In an increasing number of companies, traditional office space is givingway to community areas and empty chairs as employees work from home, from theircars or from virtually anywhere. Advanced technologies and progressive HRstrategies make these alternative offices possible. Imagine it’s 2 o’clock on a Wednesday afternoon.
Inside the dining roomof many nationwide offices, Joe Smith, manager of HR, is downing a sandwich andsoda while wading through phone and E-mail messages. In front of him is acomputerequipped with a fax-modemis plugged into a special port on the diningtable. The contents of his briefcase are spread on the table. As he siftsthrough a stack of paperwork and types responses into the computer, heperiodically picks up a cordless phone and places a call to a colleague orassociate.Order now
As he talks, he sometimes wanders across the room. To be sure, this isn’t your ordinary corporate environment. Smithdoesn’t have a permanent desk or workspace, nor his own telephone. When heenters the ad agency’s building, he checks out a portable Macintosh computer anda cordless phone and heads off to whatever nook or cranny he chooses.
It mightbe the company library, or a common area under a bright window. It could even bethe dining room or Student Union, which houses punching bags, televisions and apool table. Wherever he goes, a network forwards mail and phone pages to him anda computer routes calls, faxes and E-mail messages to his assigned extension. Hesimply logs onto the firm’s computer system and accesses his security-protectedfiles. He is not tethered to a specific work area nor forced to function in anypredefined way.
Joe Smith spends mornings, and even sometimes an entire day,connected from home via sophisticated voicemail and E-mail systems, as well as apager. His work is process and task-oriented. As long as he gets everything done,that’s what counts. Ultimately, his productivity is greater and his job-satisfaction level is higher. And for somebody trying to get in touch with him,it’s easy.
Nobody can tell that Joe might be in his car or sitting at homereading a stack of resumes in his pajamas. The call gets forwarded to himwherever he’s working. You’ve just entered the vast frontier of the virtual officea universein which leading-edge technology and new concepts redefine work and jobfunctions by enabling employees to work from virtually anywhere. The conceptallows a growing number of companies to change their workplaces in ways neverconsidered just a few years ago.
They’re scrapping assigned desks andconventional office space to create a bold new world where employees telecommute,function on a mobile basis or use satellite offices or communal work areas thatare free of assigned spaces with personal nick nacks. IBM, AT;T, Travelers Corporation, Pacific Bell, Panasonic, AppleComputer and J. C. Penney are among the firms recognizing the virtual-officeconcept. But they’re just a few.
The percentage of U. S. companies that havework-at-home programs alone has more than doubled in the past five years, from7% in 1988 to 18% today. In fact, New York-based Link Resources, which trackstelecommuting and virtual-office trends, has found that 7. 6 million Americansnow telecommutea figure that’s expected to swell to 25 million by the year 2000. And if you add mobile workersthose who use their cars, client offices, hotelsand satellite work areas to get the job donethere’s an estimated 1 million morevirtual workers.
Both companies and employees are discovering the benefits of virtualarrangements. Businesses that successfully incorporate them are able to slashreal-estate costs and adhere to stringent air-quality regulations by curtailingtraffic and commuters. They’re also finding that by being flexible, they’re moreresponsive to customers, while retaining key personnel who otherwise might belost to a cross-country move or a newborn baby. And employees who successfullyembrace the concept are better able to manage their work and personal lives.
Left for the most part to work on their own terms, they’re often happier, aswell as more creative and productive. Of course, the basic idea of working away from the office is nothing new. But today, high-speed notebook computers, lightning-fast data modems, telephonelines that provide advanced data-transmission capabilities, portable printersand wireless communication are starting a quiet revolution. As a society, we’retransforming the way we work and what’s possible.
It’s creating tremendousopportunities, but it also is generating a great deal of stress and difficulty. There are tremendous organizational changes required to make it work. Asmarkets have changedas companies have downsized, streamlined and restructuredmany have been forced to explore new ways to support the work effort. Thevirtual office, or alternative office, is one of the most effective strategiesfor dealing with these changes.
Of course, the effect of alternative officing on the HR function isgreat. HR must change the way it hires, evaluates employees and terminates them. It must train an existing work force to fit into a new corporate model. Thereare issues involving benefits, compensation and liability. And, perhaps mostimportantly, there’s the enormous challenge of holding the corporate culturetogethereven if employees no longer spend time socializing over the watercooleror in face-to-face meetings. When a company makes a commitment to adopt avirtual-office environmentwhether it’s shared work-space or basic telecommutingit takes time for people to acclimate and adjust.
