In an increasing number of companies, traditional office space is giving
way to community areas and empty chairs as employees work from home, from their
cars or from virtually anywhere. Advanced technologies and progressive HR
strategies make these alternative offices possible.
Imagine it’s 2 o’clock on a Wednesday afternoon. Inside the dining room
of many nationwide offices, Joe Smith, manager of HR, is downing a sandwich and
soda while wading through phone and E-mail messages. In front of him is a
computerequipped with a fax-modemis plugged into a special port on the dining
table. The contents of his briefcase are spread on the table. As he sifts
through a stack of paperwork and types responses into the computer, he
periodically picks up a cordless phone and places a call to a colleague or
associate. As he talks, he sometimes wanders across the room.
To be sure, this isn’t your ordinary corporate environment. Smith
doesn’t have a permanent desk or workspace, nor his own telephone. When he
enters the ad agency’s building, he checks out a portable Macintosh computer and
a cordless phone and heads off to whatever nook or cranny he chooses. It might
be the company library, or a common area under a bright window. It could even be
the dining room or Student Union, which houses punching bags, televisions and a
pool table. Wherever he goes, a network forwards mail and phone pages to him and
a computer routes calls, faxes and E-mail messages to his assigned extension. He
simply logs onto the firm’s computer system and accesses his security-protected
He is not tethered to a specific work area nor forced to function in any
predefined way. Joe Smith spends mornings, and even sometimes an entire day,
connected from home via sophisticated voicemail and E-mail systems, as well as a
pager. His work is process and task-oriented. As long as he gets everything done,
that’s what counts. Ultimately, his productivity is greater and his job-
satisfaction level is higher. And for somebody trying to get in touch with him,
it’s easy. Nobody can tell that Joe might be in his car or sitting at home
reading a stack of resumes in his pajamas. The call gets forwarded to him
wherever he’s working.
You’ve just entered the vast frontier of the virtual officea universe
in which leading-edge technology and new concepts redefine work and job
functions by enabling employees to work from virtually anywhere. The concept
allows a growing number of companies to change their workplaces in ways never
considered just a few years ago. They’re scrapping assigned desks and
conventional office space to create a bold new world where employees telecommute,
function on a mobile basis or use satellite offices or communal work areas that
are free of assigned spaces with personal nick nacks.
IBM, AT;T, Travelers Corporation, Pacific Bell, Panasonic, Apple
Computer and J.C. Penney are among the firms recognizing the virtual-office
concept. But they’re just a few. The percentage of U.S. companies that have
work-at-home programs alone has more than doubled in the past five years, from
7% in 1988 to 18% today. In fact, New York-based Link Resources, which tracks
telecommuting and virtual-office trends, has found that 7.6 million Americans
now telecommutea figure that’s expected to swell to 25 million by the year 2000.
And if you add mobile workersthose who use their cars, client offices, hotels
and satellite work areas to get the job donethere’s an estimated 1 million more
Both companies and employees are discovering the benefits of virtual
arrangements. Businesses that successfully incorporate them are able to slash
real-estate costs and adhere to stringent air-quality regulations by curtailing
traffic and commuters. They’re also finding that by being flexible, they’re more
responsive to customers, while retaining key personnel who otherwise might be
lost to a cross-country move or a newborn baby. And employees who successfully
embrace the concept are better able to manage their work and personal lives.
Left for the most part to work on their own terms, they’re often happier, as
well as more creative and productive.
Of course, the basic idea of working away from the office is nothing new.
But today, high-speed notebook computers, lightning-fast data modems, telephone
lines that provide advanced data-transmission capabilities, portable printers
and wireless communication are starting a quiet revolution. As a society, we’re
transforming the way we work and what’s possible. It’s creating tremendous
opportunities, but it also is generating a great deal of stress and difficulty.
There are tremendous organizational changes required to make it work. As
markets have changedas companies have downsized, streamlined and restructured
many have been forced to explore new ways to support the work effort. The
virtual office, or alternative office, is one of the most effective strategies
for dealing with these changes.
Of course, the effect of alternative officing on the HR function is
great. HR must change the way it hires, evaluates employees and terminates them.
It must train an existing work force to fit into a new corporate model. There
are issues involving benefits, compensation and liability. And, perhaps most
importantly, there’s the enormous challenge of holding the corporate culture
togethereven if employees no longer spend time socializing over the watercooler
or in face-to-face meetings. When a company makes a commitment to adopt a
virtual-office environmentwhether it’s shared work-space or basic telecommuting
it takes time for people to acclimate and adjust. If HR can’t meet the challenge,
and employees don’t buy in, then the program is destined to fail.
