Managing a Remote Work Strategy

Managing a Remote Work Strategy

Key Operating Considerations for a Virtual /

At-Home Agent Program by Jack Heacock, The Tanner Group

Background

Enabled by the stunning advances in broadband communications, the advent

of wireless digital data transfer to the home officelevel and The President’s

March 2004 goal of having broadband in every home by 2007, the technologies

to support remote work strategies have only grown ‘better, faster and less-expensive’.

Blending of entertainment with broadband voice and data communications also

helps many equip their residences to be their ‘Home Workplace’.1

Until recently, the cultural and societal changes necessary to fully embrace “The New

Ways of Working”2 were only modestly successful. Organizations, both public and

private resist change. Managers of the 1980’s and 1990’s were encouraged to

manage by ‘wandering around’. While a vogue and chic persona, wandering managers

(like their wandering minstrels predecessors of the middle-ages) could never achieve

the measured results demanded by the information age, global competition and the war

on terrorism.

Industrial Age Working Models requiring workers to travel to a workplace and the new

acts of humankind, culminating in the War on Terrorism, called into question the safety

of traditional workplaces. Beginning in the late 1990’s, the troubling signs arose that many

decade long programs, policies, and practices were not exhibiting the desired effects.

Telework began growing at an annual rate of more than 20 percent.3 Due to a variety of

reasons, market professionals are forecasting increasing interest in the products necessary

to support virtual work, in large part because of:

• Aging workforce Changing demographics and an aging U.S. workforce will require

employers to retain workers longer, often as part-time and job-sharing employees working

from their residences, rather than working in premise based ‘traditional work places’.4

• Increasing insurance rates Worker’s Compensation Insurance Rates are expected to

increase 50 percent or higher once the “TRIA” (Terrorism Re-Insurance Act of 2002) is

sun-set early in 2005. …in order to survive (some insurers) may well deny insurance to

firms housing 50-100 or more employees in one location.5

• Workplace different after 911 September 11, 2001 terrorist attacks in New York, Pennsylvania

and Washington, D.C. jolted the nation. The Society for Human Resource Management (SHRM)

commented: ‘…One of the constants heard from U.S. Government leaders (post 911) is that this

conflict (the War on Terrorism) may require structural changes in the way Americans live. The

situation for the workplace will be no different.’6

• Employees want to feel safe SHRM’s latest research on job satisfaction shows a major

(unexpected) increase among employees in the importance of “feeling safe at work”. Overall,

feeling safe at work was ranked as a “very important factor” by 62 percent of employees in

2004 – up from 36 percent in 2002.7

• Federal government ‘continuity of operations’ 1998 Executive Order required all federal

government departments, agencies and commissions to ensure Continuity Of Government

(COG) and Continuity Of Operational Planning (COOP).8

• Clean Air Ground level ozone along urban economic corridors were exceeding Clean Air

Act standards.9 Groundlevel ozone, which is odorless and invisible, is a major component

of smog on hot summer days. Prolonged exposure causes the equivalent of sunburn to the

lungs. The revised federal standards have wide economic and environmental implications

and the makeup of the list has been the subject of lobbying in Washington. Areas in violation

face the loss of federal money for roads. Industrial development can be barred in those areas

unless companies prove that they would not make pollution worse. Telework / At-Home Agent

Programs could help remove offending counties from the EPA’s list. The Congressional funded

eCommute Program may be the means towards that end.10

Virtual Work’s Principal Components

Beyond the ‘executive vision’ for remote work to become a mainstream business practice within

an organization, a ‘ Champion’ should optimally be appointed at the highest levels of the enterprise

to oversee the program and allocation of resources for success. This ‘Champion’ acts more as an

ombudsman, rather than a line-manager, but must have coordinating authority (and in some cases

tasking authority) with:

• Human Resources

• Risk management, Insurance and Finance

• Facilities

• Operations

• Corporate Communications and Marketing

• Information Technology

Information technology is the most important and critical area for coordination. By any definition,

information age remote work cannot succeed without broadband communications, backed up

with an in-depth help desk for ‘Continuity Of Operations Plan’(COOP).

