It has been nearly impossible to avoid all of the press coverage surrounding the escalating price of gas lately, but chances are that you haven’t asked yourself what high energy prices have to do with HR. The answer is simple: Everything that affects workforce productivity should be addressed by a truly strategic HR function. Rather than waiting for national gas prices to top out this sum, HR leaders should act now by enabling more remote work options that help inflation-battered employees save on energy costs.
Employees will not be the only ones to benefit. Studies show that telecommuters are often more productive than office-bound employees doing the same work. Cisco Systems, for instance, estimates a 25 percent increase in worker productivity among telecommuters. In addition, the secondary benefits of leveraging more remote work stack up quick. Cisco Systems, Sun Microsystems and IBM have saved millions on real estate costs; Deloitte estimates a $40 million savings in reduced employee turnover costs; and Google has found that you can often hire higher-quality talent by taking the work to the talent.
If you doubt the visibility of this issue among workers, eavesdrop on what they are talking about. Chances are you’ll overhear numerous conversations about the cost of gas or groceries throughout the day. While some items have actually gotten cheaper, the increase in the cost of goods that people buy frequently is affecting your employees’ budgets.
Rising costs are leading to increased rates of depression and increased commuting time as employees shift to public transportation, both of which decrease employee productivity. In addition, higher energy prices are affecting home heating and air conditioning bills. While real wages have kept pace with inflation in most markets, the uptick in the price of goods purchased frequently is driving the perception that "real" income is declining. As a result, workers with specialized skills who understand their value in the global talent economy are exerting pressure to raise wages. When demands are not met, turnover rates increase and individuals seek work closer to where they live.
Some HR departments are way ahead of the curve: The most obvious action to consider is increasing the number of remote work options that are available to employees. Nearly 60 percent of American workers state that they would like to have remote work options, yet only 18 percent do. A few firms are taking the lead, allowing more than 50 percent of employees to work remotely. Best Buy, for example, created a breakthrough program known as the Results Only Work Environment (which won a Workforce Management Optimas Award). It affords employees working in their corporate office the freedom to choose when and where they work, as long as they produce negotiated results. Early evidence suggests the new workforce strategy is producing productivity gains as high as 35 percent. Other major firms that have done extraordinary things with remote work options include Capital One, Xerox, Agilent, McGraw-Hill and Microsoft.
Both Sun and Microsoft have begun providing remote "touchdown spaces" in suburban locations closer to where employees live. This option allows employees to access secure networks and collaborate with co-workers one or more days a week without having to drive long distances.
Some action steps: There are many things that HR can do, but the first option should be to re-assess which jobs can be done remotely—at least one day a week. Next, invest in technologies that support or enable workforce collaboration independent of the workers’ locations, including conference phone lines, wikis, online forums, videoconferencing and other Web-based meeting platforms that keep dispersed workers connected.
While it is certainly true that many in HR and line management still believe it’s harder to manage workers you can’t see, leaders need to demand change. They can point to the growing number of success stories to demonstrate that personal biases to maintain the status quo will not be tolerated. Forward thinkers in HR need to develop education that demonstrates with statistics and examples that more jobs can successfully be accomplished remotely.
It might seem crazy to some that HR would consider energy, grocery and housing prices among the things that should drive HR strategy, but that’s old-school thinking. If HR is to become more than an overhead function role, it must become an internal productivity consulting center, providing solutions to managers for every issue that affects workforce productivity.
Workforce Management, June 23, 2008, p. 66 -- Subscribe Now!