Virtual offices break down traditional office walls. Step inside one
and you quickly see how different an environment the concept has created. Gone
are the cubicles in which employees used to work. In their place are informal
work carrels and open areas where any employeewhether it’s the CEO or an
administrative assistantcan set up shop. Teams may assemble and disperse at any
given spot, and meetings and conferences happen informally wherever it’s
convenient. Only a handful of maintenance workers, phone operators and food-
services personnel, whose flexibility is limited by their particular jobs,
retain any appearance of a private workspace.
Equally significant is the fact that on any given hour of any day, as
many as one-third of the salaried work force aren’t in the office. Some are
likely working at a client’s site, others at home or in a hotel room on the road.
The feeling is that the employees of Virtual Offices are self-starters. The work
environment is designed around the concept that one’s best thinking isn’t
necessarily done at a desk or in an office. Sometimes, it’s done in a conference
room with several people. Other times it’s done on a ski slope or driving to a
client’s office. Fonders of the concept wanted to eliminate the boundaries about
where people are supposed to think. They wanted to create an environment that
was stimulating and rich in resources. Employees decide on their own where they
will work each day, and are judged on work produced rather than on hours put in
at the office.
One company that has jumped headfirst into the virtual-office concept is
Armonk, New York-based International Business Machine’s Midwest division. The
regional business launched a virtual-office work model in the spring of 1993 and
expects 2,500 of its 4,000 employeessalaried staff from sales, marketing,
technical and customer service, including managersto be mobile by the beginning
of 1995. Its road workers, equipped with IBM Think Pad computers, fax-modems, E-
mail, cellular phones and a combination of proprietary and off-the-shelf
software, use their cars, client offices and homes as work stations. When they
do need to come into an officeusually once or twice a weekthey log onto a
computer that automatically routes calls and faxes to the desk at which they
choose to sit.
So far, the program has allowed Big Blue’s Midwest division to reduce
real-estate space by nearly 55%, while increasing the ratio of employees to
workstations from 4-to-1 to almost 10-to-1. More importantly, it has allowed the
company to harness technology that allows employees to better serve customers
and has raised the job-satisfaction level of workers. A recent survey indicated
that 83% of the region’s mobile work force wouldn’t want to return to a
traditional office environment.
IBM maintains links with the mobile work force in a variety of ways. All
employees access their E-mail and voicemail daily; important messages and policy
updates are broadcast regularly into the mailboxes of thousands of workers. When
the need for teleconferencing arises, it can put hundreds of employees on the
line simultaneously. Typically, the organization’s mobile workers link from cars,
home offices, hotels, even airplanes.
Virtual workers are only a phone call away. To be certain, telephony
has become a powerful driver in the virtual-office boom. Satellites and high-
tech telephone systems, such as ISDN phone lines, allow companies to zap data
from one location to another at light speed. Organizations link to their work
force and hold virtual meetings using tools such as video-conferencing. Firms
grab a strategic edge in the marketplace by providing workers with powerful
tools to access information.
Consider Gemini Consulting, a Morristown, New Jersey-based firm that has
1,600 employees spread throughout the United States and beyond. A sophisticated
E-mail system allows employees anywhere to access a central bulletin board and
data base via a toll-free phone number. Using Macintosh Powerbook computers and
modems, they tap into electronic versions of The Associated Press, Reuters and
The Wall Street Journal, and obtain late-breaking news and information on
clients, key subjects, even executives within client companies. And that’s just
the beginning. Many of the firm’s consultants have Internet addresses, and HR
soon will begin training its officeless work force via CD-ROM. It will mail
disks to workers, who will learn on their own schedule using machines the firm
provides. The bottom line of this technology? Gemini can eliminate the high cost
of flying consultants into a central location for training.
Today, the technology exists to break the chains of traditional thought and
the typical way of doing things. It’s possible to process information and
knowledge in dramatically different ways than in the past. That can mean that
instead of one individual or a group handling a project from start to finish,
teams can process bits and pieces. They can assemble and disassemble quickly and
Some companies, such as San Francisco-based Pacific Bell, have
discovered that providing telecommuters with satellite offices can further
facilitate efficiency. The telecommunications giant currently has nearly 2,000
managers splitting time between home and any of the company’s offices spread
throughout California. Those who travel regularly or prefer not to work at home
also can drop into dozens of satellite facilities that each are equipped with a
handful of workstations. At these centers, they can access exclusive data bases,
check E-mail and make phone calls.
