The Virtual Edge: Cost savings and a green initiative (Part 3 of 5)

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Posted by Matt Rivera

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March 29, 2010

Previously in The Virtual Edge, Geoffrey Dubiski covered the impact of remote employment engagements as they relate to business continuity and recovery planning (BCRP), and the implications of allowing flexible working arrangements to off-set absenteeism as it relates to sickness/health issues.

In this third installment, Geoffrey will discuss how remote work arrangements can yield cost savings, particularly in terms of infrastructure, and serve as a green initiative. ~Mike Zambon

Employing a virtual or remote workforce offers tangible cost savings for both the business and its employees. With fewer employees in the office, the organization's real estate needs are reduced. The business will also pay less in terms of utilities consumption and infrastructure requirements than with a traditional workforce and office setting.

Depending on your company's policies, employees might also have opportunity to increase the money in their pockets. For example, employees might be able to:

  • charge back phone and Internet usage to their employer, offsetting their current monthly plans. (Home or consumer phone and Internet packages are usually more robust and faster than business accounts at a much lower monthly rate.)

  • write off part of their square footage, utilities, and other services as they relate to the pro rata share of the household on their taxes. (This varies according to state and federal qualifications, so employees should consult a qualified tax expert to be sure.)

  • reduce gas or other transportation costs.

  • save on dry cleaning of suits and formal attire required in the business setting.

  • spend less on meals by eating lunch in their own kitchens.

In addition, employees can refocus the time usually spent during the rush hour commute on their families.

Implementing a work-from-home policy can also serve as a green initiative. Carbon emissions associated with commuting employees are reduced, as are the emissions that result from having to heat, cool, and run a facility or office space. In addition, waste is reduced.

Being environmentally-friendly can also help attract and retain employees of all generations. Gen X, baby boomers, and traditionalists appreciate a green mentality for the impact it will have on their children and grandchildren. What's more, a 2008 study conducted by Experience Inc. found that 81 percent of Gen Y feel it is important to work for a green company, and 79 percent would accept a job offer over other non-green companies.

Despite the benefits, the decision to implement remote work policies should be made carefully. Here are few items to consider:

  • How much travel will still be required to company facilities, training, and clients?

  • What will be the impact on productivity? Without the water cooler nearby, employees working from home tend to engage in far less chat than those in an office setting.

  • Is there a pocket of talent somewhere that would be ideal for your company? Are they in the core workforce (7-15 years of experience) and unable to relocate due to school-aged children, aging parents, roots to the community, etc.? Could you engage these workers remotely?

  • Would a satellite office be practical considering the geographic proximity of new hires, or would it make more sense to allow them to establish home offices?

In light of the current economic climate, the costs of professional rental space are at all time lows, making the option of remote offices more feasible. Negotiate a strong lease with renewal options based on your needs. Consider looking outside major cities for lower rents and infrastructure support. Many state and federal programs are available for tax credits and reduced utilities based on where you hire or situate an office. With these programs, remote offices can self-fund for years to come.

Remote work policies allow you to reach new markets and clients. Plus, as you hire within communities (or homes) where talent is based, you eliminate relocation costs and Cost of Living Adjustments (COLA).

As with any proposition such as this, there are risks, so you'll need to asses your company's appetite for remote work, as well as its culture, before getting started. Potential risks include:

  • Talent loss due to lack of connection or inclusion in the wider operations.

  • Reduced productivity if the employee is not screened well (not everyone can work from home productively).

  • Expanded help desk requirements.

  • Asset deployment, maintenance and recovery.

  • Information systems vulnerability.

All of these risks, however, can be easily overcome.

One large hurdle that we will explore in depth later in the series, and is probably already a key argument in your mind, is trust. Can you trust your employees to be productive and do what they are supposed to be doing?

Again, keep the skepticism alive and tell us your concerns. We will address them as the series continues.

Hiring Managers Guide to IT Staffing


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