Driving Forces Behind Telecommuting The American Experience
Potential Benefits to Society Technology Issues
The Changing Role of Central Cities Private Sector Trends
Related Party Initiatives Recent Public Sector Activity
Labor Relations Considerations Related Federal Initiatives
The First Wave:  International Benchmarking Telework Pilot Project Home

The following information has been taken from the March 1995 Interim Report: Federal Interagency Telecommuting Centers, issued by the General Services Administration, Office of Workplace Initiatives. The report was prepared and transmitted to Congress as an interim progress report on telecommuting centers established for use by federal employees in the greater Washington, D.C. area, in accordance with the provisions of Public Law 102-393; 106 Stat. 1745.

Both the National Performance Review (NPR) and President Clinton's Climate Change Action Plan identify telecommuting as one solution to accommodate the demand for increased mobility and to enhance worker satisfaction. Indeed, President Clinton's memorandum of July 1994 on expanding family-friendly work arrangements directs federal agencies to support telecommuting and satellite work locations throughout the Executive Branch.

Recent government studies also underscore telecommuting's favorable impact on transportation, energy, and environmental goals and the role played by the national information infrastructure (NII) in furthering these outcomes.

"... Investments in telecommunications infrastructure that facilitate telecommuting should not only lead to ... transportation benefits, but may also have a synergistic ... effect on other transportation strategies ... required to cope with growing traffic congestion, urban air pollution, and national petroleum dependence (Energy, Emissions, and Social Consequences of Telecommuting, p. xiii)."

The term telecommuting, as employed in this report, refers to a means of performing work away from the principal office - typically at home or at a nearby telecenter. Home-based telecommuting, which has been occurring worldwide for more than twenty years, often requires no more than a telephone and notepad. Yet, those who work at home oftentimes lack the sophisticated office technology that allows full access to information and speedy communication.   

Driving Forces Behind Telecommuting

Three principal forces drive the public interest in promoting telecommuting: the environment, economics, and quality of life. In terms of the environment, many of the nation's metropolitan centers have significant problems meeting requirements of the Clean Air Act. Other locations face more moderate air quality hurdles, but current growth trends pose potential troubles.

Beyond its degrading effect on the environment, over-reliance on the automobile for daily commuting also takes its toll on the earth's fossil fuel reserves. One way to improve air quality, reduce future environmental risks, and conserve energy resources is for employers to adopt telecommuting as part of an areawide transportation demand management strategy.

Economic forces are no less compelling. In many urban areas, peak-hour traffic is bumper-to-bumper for hours every weekday morning and evening. When traffic is snarled, all economic activity is forced to downshift. It slows the daily commute for millions of office workers and for others who make their living, go to school, shop, or simply visit sites around town. It also adds hours to delivery times for commercial vehicles, all the while introducing large amounts of pollutants into the air we breathe. Increasingly, employers are relocating to less congested areas to avoid the high cost of doing business in downtown settings.

Given the innovations in telecommunications technologies, it is now also possible to distribute some work to suburban and rural locations and reduce facilities costs with no loss of productivity. Telecommuting is one approach to a more cost-efficient distributed workforce and provides the additional benefit of increased worker productivity.

Perhaps more than any other driving force, changing social values and more diverse and flexible life style preferences are having an impact on the American workplace. Two- and three-hour daily commutes added to an eight- or nine-hour workday keep family members apart far too long for quality relationships to flourish. There is little time to talk about the day's upcoming events at breakfast, help children with homework or discuss problems after school, or explore ideas for the family's summer trip around the dinner table.

Moreover, there is less and less time or personal energy available to devote to community projects, volunteerism, and other civic activities. Here again, telecommuting holds the potential for tipping the scales back in the direction of more quality time with family and the community.

Potential Benefits to Society

Telecommuting, which brings work closer to the employee's residence, can take the form of working at home or at a nearby telecenter. These flexible workplace arrangements have demonstrated they can help organizations recruit and retain key personnel, increase accessibility for all employees, improve office productivity, increase use of new technology, and reduce facilities costs.

Based on research from other private sector and public organization telecommuting experience, benefits to the employee are likely to include increased job satisfaction, reduced commuting time and transportation costs, diminished stress, improved quality of life, and improved family functioning. Societal contributions include environmental and energy conservation, less traffic congestion on area highways, reduced family stress, increased civic involvement in local communities, and improved economic development at local and regional levels.

Telecommuting can also improve customer satisfaction. The National Performance Review provides insight into the link between employee empowerment and customer service. The report notes that "The federal government must ... create a workplace culture in which employees are trusted to do their best." It also quotes the Director of Marketing for General Motors as saying, "... there's a strong correlation between employee satisfaction and customer satisfaction. If your employees are unhappy ... about ... the quality of worklife, they won't worry about customers (Creating a Government that Works Better and Costs Less, p.85)."

