about what dependable transportation means to our ability to attract high caibre employees needed to compete in the global marketplace, and to sustain our economic vitality and personal quality of life. What happens when it deteriorates? If 50% of the “eligible (key criteria)” workforce would telework one or two days a week, how many tax dollars and personal discretionary dollars would that save in the cost of congestion — i.e., highway maintenance, incident management, police enforcement, capacity increases, etc. that could be reinvested in maintaining the infrastructure. How much of your health care cost can be attributed to the increased incidence of diseases aggravated by emissions from vehicle trips, driving and traffic accidents? What is the cost of lost productivity as a result? Whether it is business expense or government expense, it ultimately comes out of a taxpayer’s pocket. There are probably a dozen other examples that can be connected to the pain and drain in your wallet.
Our early evaluation of using an incentive to encourage businesses to establish a formal, pilot telework program shows a significant ipercentage increase in the number of teleworkers within the company after two years, and we anticipate that will continue to grow in those companies where teleworking can be effective. No matter how I look at it, any well planned, tested, implemented and evaluated telework incentive program can pay off in the long run — especially one that eliminates the trip entirely. If the ROI proves positive, invest in it; if not, kill it.
And yes, teleworking is not viable for every company.
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