In the pre-911 era, organizations comforted themselves with ‘Disaster Recovery Plans’. Plans that

often reflected period back-up of corporate and customer data, alternate sites for data processes,

dual lines of communications, and procedures that most often resembled ‘Industrial Age’ processes

and mentalities. A few days, or possibly even weeks of disrupted services and reduced operating

capacities were calculated into the dynamics of the occasional power outage, severe winter weather,

tornadic or seismic events.

Post-911 the United States, as well as most overseas corporations (and governments) were painfully

and rudely left aware that not only must the data and electronic backbone of the organization be protected,

but so too must the ‘Human Capital’ be safeguarded. While much has been accomplished to improve the

well-being of urban workers by law-enforcement and the Department of Homeland Security, as a whole,

any concentration of employees makes them and their organization subject to potential acts of terrorism.

Today’s At-Home / Remote Work Strategy is all about disaster avoidance, not simply trying to recover

after an event. In the short term, the best strategy an organization can adopt is to decentralize its work

force and enlist geography to limit disruptions brought on by nature and humankind. If the United States’

geographic abundance was integrated into the national agenda, the funding presently allocated for law

enforcement, anti-terrorism activities, infrastructure improvements, pollution abatement and other

social maintenance and ‘status quo’ programs could have a greater impact.

Financial Considerations

Industry experts are proving that team building with new goals that concentrate on COOP (Continuity

Of Operations Planning) is key to beginning the systemic changes necessary for the coming era.

Entire departments must learn to communicate; each has specific roles in the smooth functioning

of gaining the next steps to the “New Ways of Working”.

Once a cross-functional team is assembled, under the leadership of a corporate ‘Champion’ the

real work begins in the individual functional areas to assure that the jurisdictional and legal issues,

ergonomic and environmental concerns, selection and training issues and operational considerations

are all addressed. Based upon the following assumptions, one-hundred remote workers could show

the following savings when measured against their premise based counterparts over five years:

Start Up Cost per Teleworker

Furniture, Equipment and Telecommunications $5,900

One time charges, Set-up & Installation $1,200

Total per Teleworker $7,100 †

Ongoing Monthly Costs

Telecommunications $ 110

Network & home office/teleworker support $ 110

Total Average Cost per Year $2,640

Year One Average Cost $9,740

Year Two Average Cost $2,640

Recurring One-Time

Savings from unneeded office build out $1,500,000

( $710,000)

One-Time start-up Costs

Annual Real Estate Cost Avoidance $ 500,000

Productivity ($50K salary x .15 x 100) $ 750,000

Retention ($50K salary x .20 x 100) $1,000,000

On-Going annual costs ( 264,000)

Net Annual Savings (1st Year) $1,276,000 $ 790,000

Net Annual Savings (2nd - 5th years) $1,986,000

Total Five Year Savings $10,010,000 $10,010,000.11

In an effort ort to simply and quantify ‘Benefits to the Employer per Teleworker’ the following

has been developed for an employee only teleworking 1.5 days per week and an

annual salary of $26,000 26,000:12

• Increased employee effectiveness $3,900

• Deceased sick leave $ 226

• Increased organizational effectiveness $ 520

• Decreased turnover rate $1,300

• Reduced parking requirements $ 360

• Office Space savings $1,620

TOTAL SAVINGS (At-Home only 1.5 Days per Week) $ 7,926

Conclusions

Remote work strategies are not only the best defense to avoid disasters, they have

the added benefit of keeping jobs on-shore,increasing individual and organizational

productivity, and addressing urban congestion and pollution as well as helping ensure

continuity of operations. A full-time teleworker enjoys at least a $4,000 indirect pay

raise and can better balance their family /work responsibilities, creating a huge boost

for recruiting and retaining the best employees.