Other firms have pushed the telecommuting concept even further. One of
them is Great Plains Software, a Fargo, North Dakota-based company that produces
and markets PC-based accounting programs. Despite its remote location, the
company retains top talent by being flexible and innovative. Some of its high-
level managers live and work in such places as Montana and New Jersey. Even its
local employees may work at home a few days a week.
Lynne Stockstad’s situation at Great Plains demonstrates how a program
that allows for flexible work sites can benefit both employer and worker. The
competitive-research specialist had spent two years at Great Plains when her
husband decided to attend chiropractic college in Davenport, Iowa. At most firms,
that would have prompted Stockstad to resignsomething that also would have cost
the company an essential employee. Instead, Stockstad and Great Plains devised a
system that would allow her to telecommute from Iowa and come to Fargo only for
meetings when absolutely necessary. Using phone, E-mail, voicemail and fax, she
and her work team soon found they were able to link together, and complete work
just as efficiently as before. Today, with her husband a recent graduate,
Stockstad has moved back to Fargo and has received a promotion.
Great Plains uses similar technology in other innovative ways to build a
competitive advantage. For example, it has developed a virtual hiring process.
Managers who are spread across the country conduct independent interviews with
candidates, and then feed their responses into the company’s computer. Later,
the hiring team holds a meeting, usually via phone or videoconferencing, to
render a verdict. Only then does the firm fly the candidate to Fargo for the
HR must lay the foundation to support a mobile work force. Just as a
cafeteria offers a variety of foods to suit individual taste and preferences,
the workplace of the future is evolving toward a model for which alternative
work options likely will become the norm. One person may find that telecommuting
four days a week is great; another may find that he or she functions better in
the office. The common denominator for the organization is: How can we create an
environment in which people are able to produce to their maximum capabilities?
Creating such a model and making it work is no easy task, however. Such
a shift in resources requires a fundamental change in thinking. And it usually
falls squarely on HR’s shoulders to oversee the program and hold the
organization together during trying times. When a company decides to
participate in an alternative officing program, people need to adapt and adjust
to the new manners. Workers are used to doing things a certain way. Suddenly,
their world is being turned upside down.
One of the biggest problems is laying the foundation to support such a
system. Often, it’s necessary to tweak benefits and compensation, create new job
descriptions and methods of evaluation and find innovative ways to communicate.
Sometimes, because companies are liable for their workers while they’re on the
clock, HR must send inspectors to home offices to ensure they’re safe.
When Great Plains Software started its telecommuting program in the late
1980s, it established loose guidelines for employees who wanted to be involved
in the program. they pretty much implemented policies on an unscientific basis.
Over time, the company has evolved to a far more stringent system of determining
who qualifies and how the job is defined.
For example, as with most other companies that embrace the virtual-
office concept, Great Plains stipulates that only salaried employees can work in
virtual offices because of the lack of a structured time schedule and the
potential for working more than eight hours a day. Those employees who want to
telecommute must first express how the decision will benefit the company, the
department and themselves. Only those who can convince a hiring manager that
they meet all three criteria move on to the next stage.
Potential telecommuters then must define how they’ll be accountable and
responsible in the new working model.
Finally, once performance standards and guidelines have been created,
Great Plains presents two disclaimers to those going virtual. If their
performance falls below certain predetermined standards, management will review
the situation to determine whether it’s working. And if the position changes
significantly and it no longer makes sense to telecommute, management will have
Other companies have adopted similar checks and balances. They are
training HR advisers to make accommodations for the individual, but to not make
accommodations for the person’s job responsibilities.
IBM provides counseling from behavioral scientists and offers ongoing
assistance to those having trouble adapting to the new work model. By closely
monitoring preestablished sales and productivity benchmarks, managers quickly
can determine if there’s a problem. So far, only approximately 10% to 15% of its
mobile work force has required counseling, and only a handful of employees have
had to be reassigned.
Virtual workers need guidance from HR. Not everyone is suited to
working in a virtual-office environment. Not only must workers who go mobile or
work at home learn to use the technology effectively, but they also must adjust
their workstyle and lifestyle. The more you get connected, the harder it is to
disconnect. At some point, the boundaries between work and personal life blur.
Without a good deal of discipline, the situation can create a lot of stress.
Managers often fear that employees will not get enough work done if they
can’t see them. Most veterans of the virtual office, however, maintain that the
exact opposite is true. All too often, employees wind up fielding phone calls in
the evening or stacking an extra hour or two on top of an eight-hour day. Not
surprisingly, that can create an array of problems, including burnout, errors
and marital conflict.
