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Could homeworking save money and cut carbon emissions for your business?

Posted by Dr Paul Swift | 22 July 2014 | Viewpoint
Working from home

What's the environmental impact of the shift to homeworking? Dr Paul Swift looks at how getting homeworking right can benefit your business, your workforce, and the environment.

 

Homeworking is not a new concept. For decades there have been advocates calling for practices which enable working from outside the workplace, or claiming that a transformation is just around the corner. The concept began with the widespread introduction of the telephone into homes in the aftermath of World War II, received a boost during the 1970s oil crisis, and took off alongside the rise of personal computing in the 1980s. The potential of homeworking has long been recognised, but until recently it had not spread as far or fast as was predicted.

This appears to be changing – between 2007 and 2012 the number of UK employees who ‘usually work from home’ grew by 13%. This was an increase of almost half a million people, taking the total to over 4 million employees out of a UK workforce of 30 million.

There are a number of reasons for this rise. First, technologies such as broadband internet, smart phones, cloud computing and teleconferencing are becoming cheaper, easier to use and more widely available. Second, management approaches and workplace cultures are evolving. There is an increased focus on outcome-based rather than process-based staff assessment, and a willingness to explore innovative approaches with the potential to provide significant cost and environmental benefits.

But what is the environmental impact of this shift? Now that many businesses are taking action on cutting carbon and becoming more sustainable within their own operations (more fuel-efficient car fleets, sensor-controlled lighting, etc.), we need a more sophisticated understanding of the environmental impacts of homeworking. Is it a boon, or a burden?

At first sight the issue is a simple one. Homeworking reduces employee commuting, which results in carbon, money and time savings. If office space is properly rationalised to reflect lower occupancy, homeworking can also significantly reduce office energy consumption and rental costs. As with any change, however, the environmental benefits offered by homeworking can only be achieved if it is implemented at the right time and in the right way.

Overcoming barriers

Despite its recent growth, there is potential for homeworking to become significantly more widespread than it is currently. Over 40% of UK jobs are compatible with working from home, however only 35% of companies have a policy allowing their employees to work from home. Even where homeworking is offered by companies, between one-third and one-half of employees choose not to accept it. There is therefore resistance to homeworking both on the part of management, who choose not to offer it to staff, and employees, who choose not to take it up.

There are a number of reasons why employees might be reluctant to take up home working. These include a reluctance to change established habits; concern that the policy is purely driven by a search for cost savings; questions over higher home energy bills; and a nervousness over the lack of regular contact with colleagues and managers.

All of these concerns can be addressed, however it is vital that the team introducing homeworking engage extensively and honestly with employees. One way to help inform the discussion is to gather good data on changes to travel patterns and home energy consumption with early adopters. Employees are also more likely to embrace homeworking if it is introduced as part of a broader cultural shift, alongside initiatives such as renewable energy, provision of facilities for cyclists and car sharing schemes.

Concerns can be justified - there is some evidence that employees working from home may be penalised by their managers, if only subconsciously, by the lack of face-time or a visibility of achievement, through slower career and pay progression. It is vital that managers are trained in how to fairly and transparently assess staff who work from home. It is also important to get senior management buy-in early on. This can help define the principle that homeworking is an acceptable option.

Correctly implemented, homeworking should involve a combination of working from home and working from the office on different days, depending on job roles.  It should also reflect different work patterns and priorities, such that ‘home days’ are dedicated to tasks requiring focus and concentration without interruptions, and ‘office days’ involve interaction with colleagues, communication tasks, and meetings.

Perhaps the greatest barrier to the uptake of homeworking is management uncertainty. Managers are often concerned that staff members will work less effectively outside the office. For example, homeworking hit the headlines in 2013, when Yahoo’s incoming CEO, Marissa Mayer banned working from home. An internal memo stated that “some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings."

The ban prompted a vigorous debate within the tech community and the wider business world. Two months later Mayer acknowledged that “people are more productive when they’re alone.” She also qualified the ban with “it’s not what’s right for Yahoo right now. [The ban] was wrongly perceived as an industry narrative.”

Making the most of the benefits

We have discussed some of the barriers and how these can be addressed, but what are the benefits?

A frequently cited benefit of homeworking, supported by several case studies, is higher staff satisfaction. Flexibility over working hours, combined with time saved by reduced commuting, results in a better work-life balance. Improved staff satisfaction can in turn result in higher retention levels. For example, annual voluntary turnover for staff working from home at the healthcare company Aetna is 3%, compared with the company-wide average of 8%.

A distributed workforce has the additional benefit of making businesses more resilient to transport disruption and extreme weather events, something a number of organisations have faced with snowfall and flooding in recent winters.

Homeworking results in fewer employees in the office. When this is combined with hot-desking (where multiple employees share a single desk), it offers the possibility for businesses to rationalise and reduce their office space requirements. This can result in both environmental benefits through lower heating and lighting, as well as substantial cost savings from lower rental costs.

A good example of successful homeworking is at Cisco, where the average employee telecommutes two or three days each week. This avoids 35 million miles of commuting per year, reducing Cisco’s annual carbon emissions by 17,000 tonnes. Cisco estimate that the increased staff productivity saves them over $300 million per year.

Getting it right for your business and the environment

Homeworking represents an opportunity to achieve significant cost and environmental savings. If it is embraced by businesses and the public sector, homeworking has the potential to cut £3 billion a year of costs for UK employers and employees and to reduce carbon emissions by over 3 million tonnes a year across the UK.

Organisations are keen to achieve these benefits, however there remains a nervousness regarding the impact of having staff outside the office. As the need to reduce our carbon footprint increases, however, it has never been more important to examine homeworking carefully and resolve these ambiguities.

In general, homeworking will provide both environmental and cost-saving benefits for organisations when well-implemented. It has a particularly strong impact where employees commute by car and where there is the potential to rationalise office space. It should be noted that in certain circumstances, particularly where offices are energy- and space-efficient and where staff generally commute by public transport (e.g., central London), home-working could result in an overall increase in carbon emissions.

In terms of environmental impact there is no ‘best’ solution to homeworking. Rather, whether and how it is implemented will depends on various factors, including what your business does, where employees live and how they travel, the efficiency of your workplace, and even seasonal differences in weather. It is therefore vital to examine the specific situation of the business and its employees, in order to properly understand the potential impacts. Only then will homeworking achieve optimal benefits.

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