If HR can’t meet the challenge,and employees don’t buy in, then the program is destined to fail. Virtual offices break down traditional office walls. Step inside oneand you quickly see how different an environment the concept has created. Goneare the cubicles in which employees used to work.
In their place are informalwork carrels and open areas where any employeewhether it’s the CEO or anadministrative assistantcan set up shop. Teams may assemble and disperse at anygiven spot, and meetings and conferences happen informally wherever it’sconvenient. Only a handful of maintenance workers, phone operators and food-services personnel, whose flexibility is limited by their particular jobs,retain any appearance of a private workspace. Equally significant is the fact that on any given hour of any day, asmany as one-third of the salaried work force aren’t in the office.
Some arelikely working at a client’s site, others at home or in a hotel room on the road. The feeling is that the employees of Virtual Offices are self-starters. The workenvironment is designed around the concept that one’s best thinking isn’tnecessarily done at a desk or in an office. Sometimes, it’s done in a conferenceroom with several people.
Other times it’s done on a ski slope or driving to aclient’s office. Fonders of the concept wanted to eliminate the boundaries aboutwhere people are supposed to think. They wanted to create an environment thatwas stimulating and rich in resources. Employees decide on their own where theywill work each day, and are judged on work produced rather than on hours put inat the office. One company that has jumped headfirst into the virtual-office concept isArmonk, New York-based International Business Machine’s Midwest division.
Theregional business launched a virtual-office work model in the spring of 1993 andexpects 2,500 of its 4,000 employeessalaried staff from sales, marketing,technical and customer service, including managersto be mobile by the beginningof 1995. Its road workers, equipped with IBM Think Pad computers, fax-modems, E-mail, cellular phones and a combination of proprietary and off-the-shelfsoftware, use their cars, client offices and homes as work stations. When theydo need to come into an officeusually once or twice a weekthey log onto acomputer that automatically routes calls and faxes to the desk at which theychoose to sit. So far, the program has allowed Big Blue’s Midwest division to reducereal-estate space by nearly 55%, while increasing the ratio of employees toworkstations from 4-to-1 to almost 10-to-1.
More importantly, it has allowed thecompany to harness technology that allows employees to better serve customersand has raised the job-satisfaction level of workers. A recent survey indicatedthat 83% of the region’s mobile work force wouldn’t want to return to atraditional office environment. IBM maintains links with the mobile work force in a variety of ways. Allemployees access their E-mail and voicemail daily; important messages and policyupdates are broadcast regularly into the mailboxes of thousands of workers.
Whenthe need for teleconferencing arises, it can put hundreds of employees on theline simultaneously. Typically, the organization’s mobile workers link from cars,home offices, hotels, even airplanes. Virtual workers are only a phone call away. To be certain, telephonyhas become a powerful driver in the virtual-office boom.
Satellites and high-tech telephone systems, such as ISDN phone lines, allow companies to zap datafrom one location to another at light speed. Organizations link to their workforce and hold virtual meetings using tools such as video-conferencing. Firmsgrab a strategic edge in the marketplace by providing workers with powerfultools to access information. Consider Gemini Consulting, a Morristown, New Jersey-based firm that has1,600 employees spread throughout the United States and beyond. A sophisticatedE-mail system allows employees anywhere to access a central bulletin board anddata base via a toll-free phone number.
Using Macintosh Powerbook computers andmodems, they tap into electronic versions of The Associated Press, Reuters andThe Wall Street Journal, and obtain late-breaking news and information onclients, key subjects, even executives within client companies. And that’s justthe beginning. Many of the firm’s consultants have Internet addresses, and HRsoon will begin training its officeless work force via CD-ROM. It will maildisks to workers, who will learn on their own schedule using machines the firmprovides. The bottom line of this technology? Gemini can eliminate the high costof flying consultants into a central location for training.
Today, the technology exists to break the chains of traditional thought andthe typical way of doing things. It’s possible to process information andknowledge in dramatically different ways than in the past. That can mean thatinstead of one individual or a group handling a project from start to finish,teams can process bits and pieces. They can assemble and disassemble quickly andefficiently. Some companies, such as San Francisco-based Pacific Bell, havediscovered that providing telecommuters with satellite offices can furtherfacilitate efficiency. The telecommunications giant currently has nearly 2,000managers splitting time between home and any of the company’s offices spreadthroughout California.
