Recent Studies: Telecommuting Beneficial to Business Bottom-line

Offering workers the opportunity to telecommute can increase retention, enhance recruiting, and boost productivity. A number of recent studies examined the approaches businesses have used in human resource management to accomplish these goals for workplace efficiency and increase financial performance.

The Society of Human Resource Managers' 2001 survey shows the primary trend in the past five years is a measurable move toward flexibility.
In 2001:

• The number of companies offering telecommuting grew to 37 percent from 20 percent in 1997
  
• Flextime grew to 58 percent from 46 percent
  
• Compressed workweeks are now offered by 31 percent of the companies surveyed, up from 22 percent in 1997.

Business objectives for implementing flexible work arrangements vary from company to company. The National Association of Insurance Commissioners adopted a formal telecommuting policy specifically for improving job satisfaction, productivity, and retention.

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 help reduce overhead and absenteeism costs.

According to the latest CCH National Survey, 43 percent of human resource executives consider unscheduled absenteeism a serious problem. The survey estimated the rate of absenteeism has increased to 2.2 percent, at a cost of $755 per employee per year. Telecommuting and alternative work arrangements were rated the most effective programs (63%) for reducing absenteeism.

Optimizing flexible human resource strategies promises the best return on investment and business success, says a 2001 study by Watson Wyatt, and Ernst & Young. Results from 500 companies with more than 1,000 employees confirm the direct relationship between human capital management and 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.

"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," said Ira Kay, director of Watson Wyatt's human capital group. "If you hire the right people, create an environment that supports creative thinking, and increased productivity, leveraged by technology, you'll reap the rewards."