Think Papers - Digital Infrastructure Report

Implications of the Remote Work Environment on Organizations and Employees
Susan M. Valdiserri,
IBM Adjunct Professor Of Leadership - 02/23/98
Introduction
Until a few years ago, most professionals commuted to their company's office location in order to perform their job functions. As information technology has become more prevalent in businesses, and as employees have become more comfortable using technology tools such as personal computers, electronic mail, video and teleconferencing, this practice has changed. Instead of employees spending valuable work time traveling to and from corporate and client offices, many companies are establishing the infrastructure and operations to support them working remotely, which includes: telecommuting 1, virtual workplaces 2, and mobility 3.
It is estimated that approximately 10% of the US workforce, or 11 million people telecommute. Industry analysts expect these numbers to grow 20% annually, so that by the year 2000, 20 million workers will telecommute. In addition to telecommuters, roughly 23% of the current US working population are mobile workers. This number is also expected to increase at a rate comparable to telecommuters. 4
Although the literature on remote work covers a wide range of topics, this paper focuses on: advantages and disadvantages of remote work for companies and their employees, organizational considerations to ensure remote work outcomes are successful, and remote work policy issues for the private and public sector.
Advantages and Disadvantages of Remote Work for Companies and Their Employees
Remote work environments have been around long enough to begin collecting information about the advantages and disadvantages for both the company and its remote employees.
Advantages
One advantage to remote work for companies is related to recruiting. Many companies use remote work as a perk to attract and retain top talent. In fact, some employees regard telecommuting as "an indirect raise." 5 Especially parents of young children, people with eldercare responsibilities and dual career families who find remote work attractive because flexibility in work schedules and shorter (or zero) travel times frees time for family activities and responsibilities.
Remote work also expands the labor pool. For example, relocation is not always necessary when changing jobs or companies. Therefore, companies are able to recruit talented employees outside of their corporate office's geographical boundaries. In addition, recruiting physically challenged employees may become easier since telework eliminates the commuting barriers.
Employers who offer this alternative work arrangement have reported a 20% 6 increase in employee productivity due to less time spent commuting, less disruptions as a result of office politics, employees tailoring their work day according to peak productive times, and more continuous work time. Reduced absenteeism contributes to this productivity increase because remote employees are able to tailor their day to accommodate their work tasks and personal responsibilities. For example, a remote worker may start the work day an hour earlier because he/she has a 10 AM dentist appointment. In the traditional environment, the employee might have gone directly to the dentist from home without going into the office, thereby losing an hour or two of productive work. Or a remote employee suffering from a minor ailment such as a cold is likely to continue performing his/her job functions at home. In the traditional work environment, the employee might have called in sick to avoid infecting his/her co-workers.
Another advantage is the ability for companies to provide 24 hour customer support. Customer Service Reps (CSR's) can be equipped to take calls from home regardless of the company's walk-in office hours. Furthermore, companies are able to provide local, on-site support for geographically dispersed customers by allowing employees to live and work near their clients despite the company's home office location.
A fourth advantage to remote work is cost reduction. The amount of formal office space and associated furniture and other equipment is less because employees can share workspace when visiting the home office. In addition, relocation costs, estimated at $80,000 per employee , 7 can be avoided if employees are not required to move to be co-located with the job, but rather are allowed to perform the job task from their current home location. And business travel and commuting costs are also less since employees are equipped to work electronically with teammates, thereby requiring fewer face-to-face meetings.
Disadvantages
The estimates and predictions concerning telecommuting and mobility cited earlier, indicate an increase in the popularity of remote work. Although there are clear benefits to transition to this new work mode, several disadvantages have also been reported.
First, employees are prone to work longer hours than non-remote employees because they are reachable (electronic mail, paging, cellular phones and voice mail) anywhere, anytime by colleagues, managers and clients. It has been argued that employees working longer hours is the factor that contributes to the 20% rise in employee productivity discussed earlier. Regardless of the factors, the company benefits from this increased productivity, whereas longer work hours may infringe upon the employee's personal time. Therefore, it is imperative that remote employees explicitly define and adhere to their job and home life rules and routines so that work doesn't interfere with family and other personal time.
Employees also cite reduced human contact as another disadvantage to working remotely. It can lead to feelings of loneliness and isolation because the social aspect of the work- place arising out of face-to-face interaction is missing. Additionally, important non-verbal cues are absent when using electronic communication as an alternative to face-to-face interaction. For example, misinterpretation of electronic text can occur when people attempt to add personality to the factual content of their electronic mail. In addition, people who leave incomplete or rambling voice mail messages, or are delinquent in returning messages, can leave a negative impression, or even convey incompetence or laziness. This type of miscommunication can degrade work relationships. Furthermore, as a result of reduced human contact, employees lose the benefit of hearing company and industry information from colleagues in the office. Instead, employees have to put forth more effort to stay current with the latest corporate news.
A third disadvantage to remote work is a manager's tendency to over-supervise employees they do not see regularly. To compensate for limited, in person contact, some managers require their employees to submit proof of performance and written status reports as a way to monitor work hours and tasks, and to measure performance. Not only can this send an underlying message of mistrust to employees, but detailed documentation of job activities adds an unnecessary burden to employees' already full work load.
Another disadvantage is the potential for a remote employee's career to stall. Employees who are unable to interact face to face with their manager may be overlooked for the promotions or high visibility assignments that eventually lead to senior level positions. Some employees are concerned that their company might think they are less committed to hard work if they telecommute, therefore they are reluctant to participate in a remote work program. 8
Finally, many employees are concerned that the real estate and facility benefits that the company receives as a result of remote work translates into an increase in an employee's home facility costs. For example, the work at home employee has to keep the furnace and air conditioning running for longer periods in the day. In addition, there is an increase in electricity usage for typical home items such as lighting, heating and cooling, as well as new electricity charges for powering home office equipment. Unfortunately, employees using their home as their office do not typically get tax breaks to offset these additional costs.
Organizational Considerations for Implementing a Remote Work Environment
Companies preparing to offer employees a remote work option should take into account technical, management and training issues.
Technically, the company should evaluate which information technology tools and applications employees will need to perform their work remotely. These may include a laptop computer, cellular phone, pager, and speaker phone. Companies should also consider collaborative applications such as GroupWare 9, the Intranet 10 and distance learning 11. These software tools help to:

