Virtual Office
Assessment
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Introduction
You may not have thought about it, but you may already be using some form of Virtual Office;
- a producer who is encouraged to spend little time in the office – just bring in the apps
- a manager who takes a laptop home to get some reports done
- an owner who has a management system at the house
- a CSR who has completes a project at home
For this exercise, you will be considering the virtual office as an alternative, or an addition, to having staff in the office on a more permanent basis than those examples. What are the pros and the cons, what are the costs and the savings, what are the benefits for the employee and the employer?
Definition
- ‘virtual’ - being such in force or effect, but not openly so.
- ‘office’ – each one will have their own definition starting with ‘a place where ….’.
- So a Virtual Office will be a copy of the real office that you have come to know and love – or is it?
Here are some other phrases and definitions that you may have heard:
- Telecommuting: Working from home one or more days a week during normal business hours.
- Virtual/mobile office: Using communications tools and technology to perform job duties from anywhere, not just the home - customer location, airport, hotel, etc.
- Hoteling: Sharing office space in a company location designed for use on a drop-in basis by employees. Employees either reserve space in advance or drop-in to use a cubicle equipped with standard office technology - phones, PCs, faxes, printers, copiers, e-mail, Internet access, etc. - on an as-needed basis.
- Satellite office: A fully-equipped office location established by the company, normally in suburban locations, where employees can reserve space and work one or more days a week closer to their homes. Satellite offices reduce employee commute times and help ease community traffic congestion.
- Telework Center: Similar to a satellite office, but space is shared by employees from numerous public and private employers. Normally operated independently, employers are charged for the space and services utilized by each employee per day. These centers are located closer to employees' homes than their regular company locations.
Virtual Office moves the work to wherever the people are, giving the term "office" new meanings. It also means breaking away from the idea that supervisors have to remain in a central location and manage by observation. The word "supervise" derives from the Latin super, meaning above, and videre, meaning to see - "seeing above" or "watching from above." Called "managing by direct oversight," the old notion of supervision is a carryover from the early days of industrialization, when factory managers literally sat up on high benches overlooking their employees, watching their every move.
As you go through this assessment process you may see some pros and cons to the virtual or the real office that you haven’t considered
History
1877The first Virtual Office on record was a Boston bank president, who arranged to have a phone line strung from his office to his home in Somerville, Massachusetts. No one called it telecommuting back then.
1963 A programmer working on the precursor of the Internet in Santa Monica, California, reluctantly resigns from the project to stay home a care for his wife who was experiencing a difficult pregnancy and was confined to bed. An extra phone line and a teletype machine allowed him to stay on the project.
1973 The term "telecommuting" is invented in by Jack Nilles, a rocket scientist (really) working on NASA satellite communications projects in Los Angeles. Experiencing gridlock one time too many, Nilles decided to concentrate on moving work, not workers.
1978 Blue Cross/Blue Shield of South Carolina starts a "cottage keyer" project, showing 26% productivity improvement over in-office counterparts.
1980 Mountain Bell started a telecommuting project for its managers and the U.S. Army launched a telecommuting pilot.
By 1990, telecommuting projects are underway in a number of companies and governmental agencies in the U.S. Telecommuting spreads to Europe, Australia and Asia. Here is the growth rate in the United States
1990:3.4 million
1994: 9.1 million
1997: 11.1 million
1998: 15.7 million
1999: 19.6 million
2000: 16.5 million regularly employed telecommuters, 23.6 teleworkers (includes work-at-home and occasional telecommuters as well)
2001: 28 million teleworkers
2003: 23.5 million employed teleworkers + 23.4 self-employed teleworkers
2004: 44.4 million (24.1m employed teleworkers + 20.3m self-employed teleworkers)
Virtual Office projections(according to Gil Gordon Associates)
“The longer I'm involved in this field, the less certain I am about its future -simply because it is evolving in ways that none of us expected. The one-year projection is easy: continued growth along the same lines as we see today, with what has become the typical 10-15% annual growth in the number of telecommuters and an increasing diversity in the types of employers and job types involved.
Five years out is a little trickier. My best guess is that we will see the beginning of the end of telecommuting by that time, in the sense that telecommuting as we typically know it will morph into a much broader concept of remote access. That's already happening, in fact - many employers and vendors are starting to divide work into work done in the traditional office vs. work done elsewhere. The "elsewhere" can be at home, on an airplane, at the beach house, at a client site, in a telework center, in a hotel room, etc. From a technology standpoint, where the "elsewhere" is really doesn't make a lot of difference. From a policy and Human Resources standpoint, however, the work-at-home variety of remote work will still be markedly different.
Another relevant factor five years from now is the continued evolution of business models and organization structures. What we're seeing today with the growth of smaller, more agile companies and Internet commerce is only the beginning. In my view the dominant business models will no longer be the AT&T/IBM/General Motors type of organizations. These newer and culturally-different organizations will find the concept of telecommuting and flexible work in general to be second-nature to them.
