The Value (And Cost) Of Working Away From The Workplace

by Erik Priezkalns / Nov 17

The meaning of the word ‘workplace’ has become fluid like never before.  Instead of representing a specific building, it has come to represent wherever the worker is when they are doing their job.  Is having a remote workforce a benefit or a cost?  Like so much in business, the answer may depend on what you count as a benefit or a cost, and how you count it.

Even a junior accountant should be able to identify the impact of mobile working on basic cash costs.  Benefits to the business are measured in reduced overheads related to the dedicated corporate buildings.  Some examples would include: reduced rents as the business can operate from smaller facilities; reduced expenditure on furniture, fixtures and fittings as staff need fewer desks; reduced costs for heating and lighting; and a reduction in ancillary costs like physical security.  On the flip side, the business bears the extra cost for the equipment, services and support that enable remote working.  This will include at least the laptops and handsets needed for the job, the cost of the telecommunications services to connect people, and the hardware and software to support remote connection.  Incremental costs like laptops and cellphones need to be netted against savings in desktops and desk phones.  It may also be necessary to assess the cost of going beyond the minimum needed for remote working.  For example, the company may pay for or subsidize the purchase of furniture for home offices, the provision of printing and photocopying equipment or services, and the increased use of mail.  Over the last few years, the shifting balance in basic cash costs has encouraged a trend towards mobile working.  Equipment and communications costs are falling whilst technology keeps getting better.  Meanwhile, traditional costs associated with buildings, like electricity, look set to keep rising.  However, not all of these trends need continue as before.  For example, a recession will likely lead to reduced commercial rents.  Whatever the trends, a business needs to look at more than just the basic cash costs when evaluating whether to change its working patterns.  Though these are easiest to measure from an accounting perspective, they will not tell the whole story of how remote working impacts the business.

All businesses need to manage their risk, but few businesses factor risk into their assessment of the costs for mobile working.  This is unfortunate.  Risk is hard to evaluate, but that is why it should be evaluated.  Mobile working can greatly change the dimensions of risk for a business.  For example, there may be less risk of an interruption in business with a distributed workforce.  A distributed workforce may be able to continue unaffected when a central location is rendered inoperative due to a fire or flood.  This in turn may reduce costs related to insurance or to business continuity planning.  On the other hand, there will need to be adequate planning and investment in backup resources for communication and access to common data and applications, in case access to the primary resource is interrupted.  There need to be contingencies for every eventuality that may affect the remote worker, from the loss of a server at a given location to the need for redundancy throughout network connections.  Distributed working will often mean remote access to data, with an implied security risk.  Poor security risks both corporate espionage and the legal and the reputation damage caused by any violations of customer confidentiality.  To offset this requires an up-front and ongoing investment in security to deny access to unauthorized users and minimize the impact if data is lost.  For example, data models should be designed to limit the need for staff to work with remote copies of sensitive data.  Robust and secure protocols are needed for transmitting information.  Because laptops and memory sticks will inevitably be lost or stolen from time to time, encryption should be used to prevent the exploitation of the data stored on them.  Ignoring these preventative steps only increases the danger of that the business will be more severely and adversely impacted sometime later on.

Legal and regulatory responsibilities relating to mobile working are closely allied to the costs and benefits associated with risk.  Obligations vary from place to place, but any employer should carefully consider the potential for being held liable for what their employees do, and for what happens to them.  Remote working may change this dynamic.  For example, if an employee has a car crash whilst using a corporate cellphone, can the company be held liable?  Having a corporate policy that bars use of cellphones whilst driving may be a cheap and simple way to reduce the liability, but it may not be effective if, in practice, the company expected their employee to drive and take calls at the same time in order to meet deadline pressures.  Offering staff hands-free kit for their cellphones might be a better investment in the long run.  Remote working may also make it easier for employees to steal and abuse corporate resources, whether using the internet and other communications services for personal reasons or stealing commercially sensitive data by simply taking a laptop.  The company should seek to limit its liability in all the situations where mobile working may exacerbate the potential for misuse of corporate resources.  Similarly, businesses need to research their obligations for providing staff with a safe and healthy working environment, even if they work away from the office.  Again, it is worth noting that a legalistic or accounting approach to evaluating these costs may not be adequate to really assess the impact on the business.  Obligations may vary, and businesses may have differing views on whether these obligations impose a fair or unfair burden upon them.  Underneath the legal jargon, however, there will likely be some worthwhile motivation that the company should consider when assessing its own interests, as well as those of its employees, government and the community.  For example, what is the cost to the business of losing a valued employee in a car crash?  Is it desirable to have employees to be working from a home office that is not adequate as a working environment?  Putting a value to these considerations is much more difficult than the basics of bean counting, but no less important. …Read More

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Cost Savings For Employers of Digital Nomads

by Joshua Howe / Nov 15

With any employee there are questions of return on investment.  The two components of the calculation is the income, what people are producing, and the outgoing, the cost of having individuals decentralized and working from the field

Measuring what people are producing does not vary greatly whether an individual works in an office or from the road or home.   There is an assumption that because an employee works in an office and can be observed, that they’re doing their work and being productive.  The opposite is true of those who are nomads.  There is the assumption that because they’re not being observed, that there is ample opportunity for slacking off.  Both of these have some truth, however, ultimately how we measure an employee’s work is by productivity.

