Telework and the New Workplace of the 21^st^ Century - Executive Summary

America may be witnessing another historic transformation of the
workplace. In the pre-industrial world, workers lived in isolation,
usually on farms, and had little contact with one another. The
Industrial Revolution brought people into central locations \--
factories for most workers \-- to work in a strict top-down hierarchy.
The Information Age may return workers to their homes, and yet connect
them via modern technology to \"the virtual office.\"

Such a shift holds huge implications for how we work and how we live.

One thing we know for certain about telework \-- as working from home by
means of modern technology is now most often called \-- is that we
don\'t know enough about it. To increase national understanding of this
important phenomenon, Secretary of Labor Alexis M. Herman convened a
national symposium at Xavier University in New Orleans on October 16,
2000. This unprecedented gathering brought together for a day of
challenging, in-depth discussion more than 150 leading experts on
telework, including academics, social scientists, practitioners, public
officials, corporate executives, and representatives of organized labor.

A dozen studies presented at the symposium have been published as
\"Telework: The New Workplace of the 21^st^ Century\" and are available
on the Department of Labor\'s web site, www.dol.gov. These studies
provide the most comprehensive review of the literature on telework now
available. This Executive Summary reviews some of the most important
themes and conclusions in those papers.

The studies suggest that telework holds vast potential to benefit
workers, employers, and the American economy as a whole: to help
employees balance the demands of work and family, to promote diversity
and new opportunities for Americans who are outside the economic
mainstream, and to increase worker productivity and help companies
compete in the global marketplace.

Some have asked, \"Where will the new world of telework lead us?\" That
is the wrong question. The right questions are, how do we manage the new
world of work and the changing workplace, and, as a society, what must
we do to ensure that telework\'s benefits outweigh its costs. But before
we can make the choices that will lead to the best results, we must
understand telework better.

**Telework \-- Who Does it Now?**

The typical teleworker appears to be a college-educated white man,
between the ages of 34 and 55, who owns a home computer and earns more
than \$40,000 a year. Telework is best suited to jobs that are
information-based, portable and predictable, or that demand a high
degree of privacy and concentration. Typically, teleworkers have been
information workers in mid-level or senior positions, but the trend is
toward teleworking at all levels of employment.

By some estimates, there are between 13 and 19 million teleworkers in
America today. Some people telework full-time, but a larger number
telework one or two days a week.

**The Federal Initiative**

The federal government, with the support of Congress, has actively
supported telework since 1990, but could do much more. The federal
initiative has included both individuals working from home and regional
telecenters where federal agencies can lease workstations for their
employees. The telecenters program, begun in 1993, now includes 17 such
centers in the Washington, D.C., area and others across America.

One of the reports presented at the New Orleans symposium examined this
federal telework initiative and found it generally effective. The report
cited the General Services Administration New England regional office in
Boston, which set \-- and surpassed \-- a goal of having 10% of its
people work from home after a huge highway construction project made
commuting extremely difficult.

The report also cited the Consumer Product Safety Commission which now
has 95 of its 130 field employees working from home, with an estimated
savings of \$3 million in rental costs since the program began in 1993.
The federal initiative has also stressed telework as a means of
expanding opportunities for workers with disabilities.

The Department of Labor now has about 350 employees who are formally
teleworking and 2000 more who telework on an informal basis. One example
is Laura Patton-Watson, a cost negotiator in Washington, DC. Soon after
Laura married, her husband, an army officer, was assigned to a base in
Germany. Not wanting to lose a valuable employee, Laura\'s supervisor
arranged for her to telework from Germany for two years. When Laura
returned to Washington, she received a promotion. Then her husband was
transferred again, and now she is teleworking from Yorktown, Virginia.

Labor\'s teleworkers also include more than 30 staff attorneys who work
at home one to three days a week, using e-mail and on-line legal
research just as they do at the office. This has enabled their agencies
to minimize office space because the teleworkers share offices and most
often are not there at the same time.

Although the number of federal teleworkers increased from about 4,000 to
an estimated 25,000 during the Clinton Administration, that still
amounts to only about 2% of the federal workforce*,* compared with an
estimated 10% teleworking in the private sector. A management culture
that often resists change is largely responsible for the relatively low
number of federal teleworkers. Since the federal program was motivated
by the need to hire and retain outstanding employees, as well as to help
workers balance work and family, the federal government clearly should
do better.

As telework expands in both the public and private sectors, it should
not be simply a fringe benefit for the most skilled and educated
workers, but a powerful tool for bringing into the economic mainstream
millions of people who have too often been denied opportunity, such as
Americans with disabilities. Researchers and policy makers must focus on
questions of access to technology and technology literacy as a basic
element of our future investigation of telework.

**Workers: Benefits, Costs, and Open Questions**

[Balancing Work and Family]{.underline}

Telework can provide much-needed flexibility to working parents, thus
reducing \"role overload\" and enhancing family life. Still, the
assumption that teleworkers spend more \"quality time\" with their
children was challenged by a new national survey. Older children (grades
7 to 12) of teleworking fathers were 11% more likely to agree that \"my
father does not have the energy to do things with me because of his
job\" and \"my father has not been in a good mood with me because of his
job\" than the children of fathers who work in an office. Telework may
well be beneficial for parents in some cases, but much depends on how
each parent interacts with his or her children.