Ten years out is almost impossible to predict, only because of how quickly and how unpredictably the underlying technologies are changing. I'd like to think that within ten years the majority of employers will say to their employees (or associates, or affiliates, or whatever we call them) "work where you work best." That is, given the available technology and your own personal preferences and the requirements of your clients and management, locate yourself each day where you are most likely to be able to do your best work and add the most value.”
Consider This
Big productivity gains?
Yes and no. First of all, remember that the concept of "productivity" is an industrial-age term that compares output with input; when output goes up per unit of input, that's a productivity increase. But that concept is woefully inadequate when applied to most office work; there isn't the same simple kind of input-output relationship for knowledge workers.
That means that if we're honest with ourselves, we really don't have a clue about what "white-collar productivity" means, in most cases. While there are indications of 15%- 20% productivity gains, Virtual Office programs DO seem to lead to increased work output - for many reasons. Maybe the term "effectiveness" is better suited for our needs - which is meant to include all the aspects of knowledge-worker's activity. To be sure, it includes quantity of work produced - but also includes quality, timeliness, and ability to handle multiple projects and priorities.
The important aspect of managing a Virtual Office is to be able to measure results. What is expected, what is achieved? Are deadlines met? Is quality and quality acceptable (or better)?
Starting a Virtual Office
Try one or two people to telecommute only one day a week for one month. If you can't get that mini-trial approved, then all the data in the world won't make any difference.
Virtual Office days
There is no "right" number of days for a Virtual Office. Typically, it seems to work best when the range is from one to three days per week on average. In some cases it might be higher, but there are potential problems when you get to four or five days per week - it's harder to continue feeling that you're really part of the work group, it's more difficult to schedule meetings that you must attend, and the logistics of getting work to and from the office can get complicated.
A "long-distance" Virtual Office
The distance between your home and the Virtual Office isn't really the issue. More and more agencies are using sales representatives who live in one city and work there, and only occasionally visit the headquarters office. They are regular employees with all the benefits, etc.
The question facing you is more about the nature of the work you'll be doing in a Virtual Office. You'll also need to decide in advance how you'll make the best use of phone, fax, e-mail and on-site visits (and perhaps videoconferencing) to stay in touch with the office and co-workers.
A Virtual Office for your agency
While many of the news reports focus on the Fortune 500-type companies, most telecommuting happens in smaller companies. Most employment in the US and many other countries is spread across a large number of small companies, and isn't concentrated in the biggest ones. Small companies can adopt innovations more quickly, are often under pressure to cut costs or retain key people, and don't have to struggle with thick policy manuals and endless committee meetings before making changes like introducing telecommuting.
Teamwork
There are plenty of ways for team members to work together without being together. Also, most teams have some work that is collaborative in nature, but at least as much that's individual work. The key to using a Virtual Office in a team environment is to organize the work so that most of the individual work is reserved for Virtual Office days, while the collaboration takes place when everyone is in the office. This might mean, for example, that the team decides to have everyone in the office on Tuesdays and Fridays to assure enough time together.
Even when some team members are in their Virtual Office, it's still possible to collaborate at a distance - individual phone calls, conference calls, email, and fax are some of today’s tools that can be used.
Confidentiality and security
- If employees can walk out the door of your office with reports, diskettes, files, and anything else in their pockets or briefcases (as they almost always can), then it's incorrect to say that Virtual Office presents a new and different security risk.
- There are many hardware and software solutions for maintaining remote-access security. They aren't completely secure - nothing is. But they are reasonable and prudent barriers to unauthorized access.
- If you select the right people AND (if necessary) provide them with locking file cabinets and password protected computers at home AND train them about their responsibility to keep private or confidential information secure, you have taken reasonable safeguards.
- There are some (but fewer than most managers imagine) applications that probably should not be done remotely, no matter how many preventive steps you take. Even if you have every imaginable safeguard in place, senior management may just not feel comfortable having that work done away from the central office. If that's the case, then it's generally better to keep those tasks inside the office.
- Concerns about theft of equipment from the home are exaggerated, and with a few precautions this risk can also be minimized.
Exempt or not-exempt
The term "non-exempt" refers to whether or not a given employee is exempt or not exempt from the terms of the Federal Fair Labor Standards Act (FLSA). There's no overall reason under FLSA why non-exempt employees can't use a Virtual Office . However, you need to check if there is a particular provision in your state labor law that restricts work at home for non-exempt employees.
Non-exempt employees have to follow certain rules about length of the work day and work week, overtime payments, breaks during the day, and other items. These must be followed for non-exempt telecommuters as well as non-exempt office workers. This really isn't a new issue, however; many employees who work out of the office (such as truck drivers, repair technicians, etc.) are non-exempt and don't work under direct supervision all day long. If remote work is feasible for them, it's feasible for your Virtual Office.
Freelancer vs. Virtual Office
This may be an apples and oranges comparison. It certainly IS cheaper to hire a freelancer than to have a full-time employee on staff, especially when you figure that the cost of insurance and other benefits increases your salary cost by about one-third.