Facilitate teamwork among virtual teams.

Provide remote workers with readily accessible corporate and industry information.

Increase internal and external communication with employees and clients.

Enhance employees' skills while keeping travel time and costs down.

From a management perspective, managing from a distance should not be much different than managing remotely. That is, managers set expectations, monitor progress, provide feedback, and perform administrative functions. However, managers may have to enhance other important leadership skills such as trust, empowerment and open communication. For example, if a manager suggests that his or her team participate in an important conference call, he or she should trust that the team will be on the call, and then not fret when an employee fails to attend. It is the manager's job to inform the team of the event, and to trust that the employee will participate or take the necessary actions to understand what he or she missed. In a remote environment, a manager's focus shifts from management by observation to management by objectives and results. That is, the quality, quantity and timeliness of the project are more important than the process the employee used to complete the project.
Another important management focus in a remote work environment is communication. There is limited opportunity for spontaneous, face-to-face team and individual interaction, therefore communication has to be planned and deliberate. Managers can schedule weekly conference calls to give team members an opportunity to provide each other with project status. Frequent calls between manager and employee should also take place to discuss project, performance and other remote work related issues. In addition, managers should come up with creative methods to congratulate employees on a job well done since there is less opportunity for in-person "pats on the back." One example is to send congratulatory flowers or candy to the remote employee's home. These types of actions help remote employees feel that they are an integral part of the team and corporation.
In addition to technical and management considerations, companies offering remote work options should provide training for employees and managers. Topics might include: how to use information technology tools such as the laptop computer, electronic mail, and GroupWare, how and when to use video or teleconferencing to successfully facilitate remote meetings, how to lead virtual teams/projects, how to effectively communicate electronically, etc. These topics are important in order to minimize work interruptions due to technical problems, and to ensure electronic communication is clear and efficient.
Policy Considerations for Companies
Companies embarking on remote work options should evaluate current corporate employment policies to identify those that should change, and to determine if new ones should be added. The following list is a sample of items that companies should address in their remote work policies:

Employee salary, benefits, and employer-sponsored insurance coverage. Typically, remote work will not affect these.

