Case Study: Telecommuting

Definition and Context

We define telecommuting as the use of collaborative technologies to reduce or entirely replace traditional commuting to the workplace. Telecommuting is a natural application for the numerous collaborative technologies we have explored in this paper. Our motivation in pursuing this case study is summarized by the following quote from Alvin Toffler's book, "Future Shock": "In a country that has been moaning about low productivity and searching for new ways to increase it, the single most anti-productive thing we can do is ship millions of workers back and forth across the landscape every morning and evening."

The ability to work at home or at teleworking centers is one of the most important results of improved network bandwidths to residences. Currently, home workers can link to their offices via phones, modems, and fax machines. Improved network connectivity allows them to connect digitally, computer to computer, and pull down virtually any datafile or working document. Work groups can share documents, files and messages, interconnect to LANs or other networks, and conduct video meetings and conferences. They can function and communicate as if they were actually sharing an office. For example, a consultant in Silicon Valley uses up to 12 ISDN channels for regular CAD/CAM design collaborations with engineers in Japan using two-way desktop video, voice connections, and a shared whiteboard where all participants can annotate the computer document. How prevalent is telecommuting in any form today? There is no single widely accepted definition of exactly what telecommuting is (and even our definition is not precise enough to enable easy quantification), and there are difficulties in counting telecommuters because not all telecommuters do so all the time. Some surveys do not differentiate between people that work at home in home-based businesses and those that telecommute from their homes. In addition, the sampling methods of some surveys are different enough to make comparison and averaging impossible. As a result of these limitations the estimates in the table below vary . However, the numbers from some different surveys are quoted below, taken from The Environmental and Social Impacts of Telecommuting and Teleactivities, by J. Marcus.

Year and Source: Estimated Values:
1992 Link Resources (Telecommuting) and Mokhtarian, 1993 6.6 million telecommuters in 4.9 million households
77% white collar
59% conventional employees, 41% contract-based
19% work 35 hours or more per week at home
18.3 hours at home per week average
81% work for businesses with less than 100 employees
1987 (Fathy, 1991) 200,000-250,000 telecommuters
1985 (Forbes, 1985) 100,000 telecommuters
1984 (Kelly, 1986) 4-5 million telecommuters, including part-time telecommuters

While it is certainly true that the numbers reported in the table above are quite different in the different surveys, it is the case that the number of telecommuters is significant, and increasing.

How often do telecommuters telecommute? A survey conducted in Florida of several hundred telecommuters found the following results:

37% 1 day per week
39% 2 days per week
13% 3 days per week
8% 4 days per week
3% 5 days per week

The Case for Telecommuting

The case for telecommuting is very strong and can be classified into the following broad categories - technological factors, economic factors, human and societal factors, industrial organizational factors, and regulatory factors.

Technological Factors

In the last few years computer and communications technology has evolved to the point of allowing information and communications capabilities to be moved from the office to the home, as explained in Section XXX. This includes advances in computer equipment, software, as well as networking technologies and high-speed Internet access to homes. Some of the key technological factors that directly affect telecommuting include:
  • Advances in networking and communications technology, especially advances in residential Internet access. This includes technologies such as 128 Kbps ISDN lines,
  • Development of corporate intranets and extensions to the home.
  • Increasing availability of software for collaborations, video- and audio-conferencing, groupware products, etc.
  • In Section XXX, we describe the impact of the evolving network computer technology and the associated paradigm shift in computing on these technologies.

    Economic Factors

  • Telecommuting makes very good economic and business sense. Several studies have shown that telecommuting results in increased productivity. According to Link Resources, telecommuting can increase employee productivity by up to 20 percent.
  • Reduced real-estate and facility costs. Companies with telecommuting programs also save big on facility costs. If workers share offices, using them on alternate days for example, the amount of floor space needed for office workers is significantly reduced. IBM , for instance, recently consolidated 400,000 square feet of office space into a 100,000 square-foot facility at Cranford, New Jersey. This information is from June Langhoff's "Telecom Made Easy."
  • Human and Societal Factors

  • A lot of the improved productivity resulting from telecommuting is attributed to hard-to-quantify human factors relating to employee quality of life. These include factors such as:

    Thus, overall productivity is improved because the more desirable and attractive working conditions result in higher levels of employee motivation.

  • Time is at a premium in today's world and is one of the most sought-after commodities. It has been observed by several authors, such as Juliet Shore in "The Overworked American: the unexpected decline of leisure," that the average amount of time the average American spends at work has steadily increased over the years. For example, Shore reports that the equivalent of one month has been added to the work year since the 1940's. The hours freed up by telecommuting can be fruitfully used by employees for other pursuits, including spending time with their families, shopping, in hobbies, etc. In general, it brings up the possibility of managing the often overwhelming time commitments in peoples' lives.

