Study: Telecommuting saves $10K per worker

Reduced absenteeism, higher productivity cited

Apparently the ability to telecommute is far more than just a convenience for employees. In a recent survey conducted by the Washington, DC-based International Telework Association and Council (ITAC), it was found that employees who telework can save their employers $10,006 each in reduced absenteeism and job-retention costs. (For more details on survey results, see the chart on p. 44.) Other key findings of the survey include:

• 54% of teleworkers said that they work the same or more hours on days when they work at home.

• When working at home, 47% of teleworkers said they are more productive than when they work at their conventional location.

• 80% of teleworkers indicated that they have had to take time during the normal workday for doctor or dentist appointments.

• 55% of teleworkers said they are more satisfied with their jobs after starting to work at home than they were before.

A growing field

ITAC is a 501C3 nonprofit association representing federal, state, and local governments; corporations — from Fortune 500 firms down to virtual companies, academia, and individual teleworkers. "Our mission is telework education and advocacy," notes Gail Martin, executive director.

The term "teleworker" was coined by Jack Niles, a physicist at NASA, in 1977. Niles is the founder and past president of ITAC. Today, ITAC defines a teleworker as "an employee of an organization or a subcontractor to an organization who works at home one or two days a month." The average respondent in the study reported that they worked at home one or two days a week.

"In 1990, there were about 4 million teleworkers, as determined by a market research firm called Find/SVP, now called Cyber Dialogue," says Martin. "In 1995, it doubled to 8.1 million; in 1997, it rose to 11 million; in ’98, it was up to 15.7 million; and in 1999, according our survey, there are 19.6 million teleworkers." That figure, she notes, represents 10% of all U.S. adults over the age of 18.

Martin reports that 30,000 phone calls were made for the study, with a total of 274 respondents.

Calculating the savings

Just how did ITAC arrive at the $10,000+ savings per employee? They began with an average self-reported salary of around $44,000. "This is equivalent to $169 a day based on working 261 days per year," notes Martin.

While teleworkers reported an average of 45.3 occasions per year of absenteeism associated with managing personal and family needs, they did not lose a full 45 days of work. Because they could take care of those needs at home and work as well, the actual lost time equated to about 22 aggregate working days. The researchers then concluded that employers could save 63% of the cost of absenteeism per telecommuting worker, or $2,086 per employee.

In addition, the retention of workers who said that working from home is an important consideration leads to a replacement cost avoidance of $7,920 per teleworker.

Productivity gains considerable

The study also indicated productivity gains of $1,850 per teleworker per year. "This was obtained by calculating the percentage increase in self-reported productivity per day against their average salary wages," notes Martin.

The average productivity increase was 22% per day worked at home. Using the $169 daily salary figure, 22% represents a $37 gain per worker per day. Multiplying that times 50 (days worked at home per year) yields $1,850. "And we took the most conservative figure — one day a week at home vs. two," Martin adds.

Extrapolate those figures to a national scale and the savings become astounding. "If you simply based it on one day per week at home and multiplied it by 19.6 million, you would get $13 billion in national productivity savings," Martin says.

You can add to productivity gains the health benefits of staying at home. According to the study, workers spend an average of one hour per day driving to and from work. "Teleworking saves them the stress of commuting, and it also reduces pollution — as 87% of the respondents drive to and from work alone," notes Martin.

This results in a "big-time impact on stress and morale," Martin continues, breaking down the numbers. "Within the study, what we found was that the average commuting time saved is approximately 30 minutes each way, or an hour a day. Only 4% of the respondents carpool, and 2% use public transportation."

These statistics indicate that telecommuting can also reduce financial stress on employees. "With an average commute of 18 miles one way, you’re annually reducing the total commute by 1,800 miles per teleworker, which is a significant cost savings," Martin notes.

Allowing employees to telecommute should "absolutely" be integral part of any corporate work/life program, says Martin. "Very much so," she asserts. In fact, she adds, teleworking will be one of the key management tools of the millennium.

"The more progressive companies are already very active in this area, and are members of ours," she says. "They work with us to share findings, discuss barriers to telecommuting, and so forth."

Telecommuting is still relatively new, she adds, and standards and protocols have yet to be established. "We have a blue-ribbon panel made up of about 20 corporations, government agencies, and academia that is developing recommendations for proactively addressing key issues," she reports. The recommendations will be published in October.

[Editor’s note: ITAC will be sponsoring its next International Conference on Sept. 17-20, in New Orleans. For more information, contact: The Inter-national Telework Association & Council, 204 E. St. N.E., Washington, DC 20002. Telephone: (202) 547-6157. Fax: (202) 546-3289. E-mail: TAC4DC@aol.com, Or visit their Web site at www.telecommute.org.]