The Bottom Line Benefits of Telework

Putting a value on the shifting nature of work in the UK

Employers who allow telecommuting 2 days per week on average realise a 20% increase in productivity, save 15% in real estate costs, and see a 7% reduction on absenteeism according a new study by the US-based Telework Research Network (TRN).

The report, titled The Shifting Nature of Work in the UK, concludes that current regulations that promote home-based working and other forms of flexibility as a special accommodation for parents are outdated.

The UK ranks 12th among EU nations in percentage of employees who regularly work at home. While 12.8% of the workforce as a whole work mainly from home, only 4.9 per cent of the labour force do so despite two-thirds of UK jobs being telework compatible. It seems it’s increasingly normal for the self-employed to work from home, but UK employers are lagging behind and not seeing the opportunities.

Those companies that have successfully integrated telework have found it is good for business, good for employees, good for the environment, and good for the economy.  And this report puts numbers on the benefits.

Measuring the impacts

The report divides the impacts up into several different areas, and uses data from a wide range of sources to calculate the impacts.  The areas of benefit are:

• Employer Benefits
  • Productivity Impact
  • Real Estate and Electricity Impact
  • Absenteeism Impact
  • Attraction and Retention Impact
• Employee Benefits
  • Petrol Expense Impact
  • Other Work Expense Impact
  • Time Savings
• Community Savings
  • Oil Impact
  • Greenhouse Gas (GHG) Impact
  • Traffic & Accident Impact
  • Other Community Benefits

In each case the report sets out its assumptions about uptake and sources of base data and makes calculations for the impacts.

Employer benefits

The main employer benefits come from increased productivity:

(teleworking 2 days per week, for 50 people, 100, 500 and by
% of UK workforce who could telework 2 days per week)

reduced property costs - providing they switch to desk-sharing:

and reduced absenteeism:

Overall, employers could save around £3k per 2-day teleworker per year.

The authors also argue that the government should. take a lead - having civil servants work from home on average 2 days per week could generate an annual 1.25 billion saving in property costs.

Employee benefits

On average, home working just 2 days a week would save employees between £220 and £2,900 per year—the result of reduced driving and fewer work-related expenses (food, clothes, parking, petrol and other vehicle costs for drivers, and rail/coach fare for other commuters).

Across the UK that would add up to total employee savings of between £4.7 billion to £18 billion a year—money that could go toward savings or be reinvested in the economy.

Twice weekly home working can add up to 4 working weeks of free time a year.  Other studies have found that teleworkers tend to split the saved time between work and home activities - it's a key factor in studies that report increased output from homeworkers.

Community impacts

In this study 'community impacts' includes wider social, economic and environmental impacts, such as reduced oil imports, accident reduction and greenhouse gasses. Headline benefits include:

• 15 million fewer barrels of oil imported

• Reducing greenhouse gasses by 6.2m tonnes of CO2 per year, equivalent to taking 2.5 million cars off the road

• Prevent over 28,000 traffic injuries and deaths each year and save over £900 million a year in accident-related costs.

Can we believe it?

The report is the first to attempt to measure the potential impacts across such a wide range of indicators.  And in doing that it raises many issues.  Whenever studies attempt to aggregate impacts up to national or international level, there are always questions about the assumptions, the base data and the methodology.

But the approach is a valid one.  The assumptions and data sources are spelt out.  It provides an excellent starting point for people who want to challenge the data and assumptions, and find ways of testing it.

Meanwhile, for companies and individuals, there is much food for thought here about how to improve company performance and how to improve quality of life.