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Telecommuting Means Billions in Savings

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Kate Lister, the author of “Undress for Success,” has come up with some impressive figures when it comes to the amount of money that could be saved by switching U.S. employees who have jobs compatible with telecommuting to actually working from home for at least half of their working time. The bottom line, according to Lister, is a potential total saving of $500 billion. Lister’s numbers are based on the telecommuting savings calculator she’s built, using figures from the U.S. census.

Currently, less than 2 percent of U.S. employees telecommute for the majority of their work time. An estimated 40 percent of those employees hold jobs that are compatible with telecommuting, however. The savings available if all 40 percent could work from home for at least half of their work time are impressive. These are just a few of the savings that make up that $500 billion bottom line:

  • Businesses could save over $100 billion — that’s $8,300 per employee — in real estate, electricity, employee turnover and absenteeism costs. There are other potential savings in security, maintenance, parking, ADA compliance and, of course, coffee.
  • More than 218 million barrels of oil could be saved which, at the price of $80 per barrel, translates to a savings of $17 billion, and could reduce Persian Gulf oil imports by 28 percent.
  • Employees could save between $3,400 and $10,500 in transportation and other work-related costs, not including eliminating daycare or taking account of the home office tax breaks that many telecommuters are eligible for.
  • More than 73,000 people could avoid traffic-related injury or death, together with almost $8 billion worth of accident-related costs. Telecommuting won’t wipe out traffic accidents, but it could make a dent in the numbers.

The calculator does account for factors like the increased costs associated with working from home and those employees who may make the switch to telecommuting but have already brought down transportation costs by using public transport or car pooling.

Of course, the likelihood that 40 percent of employees will make the switch to telecommuting in the near future is very low. But it’s important to keep in mind the savings available both for the country as a whole and for individual companies. These numbers can make for a compelling argument if you’re working on convincing an employer to let you work from home on a regular basis, or you’re trying to get a corporate telework pilot plan approved by senior management.

You can read more about Lister at her site, the Telework Research Network. She also provides a variety of telecommuting resources, including information on telecommuting opportunities.

Related GigaOM Pro content (sub. req.): Enabling the Web Work Revolution

Image by Flickr user Sean Dreilinger

10 Responses to “Telecommuting Means Billions in Savings”

  1. Shyanne

    Most of us with an average level of intelligence know the advantages to working from home and how much the increase in employee morale alone would skyrocket. I work for a state government who has offered telecommuting for years but the big cheese at my department put a stop to it when she was hired. There are some managers out there who’s maniacal ego’s would implode if they could not watch their employees walk into the office while they watch the clock, or take their every hour on the hour walk through the cubicles making a head count and checking all the computer screens. Never mind that our production numbers were always very high and management could always tell if an employee was or was not getting their work done through computer reports.
    This cheese head told us at her first meeting with us that under her watch there would never be any of that nonsense of working out of the office. We did not do it every day. There were not enough cubicles for all workers so half of us would work two days at the office, and three days in; then the next week the co-worker we shared a desk with would switch days in and out of the office. You should see the mess she’s made trying to find a place of all of us to work, having to share phones and there is absolutely no privacy. In our line of work (we work with the public who are eligible for public assistance) all information on clients is supposed to be private but it is not. In the last 3 years our office has gone from one of the highest producing regions to the lowest in the state. We have no idea why upper management has let her continue with her Gestapo tactics.

  2. Saving Money ? what are the impact on the economy ?

    What about the millions of jobs that depends of local workers, restaurants, bakery, coffee, food delivery, shops.
    What about transportation ? Train, car manufacturers ?

    Also it might work if you have a reliable and competitive Internet provider market, things you find in Europe in France but not in USA.

    While my job (R&D in IT) is well suited for telecommuting

    In Manhattan I had the choice between one Cable and one DSL provider.
    Most of the time in DSL:(Kbits/Sec) 3300 864
    In the middle of a city where Millions of people live !
    it does limit your VOIP and VPN… no way I could reliable work in those conditions.

    Same in the Silicon Valley ! Both with pathetic speed (8Mbs are you kidding ? in Cupertino !!)

    Now I live in Florida, it is even worst, small ISP that caps my internet connection !

    Telecommuting, well maybe if your work don’t require an internet connection … Lucky you…

  3. Whoa. These are some excellent numbers. You know, if the government gave people an incentive to do that they actually might be able to pay off some of their trillions of dollars in debt eventually.

  4. While these numbers are impressive, I think the cost savings of teleworking are well understood and accepted. The challenge, of course, is everything else: cultural change, mitigating the loss of in-person informal communication, etc. That said, it is interesting to see how the financial and other material benefits add up.