One of the largest costs for enterprises and for employees today is actually the idea that we should "Go to work". That we leave our homes every day and go to an office, cubicle, lecture room where the employer has set up space and equipment for us.
For the employee, there are real money costs such as having more than 1 car - about $9,000 a year. Public Transport, Meals (surprising what we spend on coffee) Clothes!!!!. If you dig deep, the employees may be spending between $10 and $20 000 a year for the privilege of Going to Work.
The employer has as many costs - space for all - equipment for all - health costs from a stressed work force who may be concerned about their kids, over tired - not able to deal with life's home emergencies etc. The Employer always has to over build the fixed costs of the operation.
Then there are the social costs. A vast transportation system. Congestion. Pollution. Parking. Kids who never see their parents.
Most workers today are white collar. They mainly use a computer for their work. It doesn't make any sense anymore to see work as we did when a worker pulled a lever on a machine.
So why is there not more progress towards working at home? I think that the answer is culture. We have confused attendance and physical control with being productive.
There is already a number of is that don't do this but for many - especially employers - allowing people to work from home seems scary.
"How will I know they are not goofing off?" Answer manage by outcomes and objectives. I am a consultant. I "contract" my work. So can everyone. If you manage by outcome, you will get a better result from your workforce.
"I cant work at home with the kids - they will drive me mad!" That may be true but now daycare can be close to home and less stressful. You may well have 2-4 hours back in the day. You can be there for the plumber.
"How will we deal with our IT?" Most IT systems in offices are antiquated. By giving your workers an allowance, you can have a better overall system that they can maintain. O yes - they will learn very fast.
"I will be lonely - I need the social aspect of the office." Good point but with Social Media you can have friends there all the time. You can also go into the office once a week for the meetings and the social whirl.
There are so many fears and barriers and there are so many good answers to these. If you really want to know everything about this topic and I mean everything The Bible is Undress for Success by Kate Lister and Tom Harnish.
When I say "Bible" I mean that it is complete. All aspects for both the employee and the employer are dealt with including the emotional as well as the monetary issues.
This is such a well-researched book. It is in effect a complete manual that you as an employee or you as an employer can trust.
It is also a timely book. For the circumstances are in place for a Tipping Point. One of the features of a Tipping Point is that the new has to be well-enough established to be codified and made easy. Undress for Success does the codifying and Social Media and the low cost of Computers has made it easy.
For until now, many who worked from home were the pioneers. Like all pioneers, maybe the circumstances were not ideal. But now with Social Media so advanced and home computing so cheap, the time has come for the mainstream to join us.
The origin of the word meant "Household Management" - all economies began in the domestic realm. It was the rise of the factory that changed this. We have been treating white collar work as factory work for too long.
Now the tools and the support system are here to enable the great return "Home".
Now the larger Economy demands that we cut the costs of what we do. There is no better way of doing this that to encourage a return home for workers.
And who will benefit the most? Our kids. Once again they can grow up with a family. Once again, neighborhoods will return. Our use of fossil fuels will drop as will our polluting their world. Once again they will see their parents as whole people. Entire local economies will spring up where people live. The diner will return. The services will return. There will be lots of work locally for all people.
On PEI I wonder what if Government looked at how it may do this and consider what might be the impact if they did. My bet is that we could save millions in direct and indirect costs and rebuild our communities.
As Peak Oil looms on the horizon, that will make commuting impossible, what better plan to prepare?
Please find below a case study I did on this using real numbers about a friend of mine who worked at a Bank and who commuted from Oakville. I did this more than 10 years ago - so the numbers work better today. You will see that after all his costs, Ron really was working for peanuts! It cost the RBC more to have Ron come to work than to pay him!
The Real Costs of Going to Work
When we say "I am off to work" what we usually mean is that we are off to work in a place. This place is a distance from where I live and my community. We go to work not when we feel like it or when we have to but when the custom dictates it. As employers we also often fee that we need is a prestige place that will impress visitors and clients.
An enormous amount of the direct and indirect cost of work is built into this paradigm.
What are the costs for you the employee?
Ron is a manager in Private Banking at the Royal Bank Plaza, one of the most expensive business addresses in Canada. He commutes from the suburbs averaging three hours a day. He has a large office with rosewood furniture. His office is connected to many meeting rooms, most of which are empty. There is a large support staff on call throughout the day. He spends about 10-20 hours a week in internal meetings.
This all looks quite normal. Until you ask him how many clients visit him in a week and how they really want to do business with him.
Ron see 2-3 clients a week in this office. Most of his business is conducted over the phone. Most of his clients would like to connect their computers to Ron's. But this is not allowed. Most of his clients would prefer Ron to come and see them but he does not have the time because he has to spend so much of it at the office. His time at home, he has three children, is very limited because he leaves home at 6:30 am and usually is not back before 7:30 pm. He has a full briefcase which eats into his home life even further. He is not in control of his life. He has run out of time. Here is how the numbers play out for Ron:
Gross Salary - $80,000
Bonus Opportunity - $15,000
So far it looks good Ron can make up to $95,000 a year or $60 an hour (working 200 days a year for 8 hours a day)
But remember the tax man takes 45% of his gross leaving him with $52,250 in his pocket or $32 an hour net.
Because Ron has a family he lives in a suburb and drives to work each day. His wife with 3 children also needs a car. Lease car payments, on one car and depreciation on the second car, insurance, maintenance and gas total $33,000. $27,000 of this expenses is directly related to getting to work. As a banker, Ron has to look the part, so he has to buy no less than 2 suits a year and all the right accessories $1,500 for office clothes.
Ron's direct costs of simply getting to work are - $28,500
Net real take home pay - $23,750 or $15 an hour net.
His commute takes 3 hours a day. This is lost time when he is not with either his colleagues, at work or with his family. Time commuting means that he loses 600 hours a year or the equivalent of 75 eight hour working days. If you costed this out on an hourly basis the indirect costs would be $19,200. The largest real cost to Ron is in having time and energy with his family.
The direct and indirect costs of Ron getting to work are about $42,000 or most of his net pay after tax.
Real Cost for the Employer
Prestige office space that gives the right impression - 1,000 square feet plus use of meeting rooms - $48,000
Time taken in meetings to talk about minutiae (15 hours a week for 40 min. for 40 weeks at $60 an hour gross). Time in meetings on a day basis is the equivalent of another 75 working eight hour days. No wonder Ron has not time either to serve his clients properly or meet his family needs, $36,000.
Support staff to Ron, salary and benefits - $55,000.
It costs the Royal Bank an additional $139,000 to have Ron come to work in the traditional manner.
Think of how you work. Think about the people that work for you. Does your picture look as odd as Ron's? Wheat can you do structurally to change this. What would working at home most of the time do for you and your family and your productivity?
The technology is available now to enable Ron and you to live a very different life!
