Telework's Return On Investment

The Telework ROI dilemma: who makes the investments, who gets the returns, and when?
[This page is based on one originally published on David Fleming's Web site.]
by Jack Nilles

For whatever reason, but mostly because of human arrogance, we have a very distorted accounting system when it comes to evaluating the value of telework and most other complicated artifacts. For starters, we ignore many of the stakeholders in the products or processes, or completely discount their investments and interests in the outcomes of our actions. In fact, we normally concentrate our attention solely on the stakeholders with current economic power. Here are some brief examples, by no means a comprehensive list:

Investments/Costs Returns Timing
Teleworker employers Up front cash for administration, training, and technology, continuing operating expenses A variety of cost savings and profitability increases typically averaging about half of each teleworker’s salary Return on up front investment is one year or less, gravy thereafter
Teleworkers Some up front costs for equipment, time investments in training, some loss of discretionary space for home-based teleworkers Reductions in cost associated with commuting, significant stress reduction, increases in feelings of self worth and control Immediate after beginning teleworking, tending to grow somewhat with experience
Co-workers Some time spent in orientation, learning new communications and organizing skills Short term stress increases, but longer term stress reduction, increased confidence Parallels that of teleworkers
Teleworkers’ families Some time spent in accommodating to a new daytime presence Major improvements in communication quality between family members Parallels that of teleworkers
Commuters None Appreciable reductions in commute congestion in heavily congested areas as daily teleworking grows to exceed about 3% of total commuter vehicles Depends on rate of acceptance of telework in the region
Transportation industry Currently spending billions annually to maintain/expand infrastructure to support commuting; teleworking may be considered a threat to further industry growth (but then, so is disappearance of space for more roads) Diminishing as teleworking increases Number of US telecommuter should grow to 40 million by 2010 AD, saving about 160 billion passenger-miles in commuting, with comparable reductions in fuel use, air pollution produced, roadway wear and tear
Telecommunications industry Billions in R&D, implementation of new services and infrastructure, most of which has some utility for teleworking Market growth, cash flow increases, but hard to segregate from non-telework related revenues ROI could be in months; however, industry tends to get in its own way in rollout of broadband technologies
Computer industry Marketing costs include promotion of telecommuting; teleworking-specific product developments for remote access hardware/software Market growth, cash flow increases, but hard to segregate from non-telework related revenues (except for remote access) ROI generally within a year
People with breathing disorders None Decreased risk from clogged airways, premature death as pollution is reduced As above
People with mobility impairment Time spent learning computer skills For many, entry into the workforce, significant psychological improvements Depends on the rate at which employers accept the phenomenon
Police None, except for teleworking personnel Decreases in property crime, stress-induced crimes (assaults, road rage, etc.) Proportional to rate of growth of teleworking
Rural communities Investment in infrastructure to support teleworking; PR to attract teleworkers Revitalization of the communities as teleworking families move in (or decide to stay) Tracks national growth of telework, but with a few years’ lag in most places
Chronically Unemployed Investment in learning new information skills, self discipline Entry into the workforce, significant psychological improvements, community revitalization in "ghetto" areas Depends on the rate at which employers accept the apparent risks

The point is that there is considerable dispersion of returns; the stakeholders who make cash investments generally require returns thereof in a fairly short time. Yet the benefits of those investments accrue to many other stakeholders whose own investment may be relatively small.

A key issue is whether there should be more public sector investment—tax derived investment for the common good. The transportation infrastructure has huge public investments—in expanding the infrastructure, maintaining it, and combatting its ill effects, yet telecommuting has almost none despite the fact that more than 20% of the US workforce currently engages in it.

What should be done, who should do it, and when?

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Last modified: Monday September 26, 2011.

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