Recent Studies: Telecommuting Beneficial to Business Bottom-line

Q BridgeAfter Investing heavily in hardware for its telecommuters, Blue Dolphin Group (BDG), a magazine subscription agent based in Boston, failed to see any noticeable cost savings. But then again, that wasn't the company's goal.

"Our objective was to attract and retain talented people," says Don Nicholas, CEO. BDG's formal telecommuting program started when a senior writer moved to Connecticut. Having invested five years of training, BDG didn't want the employee to quit. "Since the program started four years ago, turnover at BDG substantially declined," Nicholas explained.

Employers, in general, want higher corporate efficiency, increased productivity and improved employee morale. According to several recent studies, all three goals can be accomplished by allowing more workers the opportunity to telecommute.

Trend Toward Flexibility
According to The Society of Human Resource Managers2001 annual survey, the primary change in the past five years is a measurable trend toward flexibility. In 2001:

Business objectives for implementing flexible work arrangements vary from company to company. The National Association of Insurance Commissioners adopted a formal but limited telecommuting policy specifically for improving job satisfaction, productivity, and retention. Human Resources Manager Brent Roper said that telecommuting, compressed and flexible work schedules must always put business needs first. Roper stressed that any of these programs that contribute to employees satisfaction and productivity also contribute to bottom-line efficiency.

ITT Hartford implemented flexible work arrangements in response to seeing significant turnover in their underwriting department. Companies like AT&T, US Sprint and Xerox use compressed workweeks as a business tool to reduce overhead and absenteeism costs.

Reduces The Rate And Cost Of Absenteeism
According to the latest CCH National Survey, 43 percent of 234 human resource executives consider unscheduled absenteeism a serious problem for their organization. The survey estimated the rate of absenteeism to be 2.2 percent at a cost of $755 per employee per year. "Most employers reported using multiple work-life, and absence control programs to reduce the rate and cost of absenteeism," said Nancy Kaylor, analyst for CCH.

The survey reports telecommuting and alternative work arrangements were rated the most effective programs (63%) for reducing absenteeism (rated over leave for school functions, employee assistance programs, and disciplinary action).

Optimizing flexible HR strategies promises the best ROI
Optimizing flexible human resource strategies promises the best return on investment and business success. That's the conclusion of a 2001 study by Watson Wyatt, and Ernst & Young. For the second year in a row results from 500 companies with more than 1,000 employees confirm the direct relationship between human capital management and the company's financial performance.

Companies with teleworking and flexible work arrangements ranked highest in strength of human resource practices with a 64 percent total return to shareholders, more than three times the 21 percent for companies with weaker human resource practices. "Our research demonstrates that there is a clear relationship between the effectiveness of a company's human capital management and shareholder value creation," said Ira Kay, director of Watson Wyatt's human capital group. "The overriding message is if a company's goal is to improve its shareholder value, a key priority must be its effective utilization of human capital."