Telecommuting is a work arrangement for which an employee is allowed flexibility in their working location and hours. Its main purpose and advantage is that it reduces the need to commute to a central place of work. Instead, the employee works at a remote location (such as their home) while in contact with the workplace through telecommunication links, such as video conferencing.

Technology[edit | edit source]

By definition "telecommuting" means replacing an employee's regular daily commute to work, in a personal car or public transit, with virtual communication. This communication could take the form of e-mails or phone messages, although most businesses will generally link employees through a remote network access. This allows them access to data stored on a company network. In the interest of security, a Virtual Private Network (VPN) is usually used. A VPN allows employees to securely access the company's network through making use of an insecure network such as the Internet.

Long distance telework is further facilitated by the progressive decrease in cost of telecommunication and improvements in personal computers (such as Laptops and Wi-Fi adapters). With the increasing availability of tools such as groupware, conference calling, videoconferencing, and Voice Over IP (VOIP), the need to physically travel to a centralized place of work diminishes further.

Advantages[edit | edit source]

To the employer[edit | edit source]

  • Reduces the need for office space, resulting in reduced company costs (less utilities consumed, less required parking space, less required work space, available office space can be shared by multiple employees by "office hoteling").[1] On average, in 1995, energy costs were $1.51 per square foot of office space per year (with larger commercial buildings at about $1.19 per square foot per year)[2]. AT&T reported that $550 million in cash flow had been made between 1991 and 1998 due to telecommuting employees.[3]
  • An agency may find that by offering the flexibility to work from home, they can hire back a retiree with the right specialized experience to do a job on a part-time, rather than full-time, basis.[4]
  • When properly managed, can increase employee efficiency.[5]
  • In the event of a disaster, where workers can no longer use or reach their office, telecommuters are able to continue business.
  • In the event of employee sickness or personal issues that don't allow them to travel, work can still be done.

Office hoteling[1]can be taken advantage of by the employer in order to reduce office space requirements as each office can be used by multiple employees on separate days.

To the employee
[edit | edit source]

  • Travel time is reduced
  • Fuel consumption is reduced
  • Convenient
  • Reduced work-family conflict
  • When properly managed, increases job satisfaction and reduces stress
  • Increased mobility: more likely that one can move to another location without losing one's job
  • Reduced involvement in office politics that may affect job satisfaction or disrupt the work setting

Other[edit | edit source]

  • Reduces traffic, which results in: better driving conditions, fewer accidents, reduced congestion, reduced road maintenance costs, faster commutes, and more efficient fuel consumption.
  • Reduces greenhouse gas emissions.
  • Preserves the environment by reducing the need for large offices and large highways.

Balancing between employee and employer[edit | edit source]

It is important for telecommuting that both the employer and employee agree upon what the employer will provide in terms of resources. For example, will the employer supply a computer, or will the employee? What amount of internet and phone bills will the employer pay? A list of common resources that need to be considered are listed below:

  • Computer and peripherals (fax machine, scanner, printer, etc.)
  • Internet connection and broadband allowance
  • Extra phone line(s)
  • Printing paper, ink, and other small office supplies (pens, rulers, etc.)
  • Office desks and chairs
  • Software licenses

Another important question is whether the company will handle the installation and removal of such equipment or not.

California Pilot Project[edit | edit source]

The state of California ran a pilot project to determine the impacts of home-based telecommuting on travel behaviour and personal vehicle emissions. The authors compared participants' travel behaviour before and after telecommuting, and found a 27% reduction in the number of personal vehicle trips, a 77% decrease in vehicle-miles-traveled (VMT), and 39% (4%) decreases in the number of cold (hot) engine starts. The authors determined that these decreases translated into emissions reductions of: 48% for total organic gases (TOG), 64% for carbon monoxide (CO), 69% for nitrogen oxides (NOx) and 78% for particulate matter (PM).[6]

The number of personal vehicle trips and VMT partitioned into commute-related and non-commute-related purposes revealed that non-commute personal vehicle trips increased by 0.5 trips per day on average, whereas the non-commute VMT decreased by 5.3 miles.[6]This finding supports the hypothesis that non-commute travel generation is a potential negative impact of telecommuting, though this small increase in non-commute trips has a negligible impact compared to the overall travel and emission savings.

Cas well & Associates[edit | edit source]

Cas well & Associates, in Bloomfield Hills, Mich. , was a $650,000 firm that decided to give up its 1,700-square-foot office space, and instead gave each employee their own home office.

