Home telework cost-benefit example

Home-based Telecommuting Cost-Benefit Analysis

This is a simple sample cost-benefit analysis for home-based telecommuters as seen from the employer's point of view.
[For an analysis of telework center-based telecommuting click here] The example shows the main factors that should be considered if you are a manager analyzing the potential of teleworking for your business—or if you are a teleworker hoping to convince management to allow you to telework from home.

If you wish to try this analysis using your own data click here.


SAMPLE COST-BENEFIT ANALYSIS FOR HOME-BASED TELECOMMUTING (At end of first year of telecommuting)
Copyright © 1993-2008 by JALA International, Inc. All rights reserved. Use or reproduction of this file is free for non-commercial purposes. Assumptions: Average annual salary: $40,000
Telecommuting days/week: 1.5
COSTS TO EMPLOYER per TELECOMMUTER
DIRECT COSTS ONE-TIME RECURRING (Annual) NOTES
Selection and Training $175   Both telecommuters & supervisors trained
Telecommunications      
—New Installations $460   Phone line and modem
—Services   $960 Will vary, depending on need for telecommunications, local tariff structure
Computers $500 $75 Cost of docking station, extra monitor, laptop instead of desktop computer
Moving Costs      
Computer Equipment $0   Usually zero if employee handles this
Renovation/Installation $0   Some employee-specific materials, lock boxes, etc.
Facilities Leasing   $0 Assumes employee reports to principal office on non-telecommute days
Furniture Purchase/Lease $900 $0  
Insurance   $70 Annual equipment liability
Equipment Purchase/Rental Costs $300 $0 Inkjet printer
Performance Evaluation $700   Will vary, depending on level of detail required
TOTAL DIRECT COSTS $3,035 $1,105  
       
BENEFITS TO EMPLOYER per TELECOMMUTER      
DIRECT BENEFITS      
Increased Employee Effectiveness   $6,000 Average 15% relative to non-telecommuters @ 1.5 days/week
Decreased Sick Leave   $348 2 days per year reduction; 230 work days per year
Increased Organizational Effectiveness   $800 Average about 2%
Decreased Turnover Rate   $2,000 Equivalent to 5% of salary in search and training costs avoided
Reduced Parking Req'mts   $360 30% reduction in $100/month space requirements for non-carpooler
Office Space Savings   $3,240 150 square feet @ $6/month per square foot proportionally reclaimed
TOTAL DIRECT BENEFITS $0 $12,748  
       
INDIRECT BENEFITS      
Decreased Air Pollution     Put your own number here for compliance with Air Quality regulations
Increased Competitiveness     Put your own number here for the effect of your new productivity
TOTAL INDIRECT BENEFITS      
       
ANNUAL NET BENEFITS   $11,643 Per telecommuter with these characteristics
FIRST YEAR NET BENEFITS   $2,786

Try this analysis with your own data.


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Last modified: Monday September 26, 2011.

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