The Changing Role of Central Cities

There is concern among some in the central cities that telecommuting and other forms of distributed work will take jobs and economic activity away from downtown areas. Some maintain that this sort of movement simply exacerbates urban decay and further separates large segments of our society. Experience shows that telecommuting programs usually benefit those who commute in from suburban and rural areas, rather than workers who reside in town.

However, many urban dwellers could benefit equally from reduced transportation costs, increased flexibility and quality of life considerations. Imagine a "smart Metro stop" in an inner-city community that had high-speed network access. Such a community asset could serve as a telecommuting center, a residentially-based service node for consumers of public services, and a local educational resource for neighborhood youth and families.

Even though inner-city locations may not pose traffic-related air quality threats, quality of life and community economic development considerations alone may warrant such infrastructure investment. Similarly, remote rural areas that have traditionally been underserved can also benefit from connection to an improved national information infrastructure.

Through interagency, intergovernmental, and public-private partnerships, multi-purpose telecenters in "smart" inner-city neighborhoods and rural communities could also offer a wide range of telework and teleservice opportunities. By sharing facility and overhead costs and, perhaps, expertise and other resources, center participants would gain many of the advantages of cooperatives and similar joint undertakings.

Moreover, in-town telecenters can accommodate the increasing numbers of reverse-commuters who choose to live in pedestrian-friendly urban neighborhoods but whose work takes them outside the center city.

Related Policy Initiatives

The National Performance Review recommended that GSA and OPM develop a legislative proposal to enable flexiplace and telecommuting arrangements for more federal employees. It further recommended that DOT create and evaluate telecommuting programs. The Accompanying Report of the National Performance Review (on reinventing human resources management) underscores the role of the federal government as a model employer.

"The federal government should be viewed as a model employer in the availability and flexibility of quality worklife programs that emphasize the tools employees at all levels need to manage their work responsibilities and personal lives more effectively. Successful programs will foster interagency and intergovernmental partnerships, encourage cooperation between management and employees, spark collaborative ventures between public and private organizations, and bring harmony to the workplace and community in which they reside."

The federal government can also be an exemplar of how the modern organization relates to its customers and to the community in which it is located. Government agencies - particularly those with missions or capabilities relevant to contemporary community needs - can add value to what state and local officials and others in the private sector have already initiated. And the federal government can seek to use its presence in America's communities to facilitate speedy access to the NII.  

Labor Relations Considerations

Labor unions have raised several concerns regarding flexiplace arrangements. While unions have generally been supportive of telecommuting programs, they caution employees, stewards, and program advocates to keep an eye on:

In keeping with the Administration's labor-management partnership initiatives, the federal government can be a model employer in this regard as well. Union leadership should be involved early in the process of planning telecommuting programs and assuring that concerns are addressed effectively throughout the programs' implementation. Indeed, based on experience over the past five years or so, if this cooperation does not occur, managers will experience major time delays and efforts to gain supervisory support will suffer.

The First Wave: International Benchmarking

Telecommuting has been underway both here and abroad for several decades. Millions of workers worldwide telecommute from home. An estimated five million Americans telecommute from home, and indications are that this number continues to grow. According to a recent study by the University of California-Davis, the first formal telecenter was established along the Marne Valley in France in 1981. Planned as a decentralized job relocation effort, this early attempt at a joint, public-private undertaking was designed to accommodate 100 employees.

The study, funded by DOT and the California Department of Transportation (Caltrans), identified variations on this model, including approximately 60 separate ventures in a dozen nations. Some were aimed at slowing the pace of rural to urban migration, others to promote economic development, several to take advantage of lower wages and operating costs, and a growing number targeted individuals whose assignments could benefit from a less stressful environment.

The Bank of Montreal initiated its first "floating office" in 1991. In this arrangement, employees work out of branch offices, at a client site, or at home using a lap-top computer, remaining available by phone or pager throughout the work day. The effort has proven successful and has pioneered in transitioning to a results-oriented form of supervision. Every effort is made to reduce worker isolation by holding periodic briefings and meetings that all employees must attend. The UC-Davis report indicates the Canadian banking firm is realizing significant cost savings, improved customer service, and higher employee cooperation and morale.

In Japan, the private sector has jumped out front in experimenting with telecommuting arrangements. These ventures are usually high-tech experiments funded by telecommunications firms, office equipment suppliers, and construction companies. One center (in Shiki, just outside Tokyo) evolved to become a job center for women in clerical and secretarial fields. Some of these opportunities can include part-time and home-based assignments.

Another Japanese innovation, the "creative office," combines telecommuting with a resort setting to help employees recover from fatigue and to rediscover a creative muse. One such office is located in Kumamoto, 600 miles from Tokyo in southwest Japan. During the average two-week stay, employees perform their normal tasks of research, planning and market analysis. At the Hokkaido Niseko resort office, workers reported "...improved creative output, fresh perspectives, and self-discovery."