Liability for job-related accidents. An employee's remote work space is an extension of the organization's work space, therefore, this policy will probably not change. However, some companies may want to implement home inspections to ensure remote workers are working in a safe and secure environment.

Equipment and other remote work related costs such as: computers, fax machines, pagers, telephones, phone lines, Internet access, supplies, etc. Companies will have to decide which costs are reimbursable.

Using company owned equipment for personal use.

Type of hardware, software and Internet access remote employees will use.

Confidentiality and security of company owned documents and equipment assets. This includes security codes, passwords, dial-up access information and userIDs.

Liability for loss, damage or wear of employee owned equipment used for work.

Conditions under which participants are offered (and also removed from) a remote work program.

Remote workers' conditions of employment with the organization. Typically this policy would not change.

Training required to be approved for remote work.

Along with remote work policies, companies should provide employees with general guidelines for working remotely. These guidelines might cover: setting up a home office space to maximize efficiency, reporting technical problems and receiving technical support, using the appropriate technology for the work situation (e.g., teleconference vs. video conference,) and providing leadership in a remote environment. Organizations should consider documenting this information in an employee reference manual, as well as providing regular communiqués regarding remote work news and issues.
Policy Implications for the Public Sector
The remote work benefits, issues and policy implications previously discussed for the private sector, are also applicable to the public sector. However, the reasons for the public sector to offer remote work options for its employees, and to embrace a remote work society are broader because they address issues that affect all citizens such as government funding and customer service. The public sector is in a unique position to model remote work alternatives for the private sector and communities because of its visibility and reach. Yet, very few government employees work remotely. In fact, it is estimated that today, only 3000-4000 Federal employees are involved in telecommuting programs. 12
A National Telecommuting Initiative is currently underway to expand government's use of remote work options. The focus of the initiative is to use remote work as one way to address the challenges of: limited government funding, customer service, employee needs, energy consumption, air quality and global warming, and traffic congestion and safety.
The following brief descriptions represent how government views remote work (specifically telecommuting) as addressing these challenges. These excerpts are taken from the National Telecommuting Initiative Action Plan: 13
Limited Funding:
Telecommuting can help ease the burden of budget deficits by reducing the amount of real estate needed for work space, increasing employee productivity, and streamlining planning. Customer Service: Telecommuting allows government to better serve citizens through co-location of customer services in multi-purpose US General Store centers, enabling inspectors to work in the field more closely with people.
Employee Needs:
Changing social values and more diverse and flexible life-styles have an impact on the workplace. Two and three hour daily commutes added to an eight-hour workday impact family relationships.
Energy Consumption:
Telecommuting reduces gas-intensive commutes, and energy consumption in commercial buildings (due to less office space required for remote employees.) Government can be a leader in reducing both by offering its employees a telecommuting option. Air Quality and Global Warming: Transportation is a major contributor to the air pollution problem in most urban areas, and will be the fastest growing source of carbon dioxide emissions through the year 2000. Telecommuting can help reduce the demand for transportation and move toward cleaner air and less global warming in the future. Some states have already adopted a policy requiring a certain percentage of a company's workforce to carpool or telecommute to reduce pollution. Companies that don't comply incur a fine.
Traffic Congestion and Safety:
Telecommuting is seen as a way to manage travel demands, thereby reducing congestion and meeting national air quality goals. Telecommuters also lower their risk of injury and death by reducing the amount of time spent in rush-hour traffic.
In addition to addressing these challenges, the tax implications for remote workers should also be re-examined. Currently, few tax benefits exist for employees taking advantage of a company's mobility or telework programs. Policies could take the form of tax breaks for companies that offer remote work alternatives, and/or tax credits for telecommuters to offset any increase in costs incurred as a result of working from home.
Conclusion
The widespread use and acceptance of technology in society makes remote work viable and appealing. There are clear advantages to this alternative work arrangement, but as with anything new, there are challenges. Some of these challenges can be overcome within an organization so that remote work programs can be widened to include more employees. Remote programs will eventually expand to include more organizations within the private and public sectors, as more examples of successful implementations are publicized and shared. While remote work does not necessarily present unique challenges which require new policies, current policies should be reviewed to optimize the success of this new work environment for employees, companies, government and citizens.
Additional References
Cohen, S & Malhotra, Y., "Virtual Corporations, Human Issues & Information Technology," WWW Document, URL: http://www.brint.com/interview/astdint.htm.
Morris, B., "Home-Office Heaven--And Hell," Fortune, 3/97, http://pathfinder.com/fortune/1997/970317/fam2.html.
Fryer, B., "Home Work", Working Woman, V22, 1997: 59-60.
Handy, C., "Trust and the Virtual Organization", Harvard Business Review, 1995: 40-50.
IBM Public Affairs Papers accessible via the web: http://www.ibm.com/ibm/publicaffairs/index.html.