IBM learned early on that it has to teach employees to remain in control
of the technology and not let it overrun their lives. One of the ways it
achieves the goal is to provide its mobile work force with two-line telephones.
That way, employees can recognize calls from work, switch the ringer off at the
end of the workday and let the voicemail system pick up calls.
Another potential problem with which virtual employees must deal is
handling all the distractions that can occur at home. As a result, many firms
provide workers with specific guidelines for handling work at home. It is
expected that those who work at home will arrange child care or elder care. And
although management recognizes there are times when a babysitter falls through
or a problem occurs, if someone’s surrounded by noisy children, it creates an
impression that the individual isn’t working or is distracted.
Still, most say that problems aren’t common. The majority of workers
adjust and become highly productive in an alternative office environment. The
most important thing for a company to do is lay out guidelines and suggestions
that help workers adapt.
At many firms, including IBM, HR now is providing booklets that cover a
range of topics, including time management and family issues. Many companies
also send out regular mailings that not only provide tips and work strategies
but also keep employees informed of company events and keep them ingrained in
the corporate culture.
This type of correspondence also helps alleviate workers’ fears of
isolation. IBM goes one step further by providing voluntary outings, such as to
the Indianapolis 500, for its mobile work force. Even without these events,
virtual workers’ isolation fears often are unproven. The level of interaction in
a virtual office actually can be heightened and intensified. Because workers
aren’t in the same place every day, they may be exposed to a wider range of
people and situations. And that can open their eyes and minds to new ideas and
However, dismantling the traditional office structure can present other
HR challenges. One of the most serious can be dealing with issues of identity
and status. Workers who’ve toiled for years to earn a corner office suddenly can
find themselves thrown into a universal work pod. Likewise, photographs and
other personal items often must disappear as workspace is shared. But solutions
do exist. For instance, when IBM went mobile, top executives led by example.
They immediately cleared out their desks and began plugging in at common work
Not surprisingly, one of the most difficult elements in creating a
virtual office is dealing with this human side of the equation. The human factor
can send shock waves reverberating through even the most sober organization.
This challenge requires HR to become a active business partner. That
means working with other departments, such as real estate, finance and
information technology. It means creating the tools to make a virtual office
work. In some cases, that may require HR to completely rewrite a benefits
package to include a $500 or $1,000-a-month pay for those working at home. That
way, the company saves money on real-estate and relocation costs, while the
employee receives an incentive that can be used to furnish a home office.
Management also must change the way supervisors evaluate their workers.
Managers easily can fall into the trap of thinking that only face-to-face
interaction is meaningful and may pass over mobile workers for promotions. Great
Plains has gone to great lengths to ensure that its performance-evaluation
system functions in a virtual environment. The company asks its managers to
conduct informal reviews quarterly with telecommuting employees, and formal
reviews every six months. By increasing the interaction and discussion, the
company has eliminated much of the anxiety for employeesand their managers
while providing a better gauge of performance. In the final analysis, the system
no longer measures good citizenship and attendance, but how much work people
actually get done and how well they do it.
Still, many experts point out that too much reliance on voicemail and E-
mail can present problems. Although instantaneous messaging is convenient and
efficient, it can overload virtual workers with too much information and not
enough substance. Without some human interaction it’s impossible to build
relationships and a sense of trust within an organization. Sending workers
offsite can boost productivity, while saving costs.
Those who have embraced the virtual office say that it’s a concept that
works. At Pacific Bell, which began experimenting with telecommuting during the
1984 Summer Olympics in Los Angeles, employees routinely have reported 100%
increases in productivity. Equally important: this fits into family and
flexibility issues and that they enjoy working for the company more than ever
Although the final results aren’t yet in, IBM’s mobile work force
reports a 10% boost in morale and appears to be processing more work, more
efficiently. What’s more, its customers have so far reported highly favorable
results. People are happier and more productive because they can have breakfast
with their family before they go off to client meetings. They can go home and
watch their child’s soccer game and then do work in the evening. They no longer
are bound by a nine-to-five schedule. The only criterion is that they meet
Society is on the frontier of a fundamental change in the way the
workplace is viewed and how work is handled. In the future, it will become
increasingly difficult for traditional companies to compete against those
embracing the virtual office. Companies that embrace the concept are sending
out a loud message. They’re making it clear that they’re interested in their
employees’ welfare, that they’re seeking a competitive edge, and that they
aren’t afraid to rethink their work force for changing conditions. Those are the
ingredients for future success.