Sweden has employed the "office train." This experiment began in 1986 and involves as many as 20 managers working for half-pay during an eighty-minute train ride in and out of Stockholm. Also in 1986, in Switzerland, Crédit Suisse established fully-outfitted telecenters to meet computer specialist shortages in Basle, Lausanne, Lugano, Winterthur, and Zug. They also believe their employees will respond favorably to such benefits as: flexible work schedules, shorter commuting time, and improved quality of life.

In Devon, England, Oakmoor Telecentres Ltd. is marketing modular telecenter units, designed in collaboration with Digital Equipment Co., that range in size from 150 to 250 square feet. And other sites in England offer "telecottages" designed for computer-based information services, training, "telebusinesses," or for start-up of new, small businesses.

A more recent phenomenon overseas is the "community tele-service center." This differs from most telecottages in that it provides a wider range of support and amenities and typically includes a full-time manager and part-time clerical employee. The UC-Davis study indicates these centers usually offer: "... remote database access, ... fax and electronic mail, data processing services, consultation on use of services, town meeting facilities, distance learning facilities ..., video production/editing equipment and facilities, and facilities to assist small business formation for information-based services."

The report cites 65 such teleservice centers in operation as of 1990, most located throughout Scandinavia and some in other regions as far away as Benin, Sri Lanka, and Brazil. Much of this development is aimed at stemming the seemingly inexorable movement from the countryside into congested urban areas.

The American Experience

In the United States, the first center was established by Pacific-Bell in 1985. Today, an estimated five million American workers nationwide use an alternate workplace one or more days a week. Most are in the private sector, commonly working at home.

Within the last five years, there have been several innovative telecommuting center experiments in Hawaii, California and the State of Washington. Outside Honolulu, the Hawaii Department of Transportation has been sponsoring an intergovernmental facility for more than five years. Sixty to seventy-five miles east of Los Angeles, local officials and some private concerns established a cluster of "telebusiness" centers for multiple organization use. Designed to improve air quality, these projects were made available to both public and private employees. And in 1992, the Washington State Energy Office concluded its two-year experiment with a telecommuting center for state employees in the Puget Sound area.

The UC-Davis study includes information on other telecenter and related projects in California, Washington State, Illinois, New York, Colorado, Kansas, Kentucky, Minnesota, and North Dakota. They run the gamut of urban, rural, residential non-fixed settings and reflect highly divergent use patterns as well. This first generation of state and local government-supported telecommuting centers has pioneered in basic design issues and has clarified technology, administration, and human relations considerations. Among other lessons learned during the first wave, most now agree that it is critical to:

While these early telecommuting center projects have helped clarify some technology and management issues and have been well received by participants, none has achieved financial success. Once an initial subsidy has run its course, participation drops off. Centers have either then closed or local government has stepped in to operate the center and buy more time.

Until recently, almost no effort has been made to market center services to federal agencies or their customers, and utilization rates remain too low to keep the pilot sites operating in the black or even at the break-even point. Again, while successful in many ways, these pioneering ventures have been characterized by:

Technology Issues

For the most part, existing technology and the pace of development of new technology is adequate for most current telecommuting requirements. However, technological advances such as the development of high bandwidth communications (beyond ISDN) would benefit existing telecommuting efforts and are increasingly important as more users and more diverse applications make demands on the system.

Current levels of telecommuting involve only a small, narrow portion of our population, and program focus has been primarily on workstation relocation. As telecommuting expands more to the general public and includes more applications (customer services, telelearning, telemedicine, telelibraries, etc.), technological readiness will be crucial to gaining widespread acceptance and confidence. Some nagging issues that have already become apparent include:

Private Sector Trends

During the past several years, some large private firms have begun shifting sizeable segments of their office workforce - particularly in sales and financial management - to telecommuting arrangements. In Denver, Colorado, Bethesda, Maryland and Charlottesville, Virginia, IBM has furnished employees with furniture and equipment to work at home when they are not in the field with customers. On the occasions this telecommuting workforce requires space or support at the principal workplace, IBM makes available "shared space" in a setting redesigned for intermittent use.

There is a dual business rationale behind this arrangement: it places the workforce (e.g., salespersons and customer representatives) closer to their clients; and it allows the firm to significantly reduce facilities costs. A variation on this approach to sharing office space is the "virtual office" that AT&T has been using to downsize its sales office operations. By replacing such offices with workstations to be shared and used intermittently, AT&T has made this cost-saving transition in New York, Connecticut, and Massachusetts.