Cas well reported that the cost was $200 to $500 a head for modems and extra phone lines; each new employee also required a computer and a fax machine, at a per-employee total cost between $2,000 and $3,000. Since the transition, Cas well's phone bills doubled, but the company claims that all the total costs didn't come near to their previous rent of over $3,000 a month.[7]

Limitations/Concerns[edit | edit source]

Limitations and concerns of telecommuting can include:

  • Employees fear the isolation. From Kurland & Cooper, 2002: "Professionally, employees fear that when they're out of sight, they're out of mind for promotions and other organizational rewards. Socially, employees comment that they miss the informal interaction they garner by being around colleagues and friends".[8]
  • Research has shown that managers fear they lose control over employees' behavior as employees gain autonomy by telecommuting.[9]
  • Safety concerns over the equipment or data provided to the out-of-office employee

Telework Associations[edit | edit source]

A number of associations have been established to help advance the growth and success of work independent of location through online resources.

Literature Review[edit | edit source]

A full literature review was conducted prior to creating our ECM. It can be found here: Telecommuting Literature Review

Energy Conservation Measures (ECM)[edit | edit source]

The following telecommuting ECM prepared for Mech425 GreenIT Project can be used to determine the monetary costs and savings, as well as the greenhouse gas emission savings, derived from implementing a telework system. A copy of the ECM can be found here: File:Mech425 greenITProject Telecommuting ECM.xls.

The attached is most up to date. Please be mindful in the environmental section, total savings are assumed same every year and are summed cumulatively in the green cells that follow.

References[edit | edit source]

  1. 1.0 1.1 ["'Hoteling': Employees share desks as they check in to work". Central Penn Business Journal. 06 Feb, 2010. qa5295/is 199804/ai n24334137/ Copyright Journal Publications Inc. Apr 17, 1998]
  2. <"A Look at Office Buildings: How do they use energy and how much does it cost?" (2001). howuseenergy.htm U.S. Energy Information Administration Independant Statistics and Analysis.
  3. [ Apgar, M. (1998). The alternative workplace: Changing where and how people work. Harvard Business Review, 76(3), 121-137.]
  4. [Polcastro, Mike. "Wages, benefits and tighter belts: agencies must not overlook the impact of pay and perks on their bottom line." Best's Review 110.8 (2009): 64. Academic OneFile. Web. 6 Feb. 2010.]
  5. [Shafizadeh (P.E.), Kevan R., et al. "Costs and Benefits of Home-Based Telecommuting: A Monte Carlo Simulation Model Incorporating Telecommuter, Employer and Public Sector Perspectives." Journal of Infrastructure Systems 13.1 (2007): 12-25. [1]]
  6. 6.0 6.1 [Koenig, Brett E., Dennis K. Henderson and Patricia L. Mokhtarian. "The Travel and Emissions Impacts of Telecommuting for the State of California Telecommuting Pilot Project." Transportation Research Part C: Emerging Technologies 4.1 (1996): 13-32. Available on-line at: [2]]
  7. [Christopher Caggiano. "Five Ways to Save Money on Office Space" Mansueto Ventures LLC. July 1, 2000. [3]]
  8. [Nancy B. Kurland, Cecily D. Cooper, "Manager control and employee isolation in telecommuting environments", The Journal of High Technology Management Research, Volume 13, Issue 1, 2002, Pages 107-126.[4].
  9. [Tomaskovic-Devey, D. and Risman, B.J. "Telecommuting innovation and organization: a contingency theory of labor process change." Social Science Quarterly 74 2, 1993, Pages 367–385.]

Discussion[View | Edit]

Mech 425 Green IT Project: ECM Feedback[edit source]

Approdia Page Feedback[edit source]

  • The page looks great, well communicated, the only problem i see is that the literature review might be linked wrong. I am not sure if your lit. review and ECM are two different documents or the same.

Great page - very nicely communicated and comprehensive; someone with no prior knowledge of the concept will have no problem getting a handle on it. A couple of things needed some slight re-wording; I changed those directly (no important content was touched). The inclusion of the pilot project and the telework associations was great.

Same question as the above person regarding the lit review; are you just refering to the References section in your ECM? You might want to consider including your sources in a separate section on your Appropedia page, with the addition of some links so that someone searching for related information can find your page – this will facilitate the sharing of information.

Overall, nicely done.

--BD 21:36, 10 February 2010 (UTC)

Just a couple points: What exactly do you mean between as conditions are more favorable for the employee? Also, the wording is weird under limitations when you discuss career advancement.

Looks good though.

--A.Dacho 03:44, 11 February 2010 (UTC)

ECM Feedback[edit source]

  • The "Cost of Internet per Employee" is that just the total cost of internet services for your company divided by the total number of employees? And units might be nice. (i.e. [$/person])
  • A little bit more explanation on the input page would be good. The last input "block" where "phone", and "keyboard" are listed, what are they? are they capital costs of hardware to set up a home office? or something else?
  • Consistency on units might be nice as well. Doesn't really effect the out come but just makes it nicer to read through. (i.e. make all cells that denote cost formatted as "currency")
  • Maybe note somewhere other then just on the "projected Savings" page, the total capital and operating costs of the equipment
  • Not sure what is going on but the IRR formula doesn't see to be kicking back a number
  • Are the plots of "Total CO2 savings" and "Oil Savings" cumulative or just net per year?
  • Could add a plot of net and cumulative money savings

On your INPUT page, you write in the first person (“we have assumed”, etc.) – I suggest using the third person uniformly across your file as it sounds more professional (you did it when listing most of your assumptions, just not all of them).

