Feb. 27, 2013 at 8:31 PM ET
Maybe Yahoo should have done its homework before banning work-at-home.
For millions of American companies large and small, telecommuting has become a critical force in boosting worker productivity and growing profits in the information age.
Take the case of Dallas-based Ryan, LLC, the seventh largest corporate tax services firm in the U.S., with more than 900 employees in 45 locations in the U.S., Canada and the U.K. In August 2008, the company realized it had a problem. Voluntary turnover was roughly 20 percent. Some employees who quit said the long hours at the office left them little time for a personal life.
“We had a policy that required people to be physically present,” said Delta Emerson, the company’s chief of staff. “If you were not seen, you were questioned as to whether or not you were working.”
The solution: a flexible work schedule that allowed employees to work remotely and set their own hours. Though the transition had its bumps, the results were surprising.
Not only did the work all get done, the company became even more productive. Revenues went up. Client satisfaction went up. And turnover went down.
Emerson said the lesson was that there’s more to productivity than just showing up at the office. Ryan workers know that their job performance is now being measured on how much work they get done, not how reliably they show up at the office, she said.
“Everyone knows what they have to do to cut it,” said Emerson. “But people treasure this flexibility to the point that they will give their all to continue to work in an environment that allows that.”
By focusing more on measuring how well employees are doing their job, and worrying less about where the work gets done, companies with flexible work policies are seeing productivity go up, according to human resources experts.
That may be one more reason American companies are adopting flexible work policies. As of last year, nearly two-thirds of employers offered flexible work rules to at least some of their employees – up from about a third in 2005, according to a national study by the Society for Human Resource Management.
“We don’t see this trend going away,” said Michael Aitken, SHRM’s vice president of government affairs. "This is the way that work will get done in the future. I spend a great deal of time and energy in educating our members about the value that it offers.”
But old perceptions about the distractions of the home office persist. In her now widely-read memo explaining why Yahoo now forbids its employees to work from home, CEO Marissa Mayer explained that “speed and quality are often sacrificed when we work from home.”
The vast majority of companies who support flexible work practices, however, disagree. Employees who take advantage of telecommuting and other flexible policies often are more productive than if they worked only at the office, according to SHRM research. Some 97 percent of human resources managers at companies with those policies said that productivity is “the same or better” than with office-only work rules.
By skipping the travel time required to get to the office, telecommuting boosts the number of productive hours each employee can devote to work. In a 2010 study, American Consumer Institute economists Joseph Fuhr and Stephen Pociask calculated that roughly 1.7 trillion minutes are spent commuting every year – at a cost in lost work time and transportation expenses of roughly 7.2 percent of U.S. gross domestic product.
The economic benefits of expanding telecommuting could be huge. The authors estimate that, over 10 years, a 10 percent increase in telecommuting hours would save nearly $100 billion in lost time and expense.
We would all also breathe a little easier. Fuhr and Pociask calculated that by saving 4.4 billion gallons of gasoline, along with the energy savings from reduced office space, a 10 percent increase in hours worked form home over the next decade would reduce greenhouse gas emission by more than half a billion tons of carbon dioxide.
To be sure, not all occupations are well-suited to telecommuting. Waiters and barge pilots aren’t ever going to be very productive working from a home office. But as more occupations become tied to a computer screen for much of the day, it matters less where that screen is situated.
As many home office workers can attest, some work is better performed in a group setting – especially dull, menial tasks where the urge to goof-off and ready distractions are ever present.
That was also the conclusion of a 2012 study by economist Glenn Dutcher at the University of Innsbruck, who found that while telecommuting “has a positive impact on productivity of creative tasks” it has a “negative impact on productivity of dull tasks.” So if your job involves a lot of copying and collating, you’ll probably get more done chatting with co-workers while visiting the water cooler in the copy room.
Mayer also cited those kind of chance encounters in defense of her “everyone back to the office” mandate.
“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings,” she wrote.
But for every serendipitous encounter that sparks the creation of a winning new product, there are many hours wasted sitting in someone else’s unproductive meeting or listening to a cube neighbor justify their picks in the Oscars pool, said Aitken.
“(Telecommuting) allows for less interruption at the office,” he said. “No people swinging by and wanting to talk about what happened over the weekend.”
And while detractors argue that a home office present too many productivity-killing distractions, workers who telecommute are better able to juggle their work and home lives. That helps reduce absenteeism.
“I may want to go to a doctor’s appointment or pick up the dry cleaning or go to my son or daughter’s school play,” said Aitken. “Telecommuting allows that worker the peace of mind to be able to do the things they may need to do for their life side and still meet their work obligations.”
Supporters of flexible work policies say the key to making the transition work is the development of better ways to measure how well their employees are doing. Being the first in the parking lot in the morning and the last to leave at night usually has little to do with how much actual work gets done in between.
“We used to measure people based on hours worked, and the person who worked the most hours was like a hero,” said Emerson. “There was frequently no tie-in related to what else they had done. So people who put in the hours could get away with a lot. Now, we don’t even pay attention to hours anymore. We’re looking at results.”
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