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Show Me the (Telework) Money

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I had a very interesting conversation the other day with some folks from both government and industry about the return on investment (ROI) of telework. The coolest thing about working for Telework Exchange is that we bring smart people from both groups together to find innovative ways to address tough issues. So now, put your thinking caps on and join this conversation.

The issue at hand is ROI and how we quantify the value of telework. We have talked about a lot of benefits (and some "disbenefits") of working remotely. In this economic and budget climate, we need to focus on the hard dollar savings. Let's call those savings hard ROI. The other side of the coin is soft ROI, the quality of life and more indirect benefits. These are still very important, but let's set those aside for a moment and think like accountants. We start by classifying returns in three groups: employer returns, employee returns, and societal returns. I'm going to use the Federal government as the employer in this discussion, but it would work (with some minor modifications) for any large employer. I told you this was going to be accounting work, so lets start with a story and put on our green eyeshades.

About a month from now, starting on March 5, we will launch Telework Week. Telework Exchange and Cisco promote Telework Week to raise awareness of the ease and value of remote work arrangements. Last year, nearly 40,000 people participated and collectively saved over $2.7 million in commuting costs (employee and employer savings) and reduced congestion by over 3.7 million vehicle miles and pollutants by 1,818 tons (societal savings). So far this year, we have more than 13,000 pledges already from people committed to trying telework for a week and we are still a month away from the kickoff. We also have a lot more folks teleworking this year on a regular basis, but how do we calculate the hard ROI of both the regular teleworkers and the ones who give it a try next month?

The numbers above are easy to calculate. If 40,000 people participate again this year and just half of them decide to telework all year, they would save more than $50 million a year. We also even assign dollar values to the traffic and air pollution reductions, but what about the other hard dollar savings?

Real estate savings is always an issue that surfaces in these discussions because if people work at home or elsewhere, we saving money in office space, right? The issue with real estate is that a desk is not as divisible as, say, a dollar. Economists call this issue "efficiency." If I only use 20 percent of a dollar, I can spend the 20 cents and still have 80 cents for later. But if I use 20 percent of a desk, unless someone else needs 80 percent of that desk, it may be unused. Therefore, I am really using 100 percent of the cost of the desk and saving nothing. This same problem happens even when you practice "hoteling" and make the use of desks more efficient, but then have empty offices on a floor because you can't easily reduce 20 percent of an office building. As the numbers get bigger and you do more planning over time, you can achieve some savings, but it's a longer payback.

Back to the core here. The main point is that while there are some very good cost avoidance opportunities out there, we need to look at not only what we save, but how long it takes to get the return. So here is my homework for all of you: What are all the hard ROI (quantitative) savings items you can list related to telework? And are they long- or short-term returns?

We can tackle the soft ROI quality of life, retention and recruitment, and resilience issues another day, but let's try to build a model for the cost savings so we can really see what this management tool is worth to our nation's bottom line. And help me spread the word about Telework Week so Telework Exchange has more data to crunch once we build our model.

I look forward to your thoughts and comments. You can email me at jsawislak@teleworkexchange.com or check out my blog at TeleworkExchange.com.

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