Article provided by BusinessWeek
Written by: Michelle Conlin
To cut costs, companies such as Capital One are pushing more employees, including even top managers, to work from home
Eve Gelb’s life was once a blur of hour-and-a-half commutes on the 405 Freeway in Los Angeles. What memories: The NPR fatigue. The stale minivan air. The deep identification with the characters in Waiting for Godot. But that’s all in the past. Gelb, a project manager at a giant HMO, SCAN Health Plan, has given up her Ethan Allen-style office, yanked down the family photos, and moved into her home office. Members of the professional class normally have to beg their managers—or at least delicately negotiate—to allow them to work remotely. But in Gelb’s case, it was her boss’s idea.
SCAN is one of a growing number of companies encouraging workers to toil from home. Sure, employers have been doing this for years. But as the recession bites and companies look to save money on real estate costs, what was once a cushy perk is now deemed a business necessity. And that, along with a few choice enticements—voila!, a shiny new BlackBerry (RIMM)—is how companies are selling it to employees, whose emotions range from ecstasy to befuddlement.
The health-care sector is one of the few industries that is still expanding these days, and SCAN is no exception. “We needed to find a way to grow without incurring any more fixed costs,” says Chief Financial Officer Dennis Eder. To encourage more of its workforce to become post-geographic, the company has been offering free high-speed Internet access and gratis office furniture, complete with a couple of delivery guys to set it all up.
Gelb jumped at the opportunity but still found herself struggling to adjust. “I never thought to myself: What would I do with all that extra time that I wasn’t sitting in my car?” So she set about building new routines. “Instead of going on my commute in the morning, I go for a walk,” says Gelb, 40. That makes up for the cardio workout she used to get running up and down SCAN’s four flights of stairs attending meeting after meeting. Now that she simply dials in, “I don’t really move much,” she concedes. On the days when she does come into the office, Gelb shares her old digs with her three direct reports, who also work flexibly. She says they see each other more now than they did when they were squirreled away in their corporate warrens.
Still, persuading managers to embrace no-collar work isn’t always easy. Jack Weisbaum, CEO of accounting firm BDO Seidman, has spent endless hours over the past year managing what he calls the “yeah buts.” These are the old-school execs among his crew who have an arsenal of reasons why untethering workers is a lousy idea: They’ll become Facebook addicts, ignore clients, develop a bad case of alienation. Weisbaum went on the road to nearly all 37 of the firm’s offices to explain how he sees flexibility as a business strategy. He told the troops that allowing people to work where and when they want is enabling BDO to prevent layoffs. The real estate savings are a big reason for that. When BDO moves into its new Los Angeles offices in June, it will be taking over a radically reduced space. “Bricks and mortar are like a noose around your neck,” says Christopher Tower, BDO’s leader for the Western region.
“Homeshoring” has enabled BDO Seidman’s controller for the Western U.S., Grace Renteria, to essentially give herself a raise: the amount of money she saves by working at home, a café, a club—anywhere, in short, that doesn’t require a commute. There’s the $15 a day Renteria used to lay out for lunch. Then her $70 a week in gas. Add wear and tear on her Lexus LS 400. On top of that, she no longer has to lose productivity from co-worker interruptions. “I only go into the office,” Renteria says, “when I don’t have a lot going on.”
“THIS IS DESTINY”
Capital One (COF) is one of many companies where status has long been measured in square footage. The bank’s human resources chief, Matt Schuyler, has had to deal with executives made anxious by the prospect of losing their wood-paneled lairs as they begin new lives as laptop hobos. Schuyler, who is also in charge of corporate real estate, meets with them one on one, whipping out the stats showing how much a skinnier footprint benefits the bank. Then he delivers his sweetener: “The bad news is, I’m taking away your office. The good news is, here’s your new laptop and your shiny new BlackBerry.” Another enticement is the $1,000 managers can dole out to workers to freshen up their home offices. So far the company has cut 20% of its real estate costs. “This is destiny, and other companies will have to get there,” says Schuyler. “We’re at the tip of the iceberg with respect to this stuff.”
None of this is to say the corporate office will disappear. But hard times will accelerate a Digital Age makeover. Adieu to cubicle farms, fixed walls, and standing-room-only conference rooms. Hello to sliding walls, moveable furniture, and lots of lounge areas. Space will be allotted by function, not title. Square footage will be based on office presence, not rank. The flexibility will cut costs and at the same time accommodate both loud talkers and hermits. The new workplace will be less about working alone and more about working together. One thing, however, will never change: The office will remain the primary spot for meetings, collaboration, and, of course, gossip.