Telework in corporate America

Wonder what the other guys are doing? Take a peek inside 10 firms' remote work programs.

How does telework play in your company? Is working away from the office widely embraced, tolerated or frowned upon? The bigger question: Is telework saving your firm any money - in facilities costs, increased productivity, or in employee recruitment, retention and training? To find out, we interviewed executives at more than a dozen companies about their programs. The results were surprising.

Today's telework takes many forms. There are formal programs dictated by corporate management to cut costs; grass-roots programs created to meet employee needs or demands; and occasional or informal telework - employees work at home after-hours, on a snow day, or when a manager says it's OK. Most firms with teleworkers also have full-time remote (or virtual) employees, often living in another state.

Schering-Plough, with 30,000 worldwide employees, has a program in its clinical research division. Forty percent of its 500 staffers telework formally two or three days per week or work remotely. The company doesn't account for occasional teleworkers. "I have no idea how many there are, but I'd imagine the numbers are quite high," says project manager Gail Smith.

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How does telework play in your company? Is working away from the office widely embraced, tolerated or frowned upon? The bigger question: Is telework saving your firm any money - in facilities costs, increased productivity, or in employee recruitment, retention and training? To find out, we interviewed executives at more than a dozen companies about their programs. The results were surprising.

Today's telework takes many forms. There are formal programs dictated by corporate management to cut costs; grass-roots programs created to meet employee needs or demands; and occasional or informal telework - employees work at home after-hours, on a snow day, or when a manager says it's OK. Most firms with teleworkers also have full-time remote (or virtual) employees, often living in another state.

Schering-Plough, with 30,000 worldwide employees, has a program in its clinical research division. Forty percent of its 500 staffers telework formally two or three days per week or work remotely. The company doesn't account for occasional teleworkers. "I have no idea how many there are, but I'd imagine the numbers are quite high," says project manager Gail Smith.

Similarly, HP, which has offered telework and other flexible work arrangements since 1990, says it doesn't "centrally track the use of work/life options." However, it estimates that between 10% and 50% of its workforce teleworks one day per week or on an ad hoc basis.

While there's nothing wrong with not tracking informal telework, it might prevent companies from optimizing cost savings.

Telework newcomer NASCO, an Atlanta national account services company, launched a small program in October 2002 with 60 project managers working one day per week from home. While NASCO lauds the increased productivity and employee morale, it doesn't expect to save money.

"We did a cost-benefits analysis, looking at everything from the cost of computer equipment to coffee, lighting, cubicles, you name it," says Mira Moss, NASCO's vice president of human resources. "Once employees are working three days a week at home, we could recoup some office space. But it's one thing to say you can get rid of these cubes, another to look at the business that's contracted for. We have a 10-year lease. So even if we got rid of them, we're still going to pay. With telework, the only thing we're saving on is the occasional cup of coffee."

Schering-Plough saves on office space but receives no direct cost savings, because the company owns its facility. But telework will keep the firm from having to lease additional space as it grows, Smith says.

Across the gulf, AT&T, IBM, Morgan Stanley, Sun and others are realizing huge facilities cost savings from telework. While most won't share specifics, Sun says it saves $150 million per year. Industry sources say KPMG saves $66 million, and Ernst and Young well over $100 million.

AT&T's program is one of the oldest, largest and most successful. Last year, it began a big push to "virtual officing," sending 400 middle managers home for good, as a way to reduce costs, increase output, and improve job and career satisfaction, says Joe Roitz, AT&T's telework director. To ease the process, the firm added a virtual office piece to its intranet, so workers and managers could handle the process themselves. Rather than set up a free-standing virtual office portal, AT&T links workers to the relevant departments such as IT, facilities and purchasing, to get set up.