Traffic surrounding Microsoft headquarters in Redmond, Wash., has become so congested that Washington State Governor Chris Gregoire nearly missed a 9 a.m. speech at the company's main campus one recent morning. Roads leading to the software maker simply weren't designed to handle the 35,000 commuters who report for work there each day. The gridlock that greeted Gregoire was just the latest reminder that Microsoft needs to tackle its commuter crisis—and quick.
So Microsoft (MSFT) has embarked on a program aimed at getting more employees to work from home and other off-site locales, joining the growing ranks of companies to catch the virtual-workplace wave. About 14% of the U.S. workforce gets its job done at a home office more than two days per week, says Charlie Grantham, executive producer of consulting firm Work Design Collaborative. That's up from 11% in 2004, and is set to grow to 17% by 2009 (see BW Online, 03/12/07, "Telecommuting Now and Forever").
Pros and Cons
Benefits of letting employees work from outside the office include keeping cars off the road, helping a company to bolster its green bona fides. But the practice can also foster employee retention, boost worker productivity, and slash real estate costs. At IBM (IBM), about 42% of the company's 330,000 employees work on the road, from home, or at a client location, saving the computer company about $100 million in real estate-related expenses a year. VIPdesk, an employer of at-home customer-service reps, hangs onto 85% of its employees each year, compared with the 10% to 20% rate for traditional call centers, according to consulting firm IDC. And virtual workers are about 16% more productive than office workers, according to Grantham's research.
For all the benefits of freeing workers from the office, drawbacks abound. First, not everyone wants to leave. Some fear they will step off the corporate ladder, while others need a busy environment to stay productive. Some managers are reluctant to scatter direct reports because keeping tabs on a virtual workforce can be harder than managing those close at hand. Some virtual workers can feel lonely, isolated, or deprived of vital training and mentoring. And communication breakdowns can impede innovation, trust, job satisfaction, and performance.
Obstacles like these have prompted IBM, Sun Microsystems (SUNW), and other companies to seek out a host of creative solutions to the problems that virtual work presents. Some turn to a combination of mobile devices, e-mail, instant messaging, and collaboration software to help colleagues stay in touch.
Some Are Reluctant
But experts say successful companies go a step further, adopting a whole virtual-worker ethos. "Management by objective is critical," says Ann Bamesberger, vice-president of Open Work at Sun. "If you have to manage by monitoring, it's not for you." A number of companies including Deloitte & Touche, Ernst & Young, IBM, and Sun have also revamped office space to better accommodate virtual workers, providing everything from cubicles to conference rooms for employees who only occasionally stop in (see BusinessWeek.com, 7/2/06, "Square Feet. Oh, How Square!").
While many relish the chance to strike a better work-life balance by working from home, some are surprisingly resistant to being stationed outside the office. Of the approximately 25% of workers who could feasibly telecommute, less than half would do so more than two days a week, and 14% wouldn't telecommute at all, according to a survey conducted by research firm Rockbridge Associates and the Center for Excellence in Service at the University of Maryland's Robert H. Smith School of Business.
This reluctance may be fueled by fear that if they're out of sight, they will be out of mind, too. About 61% of global executives say they think telecommuters are less likely to advance in their careers, compared with employees in a traditional office setting, according to a survey conducted by Futurestep, a subsidiary of Korn/Ferry International (KFY).
Even workers who are eager to telecommute encounter hurdles. Many managers simply don't know how to manage a virtual workforce. "Projects fail, and companies assume that the workers can't do the work," says Colleen Garton, author of Managing without Walls. "But a high percentage of time, it's the manager." Over time, some employees begin to feel isolated, and virtual teams suffer from communication breakdown.
For virtual workers, there are plenty of ways to stay in touch, be it through e-mail, phone, or instant messaging. The trick, say experienced virtual workers, is helping managers know how employees like to communicate. When Kathleen Timiney worked at Groove Networks, a software maker acquired by Microsoft in 2005, she asked each team member how they preferred to communicate and posted those preferences where everyone could see them. "It's not just superficial," she says. "You have to support people in their style."