Project management theory focuses not only on the the product but the process, and identifying measurable steps in that process.  In order to measure a digital nomad’s work it is important to have agreed time frames and short term goals.  Maintaining good communication with in house employees and nomads is imperative. Whether this is completed by e-mail, telephone, video conference or in person depends on the needs of the industry, project, and individuals.  For industries which don’t have a project focus, but are service delivery orientated, there are other metrics which can be used to measure productivity, such as billable hours, contact hours, or units sold.

Measuring the cost of digital nomads has two components. There are the cost savings by having a worker decentralized and additional costs compared to office based employees.

• Office Space: Saving on rental or purchase of office space.
• Heating, Cooling and Electricity: With fewer office based employees, and less floor space, heating cooling and electric costs are minimized could mean a substantial savings to a large business.
• Equipment: This can be an area of either savings or cost. Though not working in an office, thus saving on equipment there, individuals may need the equipment in their homes to work effectively.
• Insurance: If the customers are being seeing their homes and offices rather than your business’ office, liability insurance premiums are reduced.
• Personnel: More and more employees are looking for flexible work spaces and schedules. Providing this to digital nomads can translate into happier employees which means more productivity and less turnover resulting in significant recruitment and training savings.
• Travel: Having employees spread out over large geographic area allows employees to be closer to the work rather than having to travel which results in reduced travel costs. This also has the added benefit of better customer service by having better local knowledge and greater face to face contact with your customers.
• Technology: Digital nomads would require a different set of tools to be effective in the field versus in the office. Rather than desktop computers, they would require laptops which traditionally have a shorter life.  They may require remote access to files stored on company servers, wireless Internet access, and mobile phones and accessories.

Having a mobile workforce means exploring what productivity means to you as the employer and having clear communication of goals and progress.  The benefits of having digital nomads outweighs the costs. It can lead to reduced infrastructure costs, better connections with customers, and happier employees.  All of which are cost savings to the employer.

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Distributed Workforces Are A Fact Of Life

by Chris O'Donnell / Nov 14

Today’s knowledge worker increasingly expects workplace flexibility as a standard part of the employment contract. It may be explicit, or it may just be implied. However the days of everybody being in the office at 8 AM are gone, and they are not coming back. Ordering the entire distributed workforce back to the office in most situations will probably result is an immediate wave of resignations, and reduced productivity from the rest as they spend their time looking for jobs. Neither is likely to be good for ROI. And if it is, that probably points to a serious recruiting issue at your company!

If we accept that distributed workforces are a fact of life, then measuring the return is no different than measuring the return on any other employee. Employees are paid to do a job. Whether it is sales or writing code, mature companies probably already have standards in place to measure those issues. The distributed employees shouldn’t be under different standards just because they work from home or coffee shops. It comes down to being results focused, not activity focused. If your sales rep has a $1 million quota, and he regularly meets or exceed it, should you really care how he spends every minute of his day?

Company wide, there are several areas where companies can look for returns associated with a distributed workforce. Although there are quantitative benefits available, I think a lot of the ROI associated with a nomadic workforce is more qualitative in nature.

Fixed Costs: Digital nomads don’t consume office space, parking places, HVAC or any other expense associated with every employee being in the same place at the same time. Office consolidations and closings due to the growth of nomadic employees can certainly be quantified.

Salary: Can you pay nomadic employees less? Certainly a home based employee in Omaha NE will probably be satisfied with less salary than somebody doing the same job in San Fransisco. It’s a simple cost of living issue. Also, the lifestyle benefits for nomadic employees (no commute, being home for dinner, ability to make the school play at 6 PM, etc) are clearly valuable to employees. Given two otherwise identical jobs, I think many of us would happily take 5% less in salary to be a digital nomad versus enduring the commute and office lifestyle for the same work.

Turnover: Are digital nomads less likely to change jobs? Studies have shown that work location flexibility is an important factor in job satisfaction, and satisfied employees are less likely to jump ship.

Personal productivity: Are digital nomads less likely to take a sick day? Personally, I don’t think I have ever called in sick when working from home. If I’m well enough to sit on the couch and watch TV, I’m well enough to sit in front of the computer and at least keep up with my email. It might not be my most productive day, but it’s not a total loss either. Also, a recent HR World article suggests that telecommuters are more productive than their office bound coworkers. This is due to less distractions, meetings, and less commute related stress. The same article also reports that flex time workers (which is a step in the direction of a digital nomad) exhibit healthier lifestyles. It probably doesn’t matter if you sleep in or exercise during the time you would be commuting if you went to the office. Either is healthier than sitting in traffic!

