GDP Blog

What If Your Employees Could Be 55% More Productive?

Posted by John Powter

Mar 31, 2014 8:11:00 AM

TelecommuterTelecommuting is the term for working from a remote location, usually an employee’s residence. Workers who telecommute are typically connected to their employers and company servers via the Internet and are able to communicate regularly in real time using email, instant messaging, webcams and conference calls. Telecommuting can range from working exclusively from a home office to only working at home a few hours every week.

History and Prevalence

The term “telecommuting” was coined in the early 1970s by a University of Southern California professor researching communication and transportation. Companies and government offices began seriously promoting the idea later that decade during the energy crisis.

Technological innovation allowed telecommuting to increase over the next three decades. By 2011, data collected by the U.S. Bureau of Labor statistics showed that 24 percent of employed Americans worked from home on a weekly basis. Another survey by Global Workplace Analytics showed that the rate of telecommuting had increased 73 percent since 2005, and that 2.5 percent of the non-self-employed workforce (roughly 3 million people) primarily works from home.

But while the overall usage of telecommuting has steadily increased, many companies have chosen not to adopt it, and some have chosen to push back. In 2013, Yahoo! CEO Melissa Meyer prohibited telecommuting in her offices, where it had been established company policy. Yahoo’s shift in policy highlighted some of the downfalls of this way of conducting business.

Pro and Cons

Telecommuting brings advantages and disadvantages to the way companies do business. Here’s a look at some of them.

Pro: Increased productivity. While it’s easy to imagine workers shirking their duties at home more readily than in the office, numerous studies show that workers who telecommute are 15 to 55 percent more productive. Two-thirds of employers report increased productivity among their telecommuters.

Additionally, AT&T reports that employees work an extra five hours per week when telecommuting versus when they are at the office, and Sun Microsystems data shows that employees spend 60 percent of the time they would have used commuting working for the company.

Pro: Fewer costs. Over half of all employers reported cost savings as a significant benefit to telecommuting. By allowing workers to telecommute, companies reported big savings on real estate, absenteeism and relocation costs.

In many areas there are also grants and other financial incentives for companies that offer telecommuting. 

Pro: Increased employer flexibility. Telecommuting gives employers the option to hire from across the country without worrying about relocating workers to a central location. Employers can also more readily hire part-time, semi-retired, disabled or homebound workers.

Pro: Healthier employees. Telecommuting relieves the stress caused by commuting and other issues related to the workplace or being away from home. Telecommuters eat healthier and exercise more than their office-bound counterparts, and are less likely to get sick from contagious germs.

Con: Disengagement. Many employers say that telecommuting interferes negatively with the relationship between workers and management, and can foster jealousy and rivalries between telecommuters and non-telecommuters. Staying connected and supervising employees who work from home can also be a challenge for managers.

Con: Lack of collaboration. Innovation can be stifled when workers are not physically interacting with each other. This is the main reason cited by Meyer for the discontinuation of Yahoo’s telecommuting policy.

Con: Technology and security concerns. Not all employees are tech-savvy, and there can be problems trying to remotely access an office network or set up remote meetings. Sensitive company information carries the potential for greater risk of being compromised through unsecure home computers. Additionally, 59 percent of telecommuters do not use their company’s data backup system, risking the loss of hard work and valuable information.

Con: Wasted downtime. Capitalizing on lulls in job tasks between big projects is more difficult to manage when an employee is working from home than when he or she is in the office

Legal Issues

In addition to the strengths and weaknesses of telecommuting, employers must recognize legal issues associated with it before deciding whether it is right for them. The following are legal issues that may need to be addressed.

Property

Make sure you have a clearly stated company policy for employees who are issued company electronics that addresses what to do in the event they are lost, damaged or stolen. Consider insuring more expensive items.

One way to handle company property issues is to have a written policy in place. If you are issuing electronics to your employees, have them sign something that acknowledges their receipt of the equipment, and indicates who is responsible for maintenance and damages.

Employees should be made aware of their privacy rights when working from home. Just because work is being performed on a home computer doesn't mean that it's exempt from being monitored or inspected by the employer. Though the location may be personal, employees are still acting under the scope of employment.

Security and confidentially

Security concerns arise with workers accessing company information from their home computers. One way to guard against intentional leaking is to require that telecommuters sign a nondisclosure agreement. Have your company outline security measures employees should follow to protect information on their computer from exposure to external forces.

Payroll records and compensation

Telecommuting presents difficulties for employers in complying with hourly recordkeeping regulations.Employers with telecommuters should set up a way to track those hours and ensure their accuracy.

Similarly, federal rules on overtime and rest and meal breaks apply to telecommuters as much as they do to employees in the workplace. This makes an employer’s obligation to track employee hours especially important.

Employer liability

What happens if an employee slips and falls at home, while on the clock? Or what if an employee commits a crime in the scope of his or her employment while telecommuting? What about workers' compensation?

Employer liability remains a considerable concern for telecommuting employees. For starters, you should have a specific policy in place to address work-related injuries or torts that occur at a telecommuting employee's home office.

Telecommuting is not the right fit for every company, but it has a decades-old record of being positive for many organizations. As the business world becomes more ensconced online than ever before, and a younger, more Internet-connected generation moves up the ranks of the workforce, telecommuting may become far more common than it is today. At the same time, there may never be a proper substitute for a centrally located office and face-to-face meetings.

Before your company decides to embrace telecommuting in the future, you must carefully weigh the risks and benefits of instituting a telecommuting policy to ensure it will be an asset to your organization.

If you do offer telecommuting as an option, make sure you address these emerging risks and create a plan to connect the employee with the office they are working with.

We can help design a proactive plan to be able to accomplish the productivity goals and minimize the risks associated with telecommuting. Schedule a meeting with one of our advisors by clicking here.

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Topics: Risk Management

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