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9/16/2010

Working Virtual: Goodbye Office, Hello Telework

Working Virtual: Goodbye Office, Hello Telework

By Ira S Wolfe, Success Performance Solutions

Whatever stats or studies you look at these days, the result is the same: telework is growing rapidly. The convergence of technology, a changing workforce, and a recession that forced companies to look for new ways to cut costs suddenly enticed many executives and business owners to take a real hard look at taking their company virtual.

Can you see an office-less company in your future?

Whatever stats or studies you look at these days, the result is the same: telework is growing rapidly. According to the research firm Forrester, 34 million Americans are working from home at least part time. The number of people who worked from homegrew from 9.5 million in 1999 to 17.2 million in 2008.

But it’s not just employees and contractors who are working remotely. The convergence of technology, a changing workforce, and a recession that forced companies to look for new ways to cut costs suddenly enticed many executives and business owners to take a real hard look at taking their company virtual.

Based on the number of articles on blogs, questions on LinkedIn discussion boards, and a feature story in the April 2010 issue of Inc. Magazine, going virtual is a real decision many CEOs and owners are wrestling with.

The most tantalizing and obvious benefit of going virtual is significant savings - no rent, no building maintenance, no fees, no real estate taxes. Getting rid of the office and working remotely also has appeal to younger workers, new parents, and contract workers. It is also better for the planet.

But eliminating all the costs normally associated with owning, renting, and maintaining an office has a blinding appeal if the CEO/business owner doesn’t go virtual with his eyes wide open.

I was one of those business owners who took the plunge into the depths of the virtual business world just a few months ago. For the record I had been the teleworker in my business for the previous 6 years. For those 6 years, my employees went to work in an office – and I worked remotely. When it came time to renew the lease, my employees and I evaluated several alternative office locations including staying put. But after very little deliberation, they opted to work from home. The decision was made. My business would become office-less.

All-in-all, we have no regrets. In fact, the transition was virtually uneventful (pun intended!) barring a few technology hurdles and hitches. But compared to over a dozen moves during the past three decades – a combination of business and residential - going virtual was a piece of cake.

Despite the rosy picture I’ve painted, I will be the first to point out that a virtual business is not for everyone. Based on my experiences, I recommend management, partners, and employees consider the following questions.

1. Have all the senior managers, owners, and/or partners worked virtually before? If not, I'd encourage everyone to take the next 30 or more days to work from home and see how it works. Spending your entire adult life working in an office causes you to develop habits – eating lunch with co-workers or scheduling meetings to break up the day. Working from home disrupts the routine. You may like it or hate it. If the decision to go virtual is already a done deal, this time will give management the opportunity to work out the technical glitches and emotional hiccups.

2. Do the same thing for your employees. Even if you provide the technology for everyone to work virtually, not all your employees may be disciplined enough or comfortable enough to do so. In other words, do you have the right people in place to do this? In addition, do the employees have space for a home office or will they be forced to use the kitchen table? What about office furniture and equipment? Who will provide it and where will they put it?

3. How will you hold out-of-sight employees accountable? Even if your employees don’t always get along in the traditional office space, a co-worker or manager is only a few steps away from a face-to-face meeting when it comes time to work out a disagreement, adjust priorities, mentor an employee, or collaborate on a project. When everyone is working remotely, you have altered roles and responsibilities. Instead of employing a group of competent generalists, the expectation is now one based on specialists who are productive, efficient, and good at meeting deadlines without someone looking over their shoulder. Are your employees ready and able for this challenge?

4. When working remotely, high-speed connectivity is critical. Don’t assume every employee has the bandwidth capacity to work from home on a regular basis. In fact, some employees in rural or remote locations may be limited to dial-up or unreliable connectivity. Other workers may not have purchased the fastest Internet service package. Who will pay for the upgrades and monthly service fees? How will co-workers communicate with one another and with clients? Will they use home and/or mobile phones or will you (the employer) be setting up a VOIP (Voice-Over-Internet-Protocol) phone system? Where will your data be stored – on a server or in the cloud? In either case, how will employees access the data? Who will be responsible for setting up and maintaining the necessary technology in each employee’s home?

5. How will your customers react? Will a virtual home alter your "brand" or client's perception? Where will you hold client meetings? Will the neighbors, customers, and competitors think you have gone out of business and going virtual is a prelude to shutting down the business altogether? If employees meet clients, prospects, and vendors in their homes, will the setting be business-like enough for the guests?