The EXECUTIVE SUMMARY page can use a bit of work. I also suggest including some figures in there; it’s nice to see one’s economic benefits illustrated. The IRR did not display a value, only an error.
Nice summary at the bottom of the PROJECTED SAVINGS page.

The graphs of the environmental savings projected over 10 years is great on the GRAPHS page, but what about the financial savings?

--BD 21:36, 10 February 2010 (UTC)

This is perhaps a finicky thing, but on your input page, you could probably indicate whether the Cost per square foot, cost of internet, cost of training etc. are monthly or annual costs.

Not sure if anyone has mentioned this, but I think the reason your IRR calculation is resulting in error is that all of your cash flows are positive (no way that Present value could = 0).

Looking at your Executive Summary page, it doesn't make sense to me that your Net Cash Flow is the same every year. It seems from what I have read so far that there would be capital costs in the first year (phones, internet setup fees, etc.) that would not be repeated in future years.

One more comment about the Executive Summary page: I don't think that in general you can calculate Payback time by dividing Year 1 Net Cash flow by Baseline Net Cash Flow.

I noticed on your calculations Projected Savings page that many of your cell references link to a different worksheet. I'm not sure if this is just a problem with my computer, but the values on the Projected Savings page are not changing when I update the Inputs page.

In the Costs box, it appears that "Direct Costs" and "Total Cost to Employer per Telecommuter" are always equal. Are both rows necessary?

I actually don't know anything about this, so just don't pay any attention if this is wrong. It strikes me that $6000 of increased employee effectiveness due to telecommuting might be a bit optimistic.

Cell D35 on the Projected Savings Page, "Cumulative Net Cash Flow" for the Baseline Year, you are referencing the Total Cash Outflow cell rather than the Net Cash Flow cell. I think it should be the latter.

When doing your Discounted Cash Flow, you need to find the Present Value going all the way back to year 0. For example, for your Cash flow of 10088.82 in Year 4, you need to discount at 3.26% for 1 year, 2.06% for 1 year, 0.49% for 1 year and 0% for one year. See the example in File:ECM006 travel - videoconferencing Dec11.xls.

Looks pretty good! --Dloates 13:31, 11 February 2010 (UTC)

Watch printer margins! "to and fro" should be "to and from"

Link the projected savings and graphs tabs as references You have a "change" marker with round trip commuting. Is this special or why is that there? Is the telecommuter salary per year? (say so) Training Costs should be in $$. What is home office this a title? Should the monitor phone etc be in $? It might be nice to have a title on the side or above each of the four groups. Also, watch your outline formatting on the bottom line of the boxes.

Projected Savings
Colour coding would be nice. Same with a formula next to the inputs, ie lable the different lines A,B,C=A*B, etc. It would make your spreadsheet more clear. What is Marginal Heating/Cooling? It's not linked. Same for Subsidization of employees, home internet subscription etc. If these can be input, there should be a link to the inputs tab. If not, where do you get the reference from? An explanation of the page would be useful at the top. Total cost to employer should be a sum not just linked directly above. One time costs need to be linked somewhere where the user can input that number. Total benefits per telecommuter should be in allcaps and should be the sum of D20:D27. It might be a good idea to have the inputs that you are taking from the input page actually on the projected savings page but highlighted in a don't change colour and linked to the input page. It would make it easier for the person going through to follow.

Why are the direct costs on the ECM twice? Same with under the COSTS heading?

Enviromental impact, looks good, format isn't consistent with above. You should add in your final numbers at the bottom of that section too though!

The conclusions look nice.

  • you didn't calculate the irr? or NPV

Executive Summary
-capitalize title "ECM Focus" maybe summary would be better? -graphs would be good. -you might want to add in your parameters in a story like fasion but with auto updating links.

-label axis and main title

Assumptions and References
-why is part of the Ref section in orange?

Overall it looks good!

--A.Dacho 04:18, 11 February 2010 (UTC)

Overall[edit source]

  • Really well done. assumptions and references clearly stated the concepts of the ECM are well communicated. The executive summary needs a very small fine tuning and the addition of a plot or two will really help the end result. Great work.

Very nicely done! Just some small touch-ups and it should be good to go.

--BD 21:36, 10 February 2010 (UTC)

Hey! Looks really good. You've done some good research. I just fixed one spelling mistake directly. Other than that, the only question I had was whether the rent quoted in the Caswell case study was monthly (the figure looks like it is a monthly figure). Overall great job and well communicated. --CB

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