Last week we discussed the technical requirements for supporting the “virtual workplace,” an organization in which employees and their bosses (or peers) operate out of different locations.
Last week we discussed the technical requirements for supporting the “virtual workplace,” an organization in which employees and their bosses (or peers) operate out of different locations.
I noted that the number of companies defining themselves as a “virtual workplace” has gone from 57% to 83% in the past year. Increasingly, offices also are smaller and more distributed: 90% of employees work away from headquarters, and the number of branch offices increases by roughly 10% year over year.
You may be wondering what’s driving this shift. There are several compelling motivations for companies to move to a virtual workplace. First are the increased agility and flexibility an organization gains by decoupling job functions from geography. A company that can reorganize swiftly to address a changing business environment — without being slowed down by the time and costs of relocating or replacing employees — has a competitive advantage.
Second is the inexorable pressure of rising real estate costs. Although the consumer real-estate bubble has burst in many parts of the country, the facilities cost of supporting an employee in a major metropolitan area (now around $20,000 per employee, per year) continues to run double the IT cost (roughly $8,000 to $10,000). As you move that employee farther out into the suburbs, the ratio inverts, with the facilities cost dropping to zero in the extreme case of a company supporting telecommuters. Healthcare giant McKesson recently avoided some $3 million in facilities costs by moving to a “virtual contact center” model for its “Ask-A-Nurse” programs.
Employee retention is another plus. McKesson reported decreased turnover in its Ask-A-Nurse program as a result of moving to telecommuting. And with dual-income households increasingly common, sometimes the only way to retain a valued employee is to support a virtual workplace.
Increased productivity can be another benefit, although it’s hard to measure directly. Post 9/11, Lehman Brothers instituted a virtual workplace policy. Five years out, the firm reports that 60% of employees who work from virtual locations report productivity gains. One interesting effect of investing in virtual-workplace technologies — such as Web conferencing, desktop videoconferencing, VoIP and presence — is that these technologies often make interactions more effective, even for employees in the same office.
For employees, the advantages of a virtual workplace include saving on time and expenses. Whether an employee is working from a local branch office or is an out-and-out telecommuter, commutes are shorter (and less expensive) than a long-haul drive into a major metropolitan area. And for those who care about such things, there’s the ability to minimize one’s carbon footprint by focusing travel time on meetings that truly require in-person presence, rather than traveling to a location out of habit.
Finally, employees working virtually report that it’s easier to mesh work and private lives seamlessly — dashing out of the office to bring a forgotten lunchbox to a child’s school, for instance.
All that said, however, there are significant cultural and organizational barriers to managing a virtual workplace. What are they, and how can savvy IT executives manage around them? Stay tuned.