IBM discovered that workers who spend three or more days without talking to a manager or colleagues start to feel disconnected. "Employees used to feel that IBM meant 'I'm By Myself,'" says Dan Pelino, general manager for health care and life sciences at IBM. "We learned that it was important for managers to understand that people feel that way and to create new collaborative environments and to ask what they're doing." IBM teams use tools that provide customizable online team spaces, or portals that can be tailored to a specific project—complete with calendars, task lists, discussion forums, and document libraries.
Tools for the Virtual Craft
Other companies, including Microsoft, WebEx (WEBX), and Citrix (CTXS), also specialize in online conferencing and collaboration software that makes it easier for people in different locations to work together and conduct meetings. When Microsoft's Timiney worked at Groove, the company set a policy that if even one person was operating virtually in a meeting, then everyone would sit in their offices and the entire meeting would be virtual. "Because there's a big sensory difference in that experience, it made sure that everyone was on a level playing field," she says.
Another way to bridge the physical distance is to provide a worker with the tools needed to stay connected to colleagues. For the virtual worker, a laptop, high-speed Internet access, and a personal digital assistant or mobile phone are de rigueur. But some companies go an extra mile to outfit virtual employees.
IBM provides a universal messaging service that lets executives give a single phone number to clients and colleagues. The service then forwards calls to wherever that executive might be located, be it at home, on cell phone, or in a so-called eMobility Center, one of the temporary offices set up by IBM in locations around the world. Patrick Boyle, director of health-care and life-sciences sales at IBM, spends about half his time traveling, working from taxis, airport lounges, planes, and coffee shops. He's also a frequent user of eMobility centers and considers headsets an essential tool of the trade. Microsoft's Timiney says a quality headset is her most important tool.
Temporary Office Space
Some virtual workers at Sun use the company's line of workstations, called Sun Ray clients. Unlike conventional PCs, these devices contain no hard disk or operating system. Instead, all the software resides in the company's servers. That means all information is automatically backed up and stored securely—and won't be lost in the event the desktop is stolen or irreparably damaged. No software on the desktop also means fewer frustrating calls to tech support, says Larry Ciraulo, director of client computing services for Sun IT.
About five years ago, Sun realized that its offices were empty about half the time, as workers were out traveling or at meetings. So the company began encouraging workers to work from home and created a network of temporary offices, similar to IBM's eMobility centers, that can be reserved ahead of time. Over the last five years, Sun has saved anywhere from $300 million to $500 million, mostly in real estate costs. Sun also offers consulting services to help other companies that want to create flexible workspaces.
IBM's eMobility centers feature cubicles and conference rooms equipped with the usual easels and whiteboards. They boast cafes with wireless access, so workers can meet informally as well. IBM realized at one point, however, that it needed to redesign the conference rooms to include clear glass. "Virtual workers want people to see them when they come into the office," says IBM's Pelino.
New Hires: Presence Required
It's one thing to ask a seasoned employee to work from home, but a virtual work environment can be tough on young workers who are trying to learn their jobs and often try to develop friendships at work. "I wouldn't want a person to come into a virtual environment as a new employee—mentoring is absolutely critical with new hires," says Sun's Bamesberger.
Often, Bamesberger will require that a new employee work in the office for a period of time before going virtual. "I personally think that learning requires some exposure to other human beings," she says. Similarly, Convergys (CVG) asks call-center workers to come into the office for training and the first month of work before they start working from home. The company now employs about 60,000 call-center workers, about 850 of whom work at home.
Sometimes virtual workers simply miss that informal advice that colleagues give in an office setting. At IBM, the company has tried to make sure virtual workers receive needed coaching and mentoring. That can range from a sales exec getting advice from a colleague before an important sales call to more formal events at the office, where senior executives run roundtables.
As Microsoft establishes a formal virtual-work program, the company will likely have no trouble with the technology part of the equation. "Nearly 100% of our people have at some time worked virtually," says Lisa Brummel, senior vice-president of human resources at Microsoft. Indeed, the company makes many of the tools that virtual workers need. Yet, figuring out how to use that technology wisely in a virtual environment requires a bit more thought. Microsoft can just ask IBM's Pelino, who cautions, "We learned from trial and error." Until then, beware traffic jams in Redmond.
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