Setting-up remote work programs are no longer as expensive or as complex as they

once were, thanks to the continued improvements in telecommunications, technology

and management understanding of ‘The New Ways of Working’.

While some pundits have suggested that ‘… telework is not rocket science…’, I believe

that telework / remote work strategies are in fact as complicated as some rocket science,

because of the many ‘moving parts’, individual requirements and organization needs to

be addressed and because remote work is all about change – change that is unsettling

for some, yet represents new opportunities for innovation and improvement for all.

Footnotes

1 ‘Home Workplace’ by Brendan Read, CMP Publications, ISBN 1-57820-310-4, May 2004

2 ‘The New Ways of Working’ British Prime Minister Tony Blair’s message to the 5th European Conference on Telework, Lisbon, September

1998

3 Cherry Anderson, Gartner Group Analyst, Spring 2000

4 Teleworkers / At-Home workers are on average 22 percent more productive, require 60% less time off due to illness or other sources of

4 The Tanner Group: Managing a Remote Work Strategy

absenteeism, turnover (churn) is reduced by 20% and off offer the competitive advantage to employers of a higher quality pool of skilled

workers. Smart Valley, Inc.®, San Mateo, California 1993-98; Telework America™ 1999, 2001, and 2003 Research; ITAC’s e-Work Guide

circa 2000; AT&T School of Business and Technology, Telecommuting Seminar October 1997 and AT&T Research October 2003, Verizon

Telecommunications presentation to the 53rd

Annual Conference of the Society for Human Resource Management, in San Francisco, June,

2001.

5 Christopher Oster and Michael Schroeder, Wall Street Journal, “Workers’ Comp Gets More Expensive for Employers in Post-Sept. 11 World”

January 9, 2002.

6 HR Magazine, December 2001, Vol. 46, ¹ 12, page 128 “What Now?” by Dave Patel – Manager of workplace trends and forecasting at SHRM.

7 HR Magazine, May 2004, Vol. 49, ¹ 5 page 152 “Feeling Safe” by Jennifer Schramm – Manager of the Workplace Trends and Forecasting

Program at SHRM www.shrm.org/trends

8 GAO Testimony, March 30, 2004, U.S. House Gov’t Affairs Committee, Chairman Tom Davis (R, VA) … all departments, agencies and

commissions failed to demonstrate acceptable COG and COOP preparations to withstand terrorist and weather events…

9 The EPA announced that over 500 U.S. Counties have failed in their efforts to reduce ground level ozone to ‘acceptable’ levels – April 2004,

Washington, D.C.

10 See www.telcoa.org the Washington, D.C. based Telework Coalitions’ web site for more information about the eCommute Program.

11 “Virtual Work Place Cost Benefit Analysis” Jack Heacock / The Tanner Group, www.tannergroup.com CCDemo Conference, Dallas, Texas,

February 5, 2004, and e-Work Guide™, 2000 Edition, pp.13-16, published by ITAC, Washington, D.C. in association with the Consumer

Electronics Association, American Management Association and the United States General Services Administration, October 2000.

† Numbers based on average typical costs

About the Consultant

Jack Heacock

is a Principal Consultant with The Tanner Group of Salt Lake City, Utah from his home in Parker, Colorado. He is a member

of the Editorial Board of Call Center Magazine – New York City, and co- founder and Senior V.P. of the Telework Coalition of

Washington, D.C. www.telcoa.org, former President of The International Telework Association and Council (ITAC), a

member of the Society for Human Resource Management (SHRM), a planning board member for The North Texas Technology

Council www.nttc.ws/telework and previously served, in combat with an infantry division, as a U.S. Army Signal Corps Officer.

He is a graduate of Valley Forge Military College and the University of Delaware’s College of Business and Economics. Jack can

be contacted through the Tanner Group’s web site at: jheacock@tannergrp.com

2818 South Redwood Road

Salt Lake City, Utah 84119

801-994-5000

800-429-8550

801-538-2322 fax