Another phenomenon, "hoteling," was initiated by Ernst and Young in their Chicago accounting and consulting operation in 1992. This arrangement is designed to accommodate employees who spend the majority of their workdays out in the field with clients. To meet worker needs on in-office days, the firm makes available private workstations typically integrated with space occupied by peers and related functions. A "hotel coordinator" orchestrates the process of taking reservations for these workstations, assigning space, providing office support, and programming phone numbers.

According to the UC-Davis study, in the first year Ernst & Young reduced space requirements by seven percent, and the company expects to eventually shrink its office space requirements nationwide by two million square feet for a savings of $40 million a year.

In response to the growing trend of satellite and other remote work site placement, a new industry of "executive office suites" has begun to emerge both in the United States and abroad. Not unlike telecommuting centers, executive suites typically offer multi-user services such as shared space, modern equipment and support staff on an intermittent basis. However, as the UC-Davis report indicates, the latter are usually located on prime commercial real estate and have an upscale image "with rates and amenities oriented toward the upper management level rather than the rank-and-file worker."

A hybrid of the executive suite, the "Comm Center," a registered trademark of the Office Technology Group in Long Beach, California, specializes in providing a wide range of accommodations (at different rates) to the one- or two-person office. Notwithstanding these innovations, American business has not yet moved aggressively to make telecommuting a management option to improve the bottom line.

Recent Public Sector Activity

In 1992, Caltrans launched a new effort in cooperation with UC-Davis to establish 12 or more small, neighborhood-based telecommuting centers throughout the state. augmenting this project is another Caltrans undertaking likely to generate six or more sites with the California community college system. Supported by funding from DOT's Federal Highway Administration (through the Intermodal Surface Transportation Efficiency Act, or ISTEA), the Caltrans sites are expected to determine the value of new telecommunication technology as a means of increased mobility, relieve traffic congestion, conserve energy, and improve air quality.

To this end, Caltrans is partnering with a wide range of local instrumentalities to gain insight into how best to initiate and administer such efforts. Partners to date include: regional transportation management authorities, local economic development offices and redevelopment agencies, state and county fairs, public school systems, community college districts, and other public-private collaborations.

Other states and localities are also continuing to experiment with telecommuting and related information technologies applications. A state and private coalition in Kentucky headed by the Kentucky Science and Technology Council is attempting to employ high-tech telecommunications to improve access and promote community economic development in the more remote rural areas of the state. Activities just now getting underway include: regional telework and teleservice centers; local kiosk availability; small business incubator support; distance learning through interactive video technology; and other information services to the citizen.

The State of Iowa is working with a consortium of federal agencies (including GSA) to explore similar applications for use in a statewide fiber-optic environment. Planned efforts are targeting such uses as remote medical diagnostics for veterans through nodal communication with regional medical centers, tax filing and consultation with the Internal Revenue Service (IRS), benefits counseling and application with the Social Security Administration (SSA), and other applications.

In Davis, California, a non-profit coalition assisted by a Caltrans grant is working to establish an interactive community computer network. Called the Davis Community Network, this local education and information system uses modern telecommunication technology to make available at modest cost to local residents: electronic mail, conferencing, forums for public discussions, bulletin boards (describing city services and community resources), information from volunteers, on-line library reference desk, and many other possibilities. It will also represent a multi-channel link between the public and local schools, the public library, city hall, hospitals, and community service organizations.

Beyond these local applications, the community network provides access to the Internet and to a wide range of distance learning opportunities. Tied to a telecommuting center, this resource would make it possible for students and other residents with their own computer and modem to enjoy these benefits.

Related Federal Initiatives

The federal government has been experimenting with flexible workplace arrangements and telecommuting for the last five years. Between June 1990 and June 1992, OPM and GSA operated and evaluated a home-based, flexiplace pilot program that included 15 separate agencies and one thousand participating employees nationwide. The overwhelming majority of employees and supervisors judged flexiplace arrangements to be a desirable workplace option.

As a result of this pilot effort, OPM has since written all federal agencies assuring them of their authority to establish telecommuting programs and encouraging their use. Both GSA and DOT have publicly promoted federal agency use of telecommuting as a means of reducing traffic and improving air quality. Agencies that participated in the two-year pilot project and some others have also developed and implemented formal, home-based telecommuting programs.

Moreover, DOD and VA have telecommuting programs dedicated to persons with disabilities and to reducing the number and duration of worker compensation cases through prevention and better management of the re-entry process. Also, several agencies are considering telecommuting in conjunction with office space reduction and workplace reconfiguration efforts.

While nationwide an estimated five million Americans telecommute, there are only an estimated 3000 federal employees (less than 0.15 percent of the workforce) currently participating in formal telecommuting programs. Most federal telecommuters work at home one or two days a week and spend the remainder of the work week at a principal workplace. Presently, approximately ten percent of those telecommuting participate in center-based programs.