6. Supervising employees in a virtual business opens up a quagmire of the unknown. Compliance with compensation, benefits, and safety guidelines are still the responsibility of the employer. But OSHA and Fair Labor Standards Act are still based on the traditional workplace and predicated on a static work week. How will you hire and train new hires and develop current employees? How will you monitor hours worked? What about overtime? How will you handle a dismissal of a terminated employee? If terminated, how will you retrieve the equipment, furniture, and data? It’s not like you can escort the employee out of their own home and pack up their belongings in a box.

It's my belief that many businesses will go virtual over the next few years. But I also believe that many will fail if the decision is driven by the allure of cost savings alone. The savings won't compensate for productivity loss and mismanagement due to human factors relating to working virtually and remotely.

Are you ready to go virtual?

-----------------------------------------

Telecommuting by the Numbers

What would happen to the U.S. economy if everyone who could work from home -- about 40 percent of the work force -- did so half the time. Kate Lister of the Telework Research Network, a San Diego -- based research firm, has a rough idea of what this future state might look like. The figures are annual.

$200 billion productivity gains by American companies
$190 billion savings from reduced real estate expenses, electricity bills, absenteeism, and employee turnover
100 hours per person not spent commuting
50 million tons of greenhouse gas emissions cut
276 million barrels of oil saved, or roughly 32 percent of oil imports from the Middle East
1,500 lives not lost in car accidents
$700 billion total estimated savings to American businesses

Source: Telecommuting by the Numbers
Working Virtual: Goodbye Office, Hello Telework
By Ira S Wolfe, Success Performance Solutions

Whatever stats or studies you look at these days, the result is the same: telework is growing rapidly. The convergence of technology, a changing workforce, and a recession that forced companies to look for new ways to cut costs suddenly enticed many executives and business owners to take a real hard look at taking their company virtual.

Can you see an office-less company in your future?

Whatever stats or studies you look at these days, the result is the same: telework is growing rapidly. According to the research firm Forrester, 34 million Americans are working from home at least part time. The number of people who worked from homegrew from 9.5 million in 1999 to 17.2 million in 2008.

But it’s not just employees and contractors who are working remotely. The convergence of technology, a changing workforce, and a recession that forced companies to look for new ways to cut costs suddenly enticed many executives and business owners to take a real hard look at taking their company virtual.

Based on the number of articles on blogs, questions on LinkedIn discussion boards, and a feature story in the April 2010 issue of Inc. Magazine, going virtual is a real decision many CEOs and owners are wrestling with.

The most tantalizing and obvious benefit of going virtual is significant savings - no rent, no building maintenance, no fees, no real estate taxes. Getting rid of the office and working remotely also has appeal to younger workers, new parents, and contract workers. It is also better for the planet.

But eliminating all the costs normally associated with owning, renting, and maintaining an office has a blinding appeal if the CEO/business owner doesn’t go virtual with his eyes wide open.

I was one of those business owners who took the plunge into the depths of the virtual business world just a few months ago. For the record I had been the teleworker in my business for the previous 6 years. For those 6 years, my employees went to work in an office – and I worked remotely. When it came time to renew the lease, my employees and I evaluated several alternative office locations including staying put. But after very little deliberation, they opted to work from home. The decision was made. My business would become office-less.

All-in-all, we have no regrets. In fact, the transition was virtually uneventful (pun intended!) barring a few technology hurdles and hitches. But compared to over a dozen moves during the past three decades – a combination of business and residential - going virtual was a piece of cake.

Despite the rosy picture I’ve painted, I will be the first to point out that a virtual business is not for everyone. Based on my experiences, I recommend management, partners, and employees consider the following questions.

1. Have all the senior managers, owners, and/or partners worked virtually before? If not, I'd encourage everyone to take the next 30 or more days to work from home and see how it works. Spending your entire adult life working in an office causes you to develop habits – eating lunch with co-workers or scheduling meetings to break up the day. Working from home disrupts the routine. You may like it or hate it. If the decision to go virtual is already a done deal, this time will give management the opportunity to work out the technical glitches and emotional hiccups.

2. Do the same thing for your employees. Even if you provide the technology for everyone to work virtually, not all your employees may be disciplined enough or comfortable enough to do so. In other words, do you have the right people in place to do this? In addition, do the employees have space for a home office or will they be forced to use the kitchen table? What about office furniture and equipment? Who will provide it and where will they put it?

3. How will you hold out-of-sight employees accountable? Even if your employees don’t always get along in the traditional office space, a co-worker or manager is only a few steps away from a face-to-face meeting when it comes time to work out a disagreement, adjust priorities, mentor an employee, or collaborate on a project. When everyone is working remotely, you have altered roles and responsibilities. Instead of employing a group of competent generalists, the expectation is now one based on specialists who are productive, efficient, and good at meeting deadlines without someone looking over their shoulder. Are your employees ready and able for this challenge?

4. When working remotely, high-speed connectivity is critical. Don’t assume every employee has the bandwidth capacity to work from home on a regular basis. In fact, some employees in rural or remote locations may be limited to dial-up or unreliable connectivity. Other workers may not have purchased the fastest Internet service package. Who will pay for the upgrades and monthly service fees? How will co-workers communicate with one another and with clients? Will they use home and/or mobile phones or will you (the employer) be setting up a VOIP (Voice-Over-Internet-Protocol) phone system? Where will your data be stored – on a server or in the cloud? In either case, how will employees access the data? Who will be responsible for setting up and maintaining the necessary technology in each employee’s home?

5. How will your customers react? Will a virtual home alter your "brand" or client's perception? Where will you hold client meetings? Will the neighbors, customers, and competitors think you have gone out of business and going virtual is a prelude to shutting down the business altogether? If employees meet clients, prospects, and vendors in their homes, will the setting be business-like enough for the guests?

6. Supervising employees in a virtual business opens up a quagmire of the unknown. Compliance with compensation, benefits, and safety guidelines are still the responsibility of the employer. But OSHA and Fair Labor Standards Act are still based on the traditional workplace and predicated on a static work week. How will you hire and train new hires and develop current employees? How will you monitor hours worked? What about overtime? How will you handle a dismissal of a terminated employee? If terminated, how will you retrieve the equipment, furniture, and data? It’s not like you can escort the employee out of their own home and pack up their belongings in a box.

It's my belief that many businesses will go virtual over the next few years. But I also believe that many will fail if the decision is driven by the allure of cost savings alone. The savings won't compensate for productivity loss and mismanagement due to human factors relating to working virtually and remotely.

Are you ready to go virtual?


--------------------------------------------------------------------------------

Telecommuting by the Numbers

What would happen to the U.S. economy if everyone who could work from home -- about 40 percent of the work force -- did so half the time. Kate Lister of the Telework Research Network, a San Diego -- based research firm, has a rough idea of what this future state might look like. The figures are annual.

$200 billion productivity gains by American companies

$190 billion savings from reduced real estate expenses, electricity bills, absenteeism, and employee turnover

100 hours per person not spent commuting

50 million tons of greenhouse gas emissions cut

276 million barrels of oil saved, or roughly 32 percent of oil imports from the Middle East

1,500 lives not lost in car accidents

$700 billion total estimated savings to American businesses

Source: Telecommuting by the Numbers

http://www.inc.com/magazine/20100401/telecommuting-by-the-numbers.html

About the author

As president of Success Performance Solutions, Ira S Wolfe helps organizations find and hire the right employees and identify high-potential leaders. He speaks nationwide on hiring, workforce trends, managing the generations in a presentation titled Geeks, Geezers, and Googlization. He is also the author of Perfect Labor Storm 2.0: Trends That Will Change the Way You Do Business.

Source : http://www.super-solutions.com/WorkingVirtual-Telework.asp

8/21/2008

Internal audit leaders: Is HR in your audit plan?

By Lisa Donoho, Protiviti

For most companies, the answer to this article’s lead in question is “no.” The next question then is, “Should it be?” Let us take a closer look.

Think about your company. If you listed the top three major expenditures, what would they be? Chances are that Human Resources (HR) expense is in your top three expenditures and is probably number one. Notice that I said HR expense, not payroll expense. There is a big difference. HR expense not only includes salaries, but also employee incentives and benefits, vacation accrual, taxes, training, workers’ compensation, equipment and supplies, and more. All of which needs to be considered when measuring the true HR cost to the organization. Knowing that, HR (not payroll) is now probably on your top three major expenditures list.

Why is HR not in your audit plan?
Here is one tell-tale reason. HR risk typically has not been a focal point for internal audit leaders or audit plans. In a 2003 global auditing survey conducted by The Institute of Internal Auditors (IIA), internal audit professionals were asked to rate the importance of HR audit projects in the overall audit plan: 36 percent of respondents said HR audits were a low priority, 43 percent said they were moderately important, and only 21 percent rated them very important.

What are some of the other reasons for not including HR in the audit plan? Many companies completely overlook the total, true cost of each employee when developing their audit plan. They may conduct payroll audits, but they often do not look at HR costs from a comprehensive perspective, which is essential to truly understand and favorably impact employee costs. This is true for about 90 percent of the people reading this article. If this does not apply to you, I want to congratulate you because you are in a very small group.

Another common reason for not addressing HR in the audit plan lies with executives and HR professionals themselves. They do not understand or appreciate the manner or measure to which HR decisions impact the organization’s bottom line. Alternatively, they do not see internal audit’s involvement as constructive or meaningful. Now, those of us living out the definition of internal audit in The IIA’s International Standards for the Professional Practice of Internal Auditing know how to bring relevancy and value to an HR audit, but they may not perceive internal audit the same way that we do.

One additional reason could be the internal audit director or audit committee does not see this as a high risk to the organization. That may be true. But with major restatements and accounting scandals surrounding the backdating of stock options and regulations that require executive compensation disclosures, family medical leave, leave with pay, paid holidays and more, organizations must think of HR in its totality to gain an accurate understanding of the risks and business performance opportunities linked to those costs.

However, before anyone agrees to include HR in the audit plan, there must be benefits associated with this addition. What are these benefits? A properly planned and executed HR audit should achieve the following:

Creates an understanding of the true HR cost drivers and associated basket of inherent risks
Leads to more secure employee data
Increases the accuracy and reliability of financial reports and disclosures
Increases the rate of legal and regulatory compliance
Improves business performance
How does this improve business performance?
It is not uncommon for the corporate mission to include “to attract, train and retain top talent” as a key aspect. According to the CFO.com article “What Keeps CFO’s Up at Night?”, a recent survey conducted by Duke University concluded that the number one “internal” concern on the minds of CFOs is attracting and retaining qualified employees, with the cost of health benefits coming in third on their top 10 list of internal concerns. Knowing this, consider these questions:
What if HR is not aligned with the mission and is not hiring, training or paying for performance? You could be hiring the wrong people.
What if HR processes are not geared toward retention or do not proactively detect and effectively manage or mitigate employee turnover? Intellectual capital is walking out the door, and hiring and training costs are higher than necessary.
What if large streams of retiring baby boomers are depleting the organization faster than they can be replaced? Do you have an HR function that is at the leading edge of recognizing cultural changes in work environments? Do they understand and can they relate to the new crop of workers coming up who expect and demand flexible work schedules, telecommuting opportunities and more? HR should be positioned to have an effective voice and a seat at the table to convince senior leadership that the paradigm is shifting and the organization must keep pace by being competitive with its peers. Your organization is then able to adapt and achieve the goals and objectives.
Here is another interesting fact to consider. The typical employee today stays with their employer for three to four years rather than 10 years – which means that turnover is high and the return on investment for each employee may not be fully realized. How can organizations defend themselves against this trend? They must establish consistent and well-communicated policies to retain the best talent by engendering trust and loyalty among employees. The creation and maintenance of those policies should be regularly reviewed in the audit plan.

How do you include HR in the audit plan?
You can start by opening dialogue on the subject with HR executives and members of the compensation committee. Another suggested step is to facilitate a risk assessment to prioritize the risks and opportunities for improving business operations. Here are a few questions to ask during this risk assessment process:
Is the company facing potential system changes or significant business transactions, such acquisitions, divestiture, IPOs or layoffs? If so, HR could seek internal audit assistance to design effective processes and controls for data migration, severance packages or layoff strategies to mitigate the risk of compliance violations, litigation and class action suits.
Is the HR department decentralized? A decentralized department may have inconsistent policies and procedures. Decentralized HR teams could be audited to share best practices across the company and ensure that employee data is secure, policies are met, and contract compliance is in order.
Does HR have controls and processes in place that impact the financial statements? This includes processes and controls for salaries, bonuses, accruals and garnishments of wages, among other things, that, if not properly managed could pose regulatory compliance risks.
Lastly, you can leverage the knowledge and experience of a professional HR risk consultant the first time through this process to accelerate and enhance your success. Until you have the right skill set in-house, it can be the smart thing to do.
http://www.knowledgeleader.com/KnowledgeLeader/Content.nsf/Web+Content/HIIAleadersIsHRinyourauditplan!OpenDocument&Home
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