But there are three potential problems with this change:
- First, depending on what the freelancer charges and how much he/she is used, the total cost over the course of a year might equal or even exceed the cost of fulltime payroll, even including those benefits costs;
- If a freelancer is in fact kept busy almost full-time by your agency, and is working so closely with the company that he/she is in effect an employee, then the IRS and other regulators say the freelancer IS an employee - and is entitled to all those benefits. So, the cost of using the freelancer isn't any less than having the employee;
- The decision to use a Virtual Office shouldn't be based on cost alone, unless for some reason you need some highly specialized or expensive equipment at home that adds dramatically to the cost of supporting you remotely.
Career advancement
The evidence to date does not support the concern of “out of sight, out of mind. The training for both Virtual Office staff and managers should include tips on career management at a distance. If anything, most managers report that their Virtual Office staff are often more promotable rather than less, because the experience of working at a distance helps demonstrate their capacity for more responsibility.
100% attention to job.
Employers will deal with this as they now deal with employees who "moonlight" or otherwise have sideline businesses: as long as those second jobs or businesses don't interfere with the employee's ability to do his/her job, and don't create any kind of conflict of interest or confidentiality breach, there should be no reason to prohibit them.
The potential twist with a Virtual Office is the need to keep the main job and the second job or business physically separate. For example, the telecommuter shouldn't use the company's computer or phone for the second job.
More people than we realize may have second jobs. It's a fact of life today, either because households need the income or because people are practicing what the WALL STREET JOURNAL once called "defensive entrepreneurship" - having your own business to fall back on just in case your company starts downsizing.
VIRTUAL OFFICE
ADVANTAGES / DISADVANTAGES- Reduce office space costs
- Reduce non-productive time in office (e.g., watercooler chats)
- Increase revenue through more sales calls, contact with customers, etc.
- Expand service hours
- Expand labor pools
- Improve productivity (more work done per hour, week or month)
- Reduce turnover
- Reduce absenteeism and tardiness
- Improve scheduling and staffing flexibility.
- Enhance recruiting and retention
- Increase "face-time" with customers and at customer sites
- Improve response time to customer inquiries and requests
- Offer customers information "on the spot"
- Improve communication with customers
- Enhance peak performance (by working at times when most productive)
- Maximize potential by broadening responsibilities
- Work with fewer interruptions
- decreasing overhead costs
- satisfying demand for additional office and parking space - the fewer workers in a specific company location, the less space you need.
- helping employees balance the demands of work and family;
- and, retaining valuable employees.
The 2000 AT&T Employee Telework survey (consisting of interviews with 1,238 managers from a statistically reliable, stratified random sample, and with an error range of +/- 2% at the 95% level of confidence) reveals the following benefits associated with teleworking.
- Teleworkers say they work at least one hour more per day - equivalent to about 250 hours or 6 weeks more each year.
- These hours are more productive: 72% of teleworkers say they get more done at home than when in the office.
- 67% of teleworkers who reported receiving a competing job offer reported that giving up an "AT&T telework environment" was a factor in their decision to turn down the offer.
- 66% of all AT&T managers report that telework is an advantage in keeping and attracting good employees.
- 77% are more satisfied with their career now than before teleworking.
- 83% of teleworkers are more satisfied with their personal and family lives since beginning a telework arrangement.
- AT&T has saved about $25 million a year in real estate costs through employees who are full-time teleworkers.
- It is definitely not for everyone. Force the wrong kind of person into this and his/her performance will drop
- There is a gap between what many employees think the Virtual Office is and what it actually is; that's why prospective Virtual Office staff need a realistic preview of the good and bad parts to be able to make an informed decision
- It's costly - at least initially. No matter what longer-term benefits exist (and there are many) you still need to come up with some up-front money to fund equipment investment, phone bills, etc.
- It's a challenge (at least initially) for most managers - especially they would rather continue dealing with people face-to-face. It upsets their status quo, no matter how beneficial it might be to them;
Advantages for your employee
- Enhance personal scheduling and flexibility
- Balance work and family situations more effectively
- Avoid the time and stress of commuting
- Improve quality of life
- Save on wardrobe, commuting and parking costs
- Reduce fuel consumption
- Reduce traffic congestion
- Increase electronic communication to reduce paper use
- Increase employment opportunities for those with accessibility challenges
A few. A Virtual Office is not for everybody--isolation, procrastination, even boredom--get to some. Because their office can be anywhere they park their portable, workaholics often find it difficult to end their day. Temptations such as neighbors who think work-at-homers aren't really working, the lure of household chores, and family distractions can easily undermine others.
Family turf problems
The Virtual Office can sometimes add to family stress. Some workers report that their spouses resent leaving for work now that one partner is able to stay at home. Children can get confused too.
Watercooler withdrawal
Some miss the social aspects of working with other people and networking by the water cooler to keep up-to-date.
Virtual Office career track
Some fear that they will be left out of the loop and ignored for future promotions. They were worried that their companies might think they were less committed to hard work.
Actually Virtual Office workers get promoted more often
The fear of being left out of the loop is not based in fact, according to Texas-based telework consultant Joanne Pratt. She discovered, in a survey of over 17,000 telecommuters, that teleworkers receive a higher proportion of promotions than their stay-at-work counterparts (Myths and Realities of Working at Home, U.S. Small Business Administration, 1993).
VIRTUAL OFFICE MANAGEMENT