REDUCE OPERATING COSTS

It’s important to understand that implementing a telework program will require some start up and recurring costs associated with technology, training, support and maintenance. However, a successful telework program implemented correctly will reduce many costs that you may not even measure currently and the long term probability of cost reduction is high.

Numerous case studies have been conducted citing significant savings from implementing telework programs. However, it’s important to have precise measuring capabilities in place to accurately measure the impact of your telework program.

Mack Global Consulting has the tools and experience necessary to show you how to get the most out of your telework investment and accurately measure cost savings.

Real savings resulting from telework programs that impact the bottom line can be found by focusing in the following areas: (click the links below to view that section)
• Overhead Savings
• Recruitment & Retention
• Absenteeism
• Productivity
• Energy

OVERHEAD SAVINGS

Telework can save thousands, often millions, of dollars in real estate costs. Overhead costs can significantly be reduced with office sharing and the transformation of employees to full-time teleworkers. Mack Global Consulting has the expertise to help you maximize your savings with space reduction. Even a small or medium-sized organization can reap the benefits on space saving from a small portion of their employees teleworking.

Telework can have a significant impact in many areas you may not realize. How much does it cost to replace employees who leave? How much is employee absenteeism costing you? How much does it cost the organization for your employee to work in their designated office space? How much can the organization save if parking needs were reduced?

The most significant cost savings relating to telework can be found in overhead savings. The ongoing expenses of operating a business can be challenging particularly during difficult economic times. However, many organizations are finding out that implementing a formal telework program can significantly reduce real estate costs and utilities. By reducing the amount of office space needed by desk sharing, hoteling, and home-basing employees, organizations can experience significant savings. Additional expenses like parking can also be significantly reduced. Take a look at the case studies referenced at the end of this section showing companies who have taken advantage of telework opportunities and reported tremendous savings.

How much can your organization save by reducing overhead costs? Mack Global can help you figure it out by conducting a cost benefit analysis. Your organization will have a clear understanding of how telework can potentially impact your organization’s bottom line through reduced overhead expenses.

RECRUITMENT & RETENTION

There is increasing concern in organizations with retaining valued employees and fostering loyalty among workers. Employee retention is an important benefit that allows companies to keep knowledgeable, qualified, and productive employees. One analyst concluded, “the major challenge of tomorrow may not lie in balancing employer’s needs with workers’ skills, but in balancing workers’ personal needs with job demands.” Telework statistics indicate employees are less likely to leave a position that allows them to work from their home at hours that are convenient for them. This can positively impact the costs associated with high staff turnover (attrition) rates, and particularly when considering the average cost per hire which could range from $2,000 - $6,000 depending on the industry. According to the International Telework Association and Council, teleworking yields a 20% decrease in employee turnover on average.

Telework is significantly impacting recruitment and retention in organizations globally. It is quickly becoming a make-or-break issue in employee career decisions. In numerous surveys conducted, a significant percentage of employees would choose telework over a salary raise and would quit for another job that allows telework. In identifying top drivers for implementing telework programs, recruitment and retention is cited most frequently by managers. The costs associated with recruiting and retaining valued employees can be significantly reduced with the option to telework. Mack Global Consulting can show you how it’s been done in call centers, contact centers, and many other organizational structures.

ABSENTEEISM

Stress ranks as one of the top 10 reasons why employees miss work. On an average workday, one million employees are absent from work because of stress-related problems. Disability claims for stress have consistently risen over the years. Teleworking has been linked to reducing stress and stress-related illnesses because it reduces commuting, which can be highly stressful. Studies by Novaco (Northern Virginia Coalition) show that commuting adversely affects blood pressure, tolerance for frustration, short-term memory, occasions of illness, mood, residential satisfaction, and job stability.

Absenteeism can be reduced via teleworking by several methods - creating work-time flexibility, scheduling adjustments, and reducing stress associated with the physical commute and office environment, are a few ways. Ultimately, this leads to healthier, happier, and more productive employees who are absent less frequently, thereby impacting the bottom line. We can help you determine the cost of absenteeism in your organization and measure the impact of your telework program.

PRODUCTIVITY

Organizations who have successfully implemented telework programs usually report increased productivity for teleworkers of 10-20% on average. This increased productivity ultimately leads to cost savings. When organizations are able to produce more with the same or less employees, they can quickly reap the saving rewards and focus their attention and finances on other areas.

For example, the Virginia Department of Taxation implemented a telework program allowing its contact center employees to telework. As a result, those employees were 15% more productive on average. When the filing season approached and it was time for additional staff to be hired, they did not need as many additional employees for the filing season, because of the productivity increases of their teleworkers.

Here are a few companies that proudly report productivity gains as a result of their telework program:
Maryland Department of Transportation – reports 27% increased productivity
American Express – handled 26% more calls and produced 43% more business
AT&T – reported $100 million savings per year from productivity increases
JD Edwards – reports 20% - 25% increased productivity
Compaq – reports 15% - 45% increased productivity

ENERGY

Improving energy efficiency within a business can provide real benefits. Not only will it help to reduce impact on the environment, but it will also save money. If businesses are to truly cut costs and offset it against less attractive cutting measures, then they need to put a clear system in place to manage this. Without a policy to guide organizations forward, it will be difficult to answer these critical questions:
How much energy does the organization use currently?
Who is responsible for managing energy efficiency within the company?
What are the current issues with the organization’s energy consumption?
How can energy efficiency be improved?
What areas need to be improved or completely changed?
How much energy could be saved in the long term?
What impact would saving energy have on the organization financially?

Business owners worldwide recognize the benefits derived from implementing energy saving initiatives in their organizations, in an attempt to reduce energy bills and improve their green image for their customers.

By implementing a telework program, organizations can reduce their energy consumption and carbon footprint tremendously.

COST SAVING CASE STUDIES:

It’s clear to see that many organizations are taking seriously the cost reduction impacts a telework program can have on their company. Take a look at these case studies indicating significant cost savings from telework programs:

IBM drastically reduced the need for office space and save $56 million per year across the company. After 2 years with telework the company negated the need for 2 million square feet of office space.

AT&T was able to reduce its office-space costs by 50%. Since 1995, the company has saved $500 million in office lease costs by promoting telecommuting. In 1998, about 55 percent of the company's 55,900 managers telecommuted at least once a month.

Merrill Lynch reported saving $5000 to $6000 for each office space eliminated through the use of telecommuting.

Pac Bell saved about $20 million over five years.

The Texas Workforce Commission Appeals Department reduced the required rent-able square feet of office space by 1,824 square feet by having 19-22 attorneys telecommute.

Georgia Power reported a savings of $100,000 annually, with office space needs reduced by two-thirds.

Of Nortel's 13,000 teleworkers, 4,000 no longer need dedicated office space in a Nortel building. Overall, telecommuting allows the company to save $20 million dollars a year on real estate costs — equivalent to two 20-story office buildings of 40,000 square feet per floor.

LINKS ON ARTICLES RELATED TO TELEWORK SAVINGS (click below):

US Patent and Trademark Office
Cigna Healthcare Office
Telework Technology is Mainstream