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.