Working at Home Pays Off for Firms

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By James Flanigan, Los Angeles Times

David Neeleman believes he has discovered an answer to the outsourcing of jobs overseas. Call it "homesourcing."

"All of our reservation agents work at home," says the founder and chief executive of JetBlue Airways Corp.

Neeleman first tested the idea at Morris Air, which he co-founded in the early 1980s and sold to Southwest Airlines Co. in 1993. Now at JetBlue, which he launched in 1998, Neeleman has become hooked on the concept.

JetBlue has 700 reservation agents working from their abodes (one pictures them sitting there in their robes and slippers, the fridge just a few feet away) with company-supplied personal computers and second phone lines.

To be sure, their wages of $8.50 to $10 an hour are way above the $2 to $3 a day that call-center operators in India and the Philippines often earn.

But Neeleman figures that homesourcing boosts the bottom line in other ways. "With home working you get more mature people who stay with you," he says. "There isn't constant turnover." What's more, he adds, employees who take care of business from home tend to "feel better" about their jobs, boosting productivity by an estimated 25 percent.

Forest Hills, N.Y.-based JetBlue isn't the only big company that prefers its workers to keep their distance.

Almost 100,000 or 70 percent of Hewlett-Packard Co.'s employees work from home part of the time.

AT&T Corp., for its part, reported that last year it "received over $180 million in operating benefit from telework" -- tasks performed away from the office by U.S.-based network planners, human-resources managers, sales personnel and others. With fewer corporate facilities to buy and furnish, real-estate savings accounted for a significant portion of the number.

The notion of working from home isn't new, of course. In the 1980s, as the term "telecommuting" came into vogue, some suggested that office buildings and even freeways might one day disappear from the American landscape. Obviously, those forecasts turned out to be wildly off the mark.

And yet, the trend of working from home has grown, driven by the same sorts of technological advances that are allowing companies to shift work abroad. "A long time ago, employees were tied to the mainframe," says Joanne Pratt, a Dallas consultant on telework. "The personal computer and the Internet has freed them."

In 1997, 11.6 million employees of U.S. companies worked from home at least part of the time. Today, that number has soared to 23.5 million -- 16 percent of the American labor force. (Meanwhile, the ranks of the self-employed, who often work from home, have swelled during the same period -- to 23.4 million from 18 million.)

In some eyes, homesourcing and outsourcing aren't so much competing strategies as they are different manifestations of the same thing: a relentless push by corporate America to lower costs and increase efficiency, wherever that may lead.

"Work done in India tends to be more routine, and the telework done in the U.S. more professional," says Tom Miller, a senior consultant to Dieringer Research Group Inc., a Milwaukee firm that compiles annual studies on working at home.

In all, more than a quarter of the 2.25 million call-center jobs in the U.S. are expected to go offshore.

Yet even when it comes to basic call-center work, $8.50-an-hour labor in the U.S. can in fact be competitive with that in places such as India, says Michael Amigoni, vice president of operations for ARO Contact Center Inc. The Kansas City, Mo., firm has 175 employees working from home, handling customer service for insurance and financial services firms.

When telecommunications lines and other equipment are factored in, Amigoni says, "the true cost of work in India is $5 to $6 an hour." And ARO finds that the "remote workforce" it hires for making price quotations on life insurance -- at times a delicate subject -- is well worth the extra three bucks or so per hour.

The types of employees ARO attracts, Amigoni says, "are able to converse and ask the right questions about health matters."

Homesourcing isn't an option for all companies. Investment firms such as Charles Schwab Corp., for instance, must adhere to securities regulations that require them to be under the supervision and in the same place as a principal of the business.

Clearly, not all jobs are suitable to homesourcing, either. "Pilots can't work from home," remarks JetBlue's Neeleman, dryly.

But for many others, the flexibility pays off -- and the idea may be something that even more companies would be wise to consider as the political backlash to outsourcing mounts.

Neeleman and his team love to tell the story of a big snowstorm that crippled the Northeast a couple of years ago. While rivals struggled to get their employees through the blizzard and into their call centers so that they could field worried travelers' questions, JetBlue had no such trouble. Its reservation agents simply rolled out of bed, ready to do their jobs.

Next: 7 Companies Hiring Work-From-Home >>

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