[Blurred Boundaries Between \"Work\" and \"Home\"]{.underline}

Thanks to e-mail, mobile phones and pagers, people who work at home may
find themselves on call around the clock. Some teleworkers may thrive on
round-the-clock pressure, but others will want to maintain clear
boundaries between work time and personal time. They may find it useful
to have a clearly-defined home office. And they may raise questions
about overtime pay when work spills over into personal time.

One participant at the New Orleans symposium noted that, when parents
work at home with children in the house, men may see the kids as a
\"temptation\" while women see them as a \"responsibility.\" Thus, the
participant said, a physically separate home office and a fixed schedule
are particularly important when women work at home with children in the
house.

[Social Isolation or the Virtual Community]{.underline}

On Labor Day 1999, Secretary Herman issued a study entitled
\"*futurework*: Trends and Challenges for Work in the 21^st^ Century.\"
The report posed important questions about the impact of technology on
human interactions in the workplace.

As technology continues to spread, questions emerge: What are we losing
as a society? What is the effect on social relations? Work, after all,
is more than just a job or paycheck. It is where we meet friends, share
ideas, and build a common sense of purpose and a social network. With
voice mail, e-mail, and computer networks, how do we preserve the human
network and the social interaction that work has helped to facilitate?
What takes its place?

As this suggests, isolation is a danger for those who live and work at
home. Still, the evidence suggests that teleworkers are generally
included in office networks and find themselves able to maintain
personal relationships with co-workers. In fact, the \"virtual office\"
can support genuine social interaction. This may be the result of an
important cultural shift in American life: close personal relationships
that develop and continue across sizable distances.

In fact, it appears that virtual groups are able to go beyond a business
environment to build personal relationships: one of the participants
told about a \"virtual roast\" she had organized for another member of
her virtual workteam.

Despite its benefits, telework must not be allowed to further isolate
individuals, certain occupations, or geographical areas \-- for many
people may need human contact as much as they need income. Managers must
seek ways to keep teleworkers involved with the central office as well
as with the other teleworkers on their \"virtual team.\"

The workforce of the future is going to include a great many people who
have often been excluded because of age, gender, race, geography or
disability. One of the challenges facing America is to leverage our
diversity \-- to make full use of all the talents of all the people in
our uniquely diverse, multi-racial, multi-cultural society. Only by
doing so can we live up to our highest ideals and compete with all our
strength in the world economy. For Americans with disabilities, and
other groups as well, telework can help meet that challenge.

[Avoiding the Commute]{.underline}

For many teleworkers, the number-one motivation for seeking an
alternative work arrangement is to reduce or eliminate the increasingly
long and brutal commute that so many American workers now endure. Some
have speculated that the growth of telework could eventually have a
dramatic impact on our society, both in terms of where workers would
choose to live \-- if liberated from the commute \-- and in terms of
environmental gains if fewer commuters are on the highways and fewer
cars are polluting the air. In theory, full-time teleworkers could move
to isolated areas, but there is no evidence that substantial numbers
have done so thus far or would in the future.

Telework offers benefits \-- relief from commuting among them \-- but it
is far from clear that the elimination, or even the serious reduction,
of pollution or gridlock is on the horizon. If workers stop commuting,
they and their families may drive just as far to shop or attend school.
We need continued efforts to bring labor economists together with urban
planning, environmental science, and transportation scholars, among
others, to assess the relationship between telework and the commute.

**Employers: Benefits, Costs, and Open Questions**

[Increasing Productivity]{.underline}

Proponents of telework say it will increase productivity for several
reasons. Teleworkers may have a clearer sense of expectations because of
more specific instructions from their supervisors. Teleworkers may use
their time better at home and suffer fewer interruptions. They can
arrange their workplaces in whatever way suits them best. Given more
autonomy, teleworkers may assume more responsibility for meeting or
exceeding goals. At best, telework may enable motivated workers to
unleash their talents with the help of managers who are willing to try
new ideas that may benefit both workers and employers.

Nowhere is research more needed than on the question of whether telework
increases productivity. Some objective evaluations do exist, but most
often claims of increased productivity are based on subjective
evaluations by the teleworkers themselves or by their supervisors. Most
of these subjective evaluations report productivity gains of 20 to 35%
or more, but experts view self-assessments with polite skepticism.

Studies typically do not compare the productivity of teleworkers to
workers in traditional arrangements. If they do, the evaluations do not
make clear how much of the increased productivity is due solely to
telework and how much of it is because managers have selected their most
productive and motivated workers for telework assignments.

Telework clearly appeals to many managers, but those who resist it may
cite a lack of \"hard\" evidence that cost savings and increased
productivity will compensate for start-up costs such as training and new
equipment. They may also cite a lack of evidence that productivity gains
will be permanent. We need more and better objective evaluations of the
relationship between telework and productivity.

