News | June 27, 2000

Telecommuting is Becoming a Popular Business Strategy: Study

The convergence of new technologies and business trends -- not simply employee preference to work at home -- is driving a rapid growth in telework, according to a new report from the Center for Digital Culture.

Telework, defined as moving work activities to employees rather than requiring employees to commute to work, makes good business sense, say the authors of the report, because it can increase employee retention and reduce employer operating costs.

The number of U.S. teleworkers grew to 20 million in 1999, up from 4 million in 1990, and the rate of growth is rapidly accelerating, according to the Center for Digital Culture, an initiative of U S WEST, Inc. that researches the social, political and economic impacts of emerging telecommunications technologies.

Growth in telework programs is increasingly driven by specific business goals, not individual preferences or concerns about traffic and the environment, according to the 33-page report, "Telework Enters the Mainstream: New Technologies, Social and Business Dynamics Transforming the Workplace."

"Telework is no longer a fad," said Jim Miller, co-author of the report. "Telework is increasingly the result of hard-nosed business decisions. It is an efficient, effective alternative to traditional work arrangements."

The report found that recent advances in computing and telecommunications technologies make telework more productive. The rapid growth of the Internet, development of high-speed, broadband Internet access (digital subscriber lines or DSL and cable modems) plus increased networking capabilities allow employees to work at home at computing speeds equal to or greater than they have at the office.

In addition, telework allows employers to reduce office space costs, parking and other overhead expenses by as much as 30%. An employee working at home two days a week can save a company $12,000 annually, the study authors contend. Accounting firm Ernst & Young reduced real estate expenses by 7% in the first year of a telework program, the report said.

Telework also can reduce the ratio of managers to staff from one to four to one to 40, according to the report's findings.

Allowing employees to work from home may reduce employee turnover -- a preventable corporate expense. A 1997 survey found 29% of workers would change jobs if they could not work at home, the study authors noted.

The report also discusses challenges associated with telework, including:

  • Potential impact of U.S. Occupational Health and Safety Administration regulations for work environments in the home;
  • E-literacy requirements and training employees in technical aspects of telework before making investments in technology; and
  • The willingness by managers to allow employees to work remotely or "out-of-sight."

The report is authored by Jim Miller (, manager of U S WEST, Inc. Extended Workplace Solutions, and Rebecca Self (, senior editor and director of research at the Center for Digital Culture. For more information contact Sam Smith, executive director, (303) 965-2689,

Edited by Christine Woolsey