    Industrial Organization and Management

  • Expansion of the labor pool. For example, New York Life Insurance has several computer programmers working from home-one of them lives in Nevada. In situations like this, it is possible to use real-time conferencing and shared workspaces to hold productive meetings and get useful work done, with incurring large travel costs.
  • Disaster management. During the Northridge earthquake six freeway overpasses collapsed, but the information lines remained intact. Telecommuting became an overnight success story because the alternative for many was getting up at 3 AM to get to work on time. In many parts of the country, snow storms and other extreme weather conditions are a regular occurrence. Having information lines to homes can dramatically increase a company's ability to recover after a natural disaster.
  • Regulatory and Legal Factors

  • Clean Air Act: In 1990, the U.S. Congress passed the Clean Air Act, which stipulates that states have top develop state implementation plans that explain how each state will do its job under the Clean Air Act. It also stipulates that every company with 100 or more employees must "reduce solo driving among their employees" [Levin94]. A state implementation plan is a collection of the regulations a state will use to clean up polluted areas. The states must involve the public, through hearings and opportunities to comment, in the development of each state implementation plan. Several states have introduced economic and market incentives for reducing pollution, in order to encourage businesses to cut down on air pollution. These incentive-driven approaches have spurred companies to find alternatives to traditional commuting for their employees. Telecommuting is an attractive possibility to reduce employee commutes ato work and is therefore being encouraged by several establishments. Thus, we see that government regulation and legislation has a direct impact on the adoption of telecommuting as a viable alternative, and therefore on the successful adoption of collaborative technologies.

  • Americans with Disability Act: The Americans with Disabilities Act, or ADA, requires employers to accommodate employees with impairments as long as these accommodations do not impose undue hardship on the operation of the employer's business. Telecommuting has been used successfully to allow employees with disorders such as chronic fatigue syndrome or multiple sclerosis to work at home and yet be an integral part of the business process and lead more productive lives.

    Various state legislatures have started taking active steps to encourage telecommuting to try and take advantage of uits various benefits. For example, the Florida Legislature has addressed telecommuting and defined it relative to state workers in Section 110.171(3) of the Florida Statues:

    "...a work arrangement whereby selected state employees are allowed to perform the normal duties and responsibilities of their positions, through the use of computers or telecommunications, at home or another place apart from the employees' usual place of work."

    Many of the personnel and legal issues raised by telecommuting need to be resolved. These include new laws to cover electronic workplace issues, covering electronic searches, workplace privacy, monitoring, network safety, ergonomics, employment discrimination, worker's compensation, and overtime. More information about these issues can be found in June Langhoff's book, The Telecommuter's Advisor."

    The Numbers

    Over the last several years, AT&T has developed Alternative Officing, a comprehensive program that currently allows 30,000 employees nationally to telecommute on a regular basis from home. This project is particularly interesting because it includes a rigorous cost/benefit analysis of their North Central New Jersey site. AT&T conducted a five year study of 600 telecommuters and concluded the following:

    The most substantial savings were in reduced real estate costs. By allowing employees to telecommute, AT&T was able to close an entire office complex.
    Annual Real Estate Savings: $6,333,124.

    In addition to hard cost savings, there were substantial productivity gains. AT&T, based on employee interviews, estimates a conservative gain of two and a half hours per employee per week in time worked.
    Annual gain due to increased productivity: $5,112,841.

    Also, employees state almost without exception that they were able to be more productive during the hours they worked, due primarily to fewer interruptions.
    Annual gain due to increased efficiency: $3,127,617.

    There were, of course, start-up costs associated with setting up employees to work at home. Office alterations averaged $3,000 per employee and computer/phone installations averaged $4,000 per employee. These costs were depreciated over five years and $1,250 per employee per year was added for phone, fax, copy and postage bills.
    Annual costs: $3,205,507.

    AT&T Cost Savings & Productivity Gains

    Real Estate Savings    $6,333,124
    Productivity Gains Hour    $5,112,841
    Productivity Gains Efficiency    $3,127,617
    Total    $14,573,582

    Less Costs (3,205,507)

    Net Annual Gain $11,368,075

    The Case Against Telecommuting

    Technological Factors

    Insufficient sense of physical presence and dearth of high-bandwidth symmetric networking technologies. This reduces the effectiveness of symmetric video-conferencing from homes involving telecommuting participants and decreases their sense of presence in the meeting or session.

    Management and Industrial Organization

    Human and Societal Factors

    For many telecommuters, the expected homelife benefits were overromanticized, and the career costs underestimated, due to the points made above. In the following section, we discuss the determinants of success, where we present possible solutions to these impediments.

    Determinants of Success

    In this section, we present some thoughts on the determinants of success of telecommuting and how the impediments may be overcome.


    We found that there are strong economic incentives for the adoption of collaborative technologies in the telecommuting sector. The benefits of telecommuting include increased productivity, reduced real estate and facility costs, labor pool expansion, and flexible working hours coupled with improved employee quality of life.

    However, despite these advantages and technology capabilities, telecommuting is not a done deal. Managerial and executive support, and changing management styles are crucial to the success of telecommuting programs in any organization.

    Future Outlook

    Distance learning