Large numbers of AT&T employees are moving out of traditional offices and into virtual offices as a way of increasing productivity, work/life balance and their quality of life. They rely on a structure that is more and more “net-centric” - organized around networks instead of buildings. According to our 2002/2003 employee telework research, 17% of AT&T managers now say they work in a full-time virtual office (or “VO”, defined as working all of a standard work week at home or from a customer location). This is almost double the 9% VO reported in 2001. Another 40% report less-than-full-time telework patterns including working from home, office sharing or hoteling arrangements. Shifting to a frequency-based view, about 33% of AT&T managers now telework at least once a week, over four times the 8% who did so when our research first began in 1992.

This network-based structure is expected to generate over $150 million in benefit to AT&T in 2003 by increasing productivity, reducing overhead costs such as real estate, and enhancing retention and recruitment. Examining our decade of data, we see that telework is no longer an employee perk or an “alternative work arrangement.” These latest documented productivity gains and cost reductions are the foremost dimensions of a fundamentally new operating model - a net-centric structure that delivers significant advantages for the employee, the company and for society in general.

In 2002, the average number of days an AT&T teleworker worked from home increased from 6.7 to 9.0 per month, continuing a trend in participation observed in recent years: Occasional telework (less than once per week) is growing less popular. On the other hand, frequent teleworkers (more than once per week) are working at home even more often, with increasing numbers making the change to virtual office during the past year.

The key to this transformation of the firm is the concept of arranging work around networks instead of buildings. Networks span geography, allowing diverse teams to rapidly collaborate and the firm to recruit talent that cannot or will not relocate. Networks allow core knowledge elements to be decentralized to increase business continuity. Networks allow work to become independent of traditional business hours (which have less and less meaning in a global economy). Networks allow intellectual capital to be more easily captured and managed in a secure manner. Our experience and data suggest that an organization organized around a network is a more efficient, effective, flexible and resilient organization.

Productivity gains are the most significant (but least understood) benefit of telework. AT&T teleworkers have consistently reported gaining about one extra hour of job-based productive time each day when working at home. They redirect the majority of their commuting time (80 minutes) to work activities. This increase in productivity is validated by other internal AT&T research. For example, managers in virtual offices are more likely to be rated as promotable than managers in traditional offices.

Furthermore, nearly one in three managers report that telework has had a positive effect on their career. (Rhetorically, we ask what other management practice can generate such a success rate?) Few employees cite a negative impact, which gives little support to traditional fears of being “out of sight, out of mind.”

Employees say that improved productivity is the top advantage of telework, although a better balance of work and family isn't far behind in the rated benefits. Employees also believe that AT&T's telework program demonstrates the company's cultural values, such as caring about employees and promoting trusting relationships. These factors are important drivers of job satisfaction that aren't often cited as advantages of telework.

Teleworkers feel that both they and the company save money by the arrangement, even though many employees use their personal voice lines and other equipment to work from home (but save on gasoline and wear on their vehicles). The environmental benefits of eliminating the daily commute are obvious, although teleworkers are more likely to cite benefits that are more immediate and personal than societal.

All of these advantages relate directly to job and career satisfaction, increasing teleworkers' organizational loyalty. About 2 out of 3 teleworkers (67%) report increased job satisfaction after beginning to work from home. Approximately the same proportion (64%) report increased satisfaction with their career. Roughly half (47%) of teleworkers who had received competing job offers factored the ability to work at home into the decision to stay with the company. If teleworkers were told they could no longer work from home, two out of five (43%) say they would seek another position that supported telework, in or out of the company.

Non-teleworkers report that the need for human interaction is the primary reason more employees don't work from home. Since the demographics of teleworkers and non-teleworkers are very similar, including organizational alignment, this need may be more related to a specific individual and/or local team than the job function itself. It may also reflect lack of experience with a telework environment (non-teleworkers perceive all the reported barriers as more significant challenges than teleworkers do, perhaps illustrating that perception may be worse than reality). Both teleworkers and non-teleworkers see lack of broadband as a significant reason why more employees don't telework.

To conclude, there are significant business advantages resulting from this shift to a network-based operating structure. The $150 million in annual business advantage AT&T receives from telework is small, however, compared to the benefits that can accrue to society as a whole from these new models of work, education, recreation and community. For example, our teleworking employees avoided commuting over 154 million miles to work in 2002, saving 7.4 million gallons of gasoline and hundreds or thousands of tons of pollutants from being exhausted into the air. Families and local communities benefit from increases in employee job satisfaction and work/family balance.

Broadly, as our societal reliance on location-based work shrinks, so do the traditional perceptual and physical barriers - and the inefficiencies and disparities - arising from age, disability, physical appearance or worker locale. Telework offers a powerful way for those who have typically been disenfranchised from the economic and social mainstream, such as seniors, or members of the disabled community, or those in rural areas, to become active participants in the knowledge economy.

2002-2003 results are based on a representative survey of 1200 AT&T managers. Confidential at-home telephone interviews were conducted by a leading independent market research company, using stratified random sampling techniques. For additional information, see “Measurement of Environmental Impacts of Telework Adoption amidst Change in Complex Organizations: AT&T Methodology and Results,” Resources, Conservation and Recycling, Elsevier Science B.V. 2002.