In summary, the question to ask is “Are we as a company better off today” and then look to both quantitative and qualitative factors for supporting data. Some of it will certainly be traceable to your distributed workforce. However, the distributed workforce is not really optional anymore, and it’s going to continue to become even less optional.

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Unseen Attackers

by Michael Kramer / Nov 13

Reason for concern

There are many security concerns for the mobile professional. Every mobile worker should be briefed on the basics of security. These concerns should be akin to keeping a wallet or purse secure, it becomes second nature for most people. Would anyone take their private files out of their file cabinets and post them on a billboard or hand them out to others? Probably not, but many of us are doing that every day with our electronic files. The issue of mobile security can be broken down into three categories: physical security, data encryption, and wireless security.

Physical security

One of the most obvious aspects of protecting electronic data and devices while traveling is their physical security. The best way is also the most simple; keep an eye on those electronic devices at all times. Some suggestions that may not be as obvious include bringing a locking cable while traveling. The laptop should be locked down while at remote locations or anywhere it may be left out of sight. The cables are not theft-proof, but are usually effective deterrents.

Encryption

Another important security measure that mobile workers should take is to encrypt their portable electronic devices. Laptop hard-drives should be encrypted with either Vista BitLocker, or a third-party program such as Pointsec. Users must know that encryption is easily defeated if the machine is logged in or left in a “sleep mode”. Encryption is only truly effective when the laptop is shut down and turned off. Also, it’s nearly useless if there is no password at boot-up.

Wireless security

Though the only sure way for a laptop to be secure when it is off, there are several tips for the mobile worker to stay safe when networking. In addition to using anti-virus software and firewall software, it is really not a good idea to connect to any wireless network or hotspot. If absolutely necessary to connect to a WiFi network that is not yours, at least do not connect to any adhoc network. This could easily be a stranger’s computer, and usually is. The best way to be safe is to use a more private connection, the type you would get when using a wireless broadband card. There are many aspects to staying secure, but these basics will set the framework and provide a good starting place.

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Digital Nomad’s Swiss Army Knife

by Doug Harper / Nov 12

There’s no doubt that working as a remote team can have its challenges (I’ve been doing this on and off for about 5 years) but here are some great tools to help reduce the distance between individuals and teams who are working together remotely.

A few of the most valuable tools in the remote Swiss army knife are the IM blade, the Cell Phone blade and the online collaboration corkscrew.  Even better with the remote Swiss army knife is that you can actually use some of these tools together.  One of my favorites is the IM and online collaboration (like gotomypc.com).  It starts as a question on IM and turns into an online meeting with a voice call.  This allows each party to see exactly what the other is working on and closes the miles between workers.  This is great for troubleshooting when you can’t actually see what the other person is seeing.  This is great for the day to day issues that come up no matter the type of project that’s being done.

That being said, remote work needs to happen within a framework of defined deliverables and probably a project plan with assigned tasks and deadlines.  The project plan is the engine that keeps the project wheels rolling and the various technologies are used to make sure the wheels are all rolling in the same direction.  Waiting until the end of the project to see if it’s all “ready” is pretty much a recipe for disaster.  IM or instant messaging should be adopted by everyone who’s working on the remote project.  In addition to an attendance manager, it makes it extremely easy to communicate with your remote team.  Milestones and conference calls are needed along the way to ensure that progress is being made toward the goal.  Just like with most things in life you need the right tools and as always, organization is the key.

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Displacing Corporate Overhead Onto The Digital Nomad

by Zack Miller of Techdirt / Nov 11

While it’s great to talk about productivity and satisfaction from the employee’s point of view, much of the ROI for the business comes from lowering overall overhead and displacing some of that onto the employee.

I think it’s important to look at the ROI from 2 points of view: the worker’s and his employer’s.

Employer’s point of view

I recently had a gig with an internet firm which began as a completely distributed workforce.  There wasn’t even a home office.  We managed our time, our teams, and our tasks completely remotely.  From an employer’s point of view, this kept costs bargain-basement low.  Since everyone worked from home, the firm was spending almost nothing on office space.  I ran biz dev so I traveled (but no more than I would have working from a traditional office space).  There was not even a secretary on staff.  No corporate bloat.  The product of this experiment was that the firm stayed lean and mean and was able to reach profitability very quickly.

How was an interent startup with a growing staff able to do this within a year?  I think it’s because …Read More

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How To Tell If Your ROI Is Positive

by Chris Blaskey / Nov 7

Converting to a largely remote workforce has a significant upfront cost, both in tangible ways (such as supplying remote workers with laptops) and intangible ways (loss of face-time, and time spent learning to adjust to the new work setup.) In most cases, however, the long term ROI makes up for this many times over. When trying to determine ROI, there’s 4 key factors to consider:

1. Costs - What costs will the conversion incur?
2. Savings - What costs will be saved?
3. Profit Increases - What’s different about having mobile workers that will increase profits, and how much extra profit will result?
4. Profit Decreases - What’s different about a nomadic workforce that decreases profits, and how much profit is lost as a result?

Ultimately, of course, …Read More

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