Village Green Stream

The impact of this change will be enormous.

The Current State of Virtual Work

Sixty three million Americans (45% of working Americans) hold jobs that are suitable for at least part time virtualworking.  Studies show that 26,200,000 Americans were engaging in at least some virtual work in 2011, with 2.9 million considering home to be their principle workplace.

Major corporations such as IBM, ATT&T, Dun & Bradstreet, Merrill Lynch, Ely Lilly, British Telecom, Cisco, and Best Buy currently support programs that allow many of their employees the option of working from home at least part of the time.   Recently we’ve even seen the green shoots of Virtual Corporations – companies that operate without any specific physical locus.

Given the confluence of demand and enablement, it is likely that the number of virtual workers will grow rapidly into the future.

The Value of Virtual Work

It has long been recognized that having the option to choose virtual work is appealing to employees, but the reality is that virtual work is not just a win for employees.  It is a win, win for employees and their employers.  Ultimately, it is a win, win, win for employees, employers, and society. 

Value to Employees –

Workers place enormous value on the opportunity to choose their physical places of work.    Studies show that 66% of US workers have a strong desire to have flexibility in their choice of workplaces – and those same 66% would be willing to accept a job with lower pay in exchange for that flexibility.

Employees see value that includes the ability to work in a geographic area that meets their personal desires, increased work/life balance, and reduced stress, as well as a sense of increased autonomy and control.

One of the most interesting cases for virtual work is when the employer is also the employee.    Of the 26M virtual workers, 10M are home-based consultants and contractors.  The economic events of the last several years have causes those numbers to blossom as many of the white collar workers who were laid off by major corporations found that they were best served by moving to the consulting world.   The benefits of virtual work systems are especially valuable to these workers.

Beyond these benefits, the average employee could double their vacation time – without any loss of productivity – simply by saving two to three work weeks a year in commuting time.   Beyond the time saved, studies estimate that if 50M American worked from home 50% of the time they would save hundreds of billions of dollars annually in reduced costs

Clearly, virtual work is a win for employees.

Value to Employers –

Many businesses recognize the value of virtual work as an employee benefit.

Although it is clear that employees share this view, the reality is that employers reap huge benefits from employees working virtually.  In fact, although having geographic flexibility is crucially important to employees, it is an even bigger win for employers.

A recent major study shows that if 50 million US workers spent half their time working virtually, US business would see a financial improvement of $664 Billion per year, roughly equal to the combined profit of all Fortune 500 companies.  This financial benefit would result from operational cost savings of $170B, improved productivity of $466B, and $28B in reduced absenteeism and turnover.

The ability to offer workplace flexibility is a very powerful recruiting tool.   82% of Fortune’s “100 Best Companies to Work For” offer employees the option of virtual work.   46% of HR professionals indicate that offering virtualworking is the number one or number two most powerful method for attracting top talent.  Beyond simply attracting talent it also increases employee loyalty, improves employee retention, and provides flexibility in acquisition as it is no longer critical to move the key employees from their current location to the “company location.”

The ability to provide an effective capability to work from any location is a very powerful tool when adding key part-time experts to product teams or when adding contractors to smooth out peaks in demand or to build project teams.    The team is much more likely to be built of strong components when it is feasible to select experts from anywhere in the world rather than limiting the search to those within the local geography.

Employees believe that they can work effectively from distant locations.  60% of US employees believe that they can be even more productive working at a distance and studies have shown that, in fact, 40% of employees are more productive working offsite than they are in the traditional corporate environment.

Studies have shown that on average employees who work virtually for three days a week see a 20% increase in productivity.   There are many examples of companies seeing compelling results in specific cases:

• American Express virtual workers handled 26%  more calls and produced 43% more business than their office-based  counterparts.
• Surveys and pilots conducted by IBM Canada indicate that employees can be as much as 50% more productive when they work in virtual environments.

Although it is less obvious, the potential for vastly improving Continuity of Operations is one of the largest benefits of supporting virtualworking.   An organization that has an effective virtualworking process in place has the potential to greatly reduce the impact of human attacks or natural disasters that have the potential to precipitate major interruptions of normal workflow.

For example, the US government lived through such an event during the Snowmaggedon storms that shut down Washington for four days.  A detailed review of this incident indicated that the US government loses approximately $71M for every day that employees are unable to get to work.  This $71M loss from asingle snow day would pay the costs for five years of operating a virtualworking system for the organization.

The potential for much more extensive losses is always present.  During the SARS epidemic companies in locations such as Hong Kong and Toronto suffered not only massive financial losses but also missed significant business goals as government agencies ordered workers to stay home during the crisis.    Losses that are many times larger could easily result from a significant terror attack or major natural disaster.  Having an effective virtual work program in place is cheap insurance against these catastrophic events.

Strong improvements in productivity can be shown for employees who are working from home, but similar increases can also be shown for the productivity of the efforts of distributed teams that are operating from multiple corporate locations.

Beyond these teams, most companies have a large number of key personnel on the road at any time.  Although these workers are likely to have an office in the main building they function as geographically distant team members much of the time.

Lastly, many of the tools that assist employees working in a distributed environment will also help workers who are physically collocated to work together much more effectively.

Virtual work is a major win for businesses.

Value to Society –

The benefits of virtual work to society in general are overwhelming.

Studies indicate that virtualworking would reduce travel by 91 billion miles a year which would save 1500 lives a year, reduce the strain on the crumbling US infrastructure, and dramatically reduce congestion for non-virtual workers.  This reduction in congestion would also improve emergency responsiveness and reduce the need to spend vast sums expanding the transportation network.

In addition, virtual work is one of the most practical ways of accomplishing “green” goals. The commute reduction from 50M virtual workers working 50% of their time from home would eliminate 50M tons in greenhouse gases and would save 281M barrels of oil – 46% of all the oil the US receives from Persian Gulf sources.  The savings in energy from this reduction in commuting would be approximately twice as much as is currently produced from all renewable sources combined.

Beyond the transportation-related benefits, virtualworking would also reduce pollution from road and office construction, provide fuller employment opportunity for rural and disabled residents, increase gender equality, reduce pressure to offshore jobs, and reduce targets of opportunity for terrorists.

Virtual Work is a Win, Win, Win

Virtual work may well be one of the most important drivers of social change in the 21^st century.  The reason it has such potential for driving change is that it really is a win, win, win situation and deals with a situation that has enormous magnitude.  This is a very rare situation.

There are, of course, many challenges to be addresses before the full benefits of virtual work will be realized.  More on that in future posts.