Those who travel regularly or prefer not to work at homealso can drop into dozens of satellite facilities that each are equipped with ahandful of workstations. At these centers, they can access exclusive data bases,check E-mail and make phone calls. Other firms have pushed the telecommuting concept even further. One ofthem is Great Plains Software, a Fargo, North Dakota-based company that producesand markets PC-based accounting programs. Despite its remote location, thecompany retains top talent by being flexible and innovative. Some of its high-level managers live and work in such places as Montana and New Jersey.
Even itslocal employees may work at home a few days a week. Lynne Stockstad’s situation at Great Plains demonstrates how a programthat allows for flexible work sites can benefit both employer and worker. Thecompetitive-research specialist had spent two years at Great Plains when herhusband decided to attend chiropractic college in Davenport, Iowa. At most firms,that would have prompted Stockstad to resignsomething that also would have costthe company an essential employee. Instead, Stockstad and Great Plains devised asystem that would allow her to telecommute from Iowa and come to Fargo only formeetings when absolutely necessary.
Using phone, E-mail, voicemail and fax, sheand her work team soon found they were able to link together, and complete workjust as efficiently as before. Today, with her husband a recent graduate,Stockstad has moved back to Fargo and has received a promotion. Great Plains uses similar technology in other innovative ways to build acompetitive advantage. For example, it has developed a virtual hiring process. Managers who are spread across the country conduct independent interviews withcandidates, and then feed their responses into the company’s computer. Later,the hiring team holds a meeting, usually via phone or videoconferencing, torender a verdict.
Only then does the firm fly the candidate to Fargo for thefinal interview. HR must lay the foundation to support a mobile work force. Just as acafeteria offers a variety of foods to suit individual taste and preferences,the workplace of the future is evolving toward a model for which alternativework options likely will become the norm. One person may find that telecommutingfour days a week is great; another may find that he or she functions better inthe office. The common denominator for the organization is: How can we create anenvironment in which people are able to produce to their maximum capabilities?Creating such a model and making it work is no easy task, however. Sucha shift in resources requires a fundamental change in thinking.
And it usuallyfalls squarely on HR’s shoulders to oversee the program and hold theorganization together during trying times. When a company decides toparticipate in an alternative officing program, people need to adapt and adjustto the new manners. Workers are used to doing things a certain way. Suddenly,their world is being turned upside down. One of the biggest problems is laying the foundation to support such asystem. Often, it’s necessary to tweak benefits and compensation, create new jobdescriptions and methods of evaluation and find innovative ways to communicate.
Sometimes, because companies are liable for their workers while they’re on theclock, HR must send inspectors to home offices to ensure they’re safe. When Great Plains Software started its telecommuting program in the late1980s, it established loose guidelines for employees who wanted to be involvedin the program. they pretty much implemented policies on an unscientific basis. Over time, the company has evolved to a far more stringent system of determiningwho qualifies and how the job is defined. For example, as with most other companies that embrace the virtual-office concept, Great Plains stipulates that only salaried employees can work invirtual offices because of the lack of a structured time schedule and thepotential for working more than eight hours a day. Those employees who want totelecommute must first express how the decision will benefit the company, thedepartment and themselves.
Only those who can convince a hiring manager thatthey meet all three criteria move on to the next stage. Potential telecommuters then must define how they’ll be accountable andresponsible in the new working model. Finally, once performance standards and guidelines have been created,Great Plains presents two disclaimers to those going virtual. If theirperformance falls below certain predetermined standards, management will reviewthe situation to determine whether it’s working. And if the position changessignificantly and it no longer makes sense to telecommute, management will haveto reevaluate.
Other companies have adopted similar checks and balances. They aretraining HR advisers to make accommodations for the individual, but to not makeaccommodations for the person’s job responsibilities. IBM provides counseling from behavioral scientists and offers ongoingassistance to those having trouble adapting to the new work model. By closelymonitoring preestablished sales and productivity benchmarks, managers quicklycan determine if there’s a problem.
So far, only approximately 10% to 15% of itsmobile work force has required counseling, and only a handful of employees havehad to be reassigned. Virtual workers need guidance from HR. Not everyone is suited toworking in a virtual-office environment. Not only must workers who go mobile orwork at home learn to use the technology effectively, but they also must adjusttheir workstyle and lifestyle. The more you get connected, the harder it is todisconnect. At some point, the boundaries between work and personal life blur.
Without a good deal of discipline, the situation can create a lot of stress. Managers often fear that employees will not get enough work done if theycan’t see them. Most veterans of the virtual office, however, maintain that theexact opposite is true. All too often, employees wind up fielding phone calls inthe evening or stacking an extra hour or two on top of an eight-hour day. Notsurprisingly, that can create an array of problems, including burnout, errorsand marital conflict.
