Home-Shoring Leverages the 30-Second Commute

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Home-Shoring Leverages the 30-Second Commute

More than 95 percent of Fortune 1000 companies now have formal virtual work programs that allow people to work at home, or in a place other than the office. In a survey of 32,000 companies that had more than 1,000 employees, 52 percent had formalized virtual work. These included such giants as General Electric, IBM, American Express, Hewlett-Packard, Xerox, and the United States government.

As outlined in the book Working Virtually,1 there are three key market drivers helping virtual work, or “home-shoring,” grow explosively. They are:

Real estate savings. If a company doesn’t have to house employees, it saves on office space, utilities, and other costs associated with providing a place suitable for employees to do their work effectively.

Productivity. Productivity actually increases when people work from home, typically by as much as 48 percent. As it turns out, the higher the skill level of the employee, the higher the productivity gains, ranging up to 80 percent for professional support staff.2

Recruitment and retention. In a tight labor market, competition for the best employees is fierce. Balance between work and life is increasingly important to the Millennial generation. Providing flexible working conditions attracts and helps to retain the employees everyone wants. For some types of jobs, the impact on retention can be enormous: For a call center, it reduces turnover from an average of 40 to 60 percent a year to 8 to 10 percent a year.

According to a recent survey by the research firm IDC, reported in Fortune3 magazine, approximately 130,000 people are already working from home in the U.S., and the number should increase to 300,000 by 2010. For example, a customer service company called Convergys handles a billion calls a year through various 800 numbers. It employs 60,000 people in 55 call centers. It has just 1,000 agents working from home right now, but is in the process of tripling that number. Another example is Alpine Access, a company that handles calls for J.Crew, 1-800-Flowers, and others. It has 7,500 people working from home.

According to the IDC study, employing a call center agent in the office costs the company $31 an hour. To employ the same agent at home costs about $21 per hour. For Alpine Access, that represents a savings of $75,000 an hour, or more than half a million dollars in an eight-hour workday. That provides a powerful incentive for companies to consider this strategy.

Call centers aren’t the only companies proactively hiring people to work at home...

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