Understanding The Global Information Infrastructure

Protecting Privacy and Securing Data

Assuring Access for All

Making Electronic Commerce Work

Protecting our Health and Safety

Rethinking Government

Achieving Educational Equity with Advanced Technology

A New Vision for the Utility and Energy Services Industry

Reducing Uncertainty in our Health Care

Banking in the Network Economy

How Network Computing is Changing Industrial Processes

How Travel & Transportation will Change in a Networked World

A Global Cryptographic Policy Framework

Transforming Developing Countries with Network Computing

Transforming Higher Education

Understanding Internet Content Principles

IBM Leadership Development, The Remote and Mobile Sourcebook, 1997
Association for Commuter Transportation (ACT) - http://fimat.cob.fsu.edu/act.htm
AT&T Telework Guide - http://www.att.com/telework/
Environmental Protection Agency (EPA) - http://www.epa.gov/docs/Government.html
EPA Internet Links - http://www.epa.gov/docs/Internet.html
FedWorld - http://www.fedworld.gov
General Services Administration - Center for Information Technology Implementation - http://www.gsa.gov/et/fic-firs/fic.htm
TAC - The International Telework Association - http://www.telecommute.org/
The Telecommuting Archive - http://www.eff.org:80/pub/EFF/Policy/OP/Telecommuting/
Valley Metro-Telecommuting Info (Phoenix, AZ) - http://www.maricopa.gov/rpta/telecom.html

1 Employees working out of a home office.
2 Locations (other than a company's home office site) in which work activities are carried out using information technology tools such as laptop computers, electronic mail, voice mail, teleconferencing, and video conferencing.
3 Employees in transit, that is, employees who don't work from a set location at a set time.
4 http://www.infographex.com/langhoff/gaqs.html, FAQs about Telecommuting
5 ibid
6 Buhler P, Managing your Career: No Longer Your Company is Responsible, Supervision, 1997 (V58) 24-26
7 http://www.infographex.com/langhoff/gaqs.html, FAQs about Telecommuting
8 Ibid
9 GroupWare is anetwork application that provides team members with electronic space to store documents, reports, graphics, memos, etc. Teams can also engage in discussions and decision making in the electronic space.
10 Corporate Web servers made available to employees via an internal network or dial up access. Employees access corporate databases, documents, and other information via a Web browser.
11 Any approach to education delivery that does not require a student to be present in the classroom in order to participate in the instruction. It replaces the same-time, same-place, face-to-face environment of a traditional classroom.
12 http://www.gsa.gov/pbs/owi/action2.htm, National Telecommuting Initiative Action Plan, - Executive Summary.
13 http://www.gsa.gov/pbs/owi/action2.htm, National Telecommuting Initiative Action Plan, - Executive Summary.
14 Accessible, one-stop service center providing services such as: income tax filling, post office services, social security, housing and children assistance, and kiosk information options.