IBM learned early on that it has to teach employees to remain in controlof the technology and not let it overrun their lives. One of the ways itachieves the goal is to provide its mobile work force with two-line telephones. That way, employees can recognize calls from work, switch the ringer off at theend of the workday and let the voicemail system pick up calls. Another potential problem with which virtual employees must deal ishandling all the distractions that can occur at home.
As a result, many firmsprovide workers with specific guidelines for handling work at home. It isexpected that those who work at home will arrange child care or elder care. Andalthough management recognizes there are times when a babysitter falls throughor a problem occurs, if someone’s surrounded by noisy children, it creates animpression that the individual isn’t working or is distracted. Still, most say that problems aren’t common. The majority of workersadjust and become highly productive in an alternative office environment. Themost important thing for a company to do is lay out guidelines and suggestionsthat help workers adapt.
At many firms, including IBM, HR now is providing booklets that cover arange of topics, including time management and family issues. Many companiesalso send out regular mailings that not only provide tips and work strategiesbut also keep employees informed of company events and keep them ingrained inthe corporate culture. This type of correspondence also helps alleviate workers’ fears ofisolation. IBM goes one step further by providing voluntary outings, such as tothe Indianapolis 500, for its mobile work force. Even without these events,virtual workers’ isolation fears often are unproven.
The level of interaction ina virtual office actually can be heightened and intensified. Because workersaren’t in the same place every day, they may be exposed to a wider range ofpeople and situations. And that can open their eyes and minds to new ideas andconcepts. However, dismantling the traditional office structure can present otherHR challenges. One of the most serious can be dealing with issues of identityand status.
Workers who’ve toiled for years to earn a corner office suddenly canfind themselves thrown into a universal work pod. Likewise, photographs andother personal items often must disappear as workspace is shared. But solutionsdo exist. For instance, when IBM went mobile, top executives led by example.
They immediately cleared out their desks and began plugging in at common workpods. Not surprisingly, one of the most difficult elements in creating avirtual office is dealing with this human side of the equation. The human factorcan send shock waves reverberating through even the most sober organization. This challenge requires HR to become a active business partner. Thatmeans working with other departments, such as real estate, finance andinformation technology. It means creating the tools to make a virtual officework.
In some cases, that may require HR to completely rewrite a benefitspackage to include a $500 or $1,000-a-month pay for those working at home. Thatway, the company saves money on real-estate and relocation costs, while theemployee receives an incentive that can be used to furnish a home office. Management also must change the way supervisors evaluate their workers. Managers easily can fall into the trap of thinking that only face-to-faceinteraction is meaningful and may pass over mobile workers for promotions. GreatPlains has gone to great lengths to ensure that its performance-evaluationsystem functions in a virtual environment.
The company asks its managers toconduct informal reviews quarterly with telecommuting employees, and formalreviews every six months. By increasing the interaction and discussion, thecompany has eliminated much of the anxiety for employeesand their managerswhile providing a better gauge of performance. In the final analysis, the systemno longer measures good citizenship and attendance, but how much work peopleactually get done and how well they do it. Still, many experts point out that too much reliance on voicemail and E-mail can present problems. Although instantaneous messaging is convenient andefficient, it can overload virtual workers with too much information and notenough substance. Without some human interaction it’s impossible to buildrelationships and a sense of trust within an organization.
Sending workersoffsite can boost productivity, while saving costs. Those who have embraced the virtual office say that it’s a concept thatworks. At Pacific Bell, which began experimenting with telecommuting during the1984 Summer Olympics in Los Angeles, employees routinely have reported 100%increases in productivity. Equally important: this fits into family andflexibility issues and that they enjoy working for the company more than everbefore.
Although the final results aren’t yet in, IBM’s mobile work forcereports a 10% boost in morale and appears to be processing more work, moreefficiently. What’s more, its customers have so far reported highly favorableresults. People are happier and more productive because they can have breakfastwith their family before they go off to client meetings. They can go home andwatch their child’s soccer game and then do work in the evening. They no longerare bound by a nine-to-five schedule.
The only criterion is that they meetresults. Society is on the frontier of a fundamental change in the way theworkplace is viewed and how work is handled. In the future, it will becomeincreasingly difficult for traditional companies to compete against thoseembracing the virtual office. Companies that embrace the concept are sendingout a loud message. They’re making it clear that they’re interested in theiremployees’ welfare, that they’re seeking a competitive edge, and that theyaren’t afraid to rethink their work force for changing conditions. Those are theingredients for future success.