[Retaining the Best People]{.underline}

Many companies now regard telework and other flexible work arrangements
as vital to attracting and keeping the employees they want.

*Business Week* noted recently that \"the best that corporations can do
is to create an environment that makes the best people want to stay.\"
Today\'s young, educated, in-demand skilled workers can often write
their own tickets, and they may see flexible work arrangements as a
\"must\" along with the pay and benefits they can command.

Moreover, losing valuable employees is expensive. By one estimate, it
costs an employer one-third of a worker\'s annual salary to replace that
individual. If telework can reduce turnover, it can be a high-return
investment for employers. The existing evidence suggests that telework
can lower turnover, but it is scant and we need to learn more.

**Telework in Practice**

Telework represents a dramatic restructuring of relationships between
workers and managers and presents both opportunities and challenges to
organizations. It can be a mirror that forces organizations to take a
hard look at themselves, at how they make decisions, and at their most
basic assumptions about work, workers and work locations.

The first challenge for managers is to identify the jobs best suited to
distance work. Jobs in sales, customer service, and auditing, for
example, can be converted to full-time telework, but jobs requiring
face-to-face contact with co-workers or customers are difficult if not
impossible to perform from home. There is still much room for creativity
in shaping the world of telework.

A second challenge is closely related: managers must select teleworkers
who are suited to the new work environment. Teleworkers must share the
work ethic and values of the organization and, therefore, may best be
selected from within the employer\'s workforce. Teleworkers need
time-management skills and they must be self-motivated, trustworthy, and
able to work independently. Even the most skilled teleworkers may need
training in how to work effectively in a new environment.

The third challenge is how to evaluate teleworkers. The traditional
system based on direct observation won\'t work. Instead, telemanagers
must rely on such evidence as the time it takes the worker to respond to
phone calls or e-mails, or simply on overall productivity. With fewer
opportunities for informal discussions, in the hallway or at the water
cooler, on how a project is progressing, the manager must be more clear
about expectations before a teleworker begins a task. Telemanagers may
have to learn new skills and management techniques, with emphasis on
results-based evaluation. Some managers say that, in learning to manage
teleworkers, they have also improved their ability to manage in the
office.

**Empowering Workers**

Telework has the potential to shift power toward the individual.
Sociologist George Gilder wrote in 1989, \"Rather than pushing decisions
up through the hierarchy, the power of microelectronics pulls them
remorselessly down to the individual.\"

In workplace mythology, the employer has often been seen as the
all-wise, all-powerful parent. Yet modern technology encourages
workplace paternalism to give way to self-actualization. Management may
evolve from parent to partner. One writer calls this the end of
America\'s adolescence, as the worker becomes a responsible adult who
takes responsibility for decisions. One of the basic goals of the
Clinton-Gore Administration\'s far-reaching reinvention of government
was to empower front-line workers to make more decisions. Telework can
accelerate that trend both in government and the private sector of the
economy.

**Unanswered Questions**

Telework raises far more questions than we have been able to address in
this summary. Some of these questions are examined in the collection of
papers from the New Orleans symposium and we recommend it to those
seeking more information.

Many questions exist relating to telework tax incentive programs, the
impact of telework on unions and unionization, pay policies and overtime
for telework, how telework should be defined, how it can be made
accessible to more workers, how managers can be made to understand and
accept it, and its potential for abuse. One participant in the New
Orleans symposium suggested a future in which a core of central
employees would direct a much larger staff of contract workers. If so,
what would be the terms of employment for those contract workers? Would
they have to fight for status and benefits as today\'s \"temp\" workers
have? Some argue that, in exchange for the benefits of working at home,
teleworkers should accept lower pay \-- and others respond that
increased productivity might just as well justify *higher* pay.

Amid all the questions surrounding telework, we have two certainties: it
will continue to grow and we need to know more about it. The potential
of telework cannot be realized without an expanded national research and
demonstration effort that more fully evaluates the costs and benefits of
this powerful new force in our society.

**Summing Up**

The United States has a rich history with regard to telecommunications
and transportation policy. In the 1950s, we built the greatest national
highway system in the world. In the late 1970s and 1980s, we originated
the information superhighway that came to be known as the Internet. We
must continue our pioneering commitment to universal access into the
realm of telework. Our education system must do more to train teachers
and students in the use of information technology and entire communities
must create economic development plans that maximize technology\'s role.
In today\'s economy, the traditional Three R\'s are not enough - we all
need the Fourth R of Technological Readiness.

We do not yet know the full potential of telework to change our society,
but we do know that technology can break down many walls. As John
Chambers, CEO of Cisco Systems, says, \"There are two fundamental
equalizers in life - the Internet and education.\" We must make full use
of them both.

Telework is not a silver bullet for solving skills shortages, helping
workers balance work and family, and increasing diversity in the
workplace. But it provides a unique example of the power of technology
to break down barriers. What will be the impact of telework on our
society? The answer depends on whether or not we grow to understand
telework and then to manage it properly.