Debunking Labor's telework revolution

Predictions that Australia will see a spike in telework may look credible on the surface, but neither the nature of the workforce nor technological history support this assumption.

Despite Julia Gillard’s rhetoric, there will be no telework revolution.

As part of its NBN push, the government is promoting telework as the way of the future. With office space so costly, it’s hoping companies will embrace it and encourage their employees to work via email, Skype and private networks.

Think again. Telecommuting is not about technology, it’s about management and studies show that with most managers, it’s a case of out of sight, out of mind.

As Jack and Suzy Welch wrote in a 2007 BusinessWeek column: "Companies rarely promote people into leadership roles who haven’t been consistently seen and measured. It’s a familiarity thing, and it’s a trust thing. We’re not saying that the people who get promoted are stars during every "crucible” moment at the office, but at least they’re present and accounted for. And their presence says: Work is my top priority. I’m committed to this company. I want to lead. And I can.”

That’s why only six per cent of the workforce here telecommutes. Companies reward presenteeism, it’s the cost of doing business. Also, given the economy’s structure, it’s hard to see telecommuting taking off in mining, agriculture, construction and retail.

True, some companies have embraced telecommuting. Telstra, Westpac, Microsoft and KPMG use telework to retain and attract skilled staff and save costs by reducing pressure on office accommodation. Cisco has about 90 per cent of its staff globally using telework. In its 2011 Business Achievement awards, the Equal Opportunity for Women in the Workplace Agency (EOWA) cites cosmetics wholesaler L’Oreal and biotechnology company Amgen for offering their mostly female staff telecommuting options. Medibank Private has 1000 people teleworking from home and an after-hours GP service with nurses and doctors from all around the country.

And the federal government wants more of it. Taking its lead from President Obama who signed the Telework Enhancement Act in December 2010 to increase telecommuting for government employees, it has established its Digital Economy Goal as part of the NBN rollout. It aims to double Australia’s level of telework so that at least 12 per cent of Australian employees have a telework arrangement with their employers.

Kicking off Telework Week, Julia Gillard committed her government to having 12 per cent of federal public servants regularly teleworking from home by 2020. That’s a big increase – only about 4 per cent of the public service telecommutes now. The public service, in Gillard’s view, will set an example for the rest of business.

Now, it has to be said that operating from home for one or more days a week, using high-speed broadband has a certain appeal. Properly managed, it’s a workplace flexibility tool and attracts more part-time, casual, older and disabled workers to the workforce as well as people who are carers or living in regional and remote areas.

Deloitte research shows it’s popular. It cites a survey finding that 73 per cent of part-time and casual respondents said they would take up telework if it were available and most were willing to change industries to get it. Six in 10 people nearing retirement age said they would undertake telework. As a result, they would delay retirement by an average of 6.6 years, perfect with an ageing population where more companies will have to keep workers beyond their retirement age.

Apart from costs, there is also evidence that telecommuting improves productivity. This was borne out in research conducted by Stanford researchers in the US with the leading travel agency in China (CTrip) which was seeking to embark on homeworking but was concerned it would lead to a drop in worker productivity. Stanford conducted an experiment with 255 of the agency’s 13,000 employees. They worked in a call centre and had volunteered to work at home. Stanford found a 13 per cent increase in productivity by home-based workers with 9.5 per cent increase in time worked because of less time spent on lunch breaks as they ate alone, more punctual attendance as they only had to commute from their kitchen to their workplace, fewer sick days and a 3.5 per cent increase in calls taken without any decrease in call quality due to a quieter work environment. Attrition rates were also reduced. Turnover of home workers? About half those in the office-based group. This also led to significant savings in office space, recruitment and training.

Still, teleworking has not taken off in a big way here and there’s a reason for that. Quite aside from the structure of the economy – suggesting that telecommuting would only have an impact on a limited segment – the evidence suggests managers are not comfortable working with people they can’t watch over. If the government was serious about encouraging more telecommuting, it would invest in training managers for the transition.

A professor of organisational behaviour at London Business School, Daniel Cable, found that companies penalised telecommuters and rewarded those who chose to come in to work. His research published in the MIT Sloan Management Review earlier this year found that managers were more likely to rank workers as dependable, committed and industrious, even if they put in what he called "passive face time”, just turning up to work. That’s regardless of the quality of their work. Being the last to leave or coming in on weekends also impressed bosses, even if they were seeing what was going down on LinkedIn or chilling out on Facebook. "The bottom line is that employees should be wary of work arrangements that reduce their office face time,’’ Cable writes.

Apart from management, the other obstacle is the workers themselves, something the government and consultants haven’t taken into account.

Not everyone is cut out for telecommuting. Significantly, the Stanford study found that half the workers who were telecommuting ended up working back in the office. The reason: loneliness. People go into work to connect with others in close-knit office environments where they tackle problems together. Telecommuters are a different breed and have different needs.

So while consultancies, IT professionals and governments say telecommuting will reshape the Australian workplace, it’s best to take it with a grain of salt. One reason why so many technological predictions don’t come true – remember the 1967 forecasts of futurist Herman Kahn of a 30-hour workweek with 13 weeks of vacation per year – is that the technological progress everyone raves about tends to happen only in a small part of the economy. That’s why only a fraction of the Australian workforce telecommutes now.

Still, learning how to manage it will be an important skill as more companies contract out their work and workplaces shrink.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles