Nearly 40 years ago, telecommuting looked like an unstoppable trend. Today, it still does. Why is this revolution taking so long and what will the future of work look like when it finally arrives?

In 1973, when former NASA communications system engineer Jack Nilles undertook the first studies regarding the practicality of using electronics to work remotely, he was impressed with all the potential advantages.

You didn’t have to be a rocket scientist to see the pluses. Society would save billions in fuel costs and productive work hours. Companies would save on real estate and have a more wide-awake staff. And employees, freed from the highways and the commuter trains, would enjoy a higher quality of life, with more time, energy, and money left for friends and family.

Nilles, who had left the government in 1972 to direct interdisciplinary research at the University of Southern California in Los Angeles, called the new possibility “telecommuting.” By the mid-seventies, he recalls now, he believed that in 10 or 20 years, telecommuting would become the dominant way people worked.

What Revolution?
Yet nearly 40 years later, the office is still very much with us. Even as the world has adopted email, the Internet, the cell phone, and now social media, many of us still spend long hours driving back and forth—and often sit down to the same laptop we took with us from home. Even now, most surveys show that in the United States and the European Union, telework is still relatively rare. Though working remotely on a part-time basis is becoming ever more common, less than 2 percent of the population in either market teleworks full time.

On the whole, it feels as if a part of the future still hasn’t arrived, “a little bit like when you were a kid and imagined we’d all get to work in flying cars,” says Jon Andrews, a consultant at PwC in London.

Flying cars aren’t here yet for good reasons but why not telecommuting? The answers aren’t obvious. A number of studies suggest that it works fairly well. “Teleworkers are more satisfied with their jobs and they experience a lot of benefits from being away from the office a majority of the time,” says Kathryn Fonner, an assistant professor of communications at the University of Wisconsin in Milwaukee. Fonner recently completed a study with Michael E. Roloff, a communications professor at Northwestern University in Evanston, Ill., that compared the job satisfaction of people who worked at home at least three days a week with the satisfaction level of people who worked entirely at the office.

On top of those advantages, Nilles says, teleworkers actually tend to be more, not less, productive than office-based workers.

Companies also have cost reasons to like telecommuting, according to Nilles, now a telecommuting consultant for JALA International. Most find they can save 10 to 15 percent of the cost of an employee’s salary if that person is not working under the company’s roof. “And as [the late U.S. Senator] Everett Dirksen used to say, ‘a billion here, a billion there, and pretty soon you’re talking real money,’ ” Nilles says.

Social Constraints
So why hasn’t telecommuting caught on more?

“The labor management/surveillance issues are large,” speculates Boston College labor historian Juliet Schor, “so unless people are on piece rates, they present challenges to employers.”

But Nilles argues that those concerns are mostly imaginary. “The basic issue is what it’s been from the beginning … telecommuting produces or triggers a social revolution in an organization and that’s always scary to management,” he says. “The greatest barriers to the growth of telecommuting have always been between the ears of managers rather than for any technological issues.”

“Right now, the constraint is social rather than technical,” agrees PwC’s Andrews.

Nilles tells his clients bluntly that the decision to allow telecommuting often boils down to whether the organization is interested in productivity or rather in politics and “face time.”

Employee anxiety may feed into the decision as well. Particularly for single people, the office still performs an important social function. In most high-tech societies, studies have found that 15 to 20 percent of married couples met at work. Even today, offices remain a staple feature of the popular imagination, as suggested by such hit TV shows as the dark comedy “The Office” and the even darker drama, “Mad Men”.

Surveys have suggested that many workers fear that being out of sight also places them out of mind, locking them out of promotions. Others reportedly worry that once the boss realizes that the job can be done at home, there’s nothing to stop him from realizing it might just as well be done offshore.

Indeed, viewed from a certain angle, it might be said that the telecommuting revolution has happened—but the call is from Noida, not Neuilly. Business process outsourcing is a $59 billion industry in India alone. Yet even in telecom-mad India, cube farms are the rule for high-tech companies rather than the exception. Nasscom, an Indian tech industry association, estimates that Indian IT business process outsourcers have invested in more than 200 million square feet of office space over the past decade.

As noted, though, the number of people who telework at least part-time keeps growing. This trend is sometimes propelled by cost logic, particularly at tech companies such as Hewlett-Packard, which can save money and showcase their technology at the same time. But a bigger factor may be the entry into the job market every year of young people who have never had to equate work with a workplace.

This may be bad news for someone who wants to be Don Draper, but it’s creating many new opportunities for others—and not just in technology. Starbucks and McDonald’s have benefited tremendously from the popularity of wi-fi. In October alone, 30 million people logged on to Starbucks’ free wi-fi networks in the United States. With less success, smaller entrepreneurs have tried to design buildings and “offices” that provide meeting space and places to work.

Companies are also now able to introduce new services more easily than they ever did before, Andrews notes. For instance, it is easier for groups to come together, both inside and outside firms. Inside firms, Nilles says, better communications means it’s becoming simpler for experts to form “evanescent organizations,” teams that join together from all over the world to solve a particular business issue.

This is now true for start-ups as well. It’s already been five years since network economist Hal Varian, now Google’s chief economist, noted the growth of “micro-multinationals”—small businesses that straddle two or three countries. These days, more and more of these tiny multinationals are forming, as groups meet online and leverage the resources of each side, much as big companies have done for decades.

At the managerial level, telecommuting has changed business in some surprising ways. Communication tools allow executives to be in touch with multiple places at once. But they still travel a lot—and rather than abandoning the office, they now belong to a number of offices.

“If you look at most global executives today … they spend a high percentage of their time essentially telecommuting,” observes Andrews. “They take a laptop with them wherever they go.”

Ironically, rather than declining, as one might expect in a world where free video conferencing is now available, annual global spending on business travel is growing. It now stands at $896 billion and is expected to hit $1.2 trillion by 2014, according to the NBTA Foundation, the research arm of the National Business Travel Association.

The fact that flexibility is leading to even more time on the job isn’t confined to road warriors. Workers, freed from commuting, aren’t spending those extra hours on their golf game. Nilles has found that the opposite is true. “Teleworkers tend to keep going long after their in-office colleagues have gone home,” he wrote in a recent blog. The problem is serious enough that one of the training sessions his firm offers teaches workers to pace themselves.

Team Players
Telecommuting is also presenting new challenges to managers. At the top of many lists: its effect on team-building. “Even with new types of technology, it is still going to be difficult,” says Cary Cooper, director of Robertson Cooper, a British organizational psychology consultancy, “because a lot of what goes on [in building teams] doesn’t go on through formal settings like video conferencing or audio conferencing or Skyping. A lot goes on behind the scenes in informal situations.”

Nilles, however, argues that the benefits of proximity have been oversold. “It’s conceivable that some serendipitous encounters are missed when people aren’t together,” he says. But, he adds, “most offices are dysfunctional. That conversation around the water cooler tends to be around sports or who’s doing what to whom rather than inventing great new products.”

Research seems to bear out Nilles’ observation. Fonner and Roloff’s recent study found that many workers are happier telecommuting in part because it helps them stay clear of office politics. “Teleworkers are able to either avoid or escape office politics and that was something that they found really satisfying,” Fonner says.

The researchers also found that telecommuters get more done by living without constant meetings and information overload, as well as by skipping the office politics, and at the same time they experience less conflict between work and family roles.

Meeting everyone’s demands is still not a picnic, however. “Teleworkers actually have a very difficult time because the boundary is less clear,” Fonner says. “It’s easy to move between our home and work selves, but also stressful because you’re constantly moving back and forth.”

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