Does telecommuting make economic sense for companies?

A major reason for the low take-up rate of telecommuting is that companies are not convinced of the economic benefits of telecommuting. They believe most of the benefits accrue to the workers but not the company. The paper presents the findings of a cost benefit analysis. Four categories of costs and benefits are identified. The analysis considers three categories of workers: managers, professionals and clerical workers. The results show that although savings from rent and overheads are significant, they are not the most important benefits. The main benefit comes from an increase in productivity. The initial startup and capital costs are significant, particularly for managers and professionals. However, in the long run, operating costs and management costs are more important. The optimum arrangement is for managers and professionals to telecommute two to three days a week and for clerical workers to telecommute at least three days per week.