Report 2003-015- AMR - Assessment of Reducing Infrastructure Cost Through Increased Use of Telework

Our review found that implementation of frequent telework could result in substantial net savings for each of the four field offices we studied. The cost model shows net savings of about $1.3 million in the first five years, with substantial savings every year thereafter. The table below shows that each office¹ achieves substantial cost savings.

Cumulative Savings (Negative Numbers in Parentheses)

Source: Clifton Gunderson LLP, EEOC Telework Cost Model, August 2002

These cost savings are calculated using the Optimum Model, whereby 85 percent of those employees well suited for telework (Investigators, Administrative Judges, and Trial Attorneys, and Mediators) telework two or more days per week, allowing more efficient use of central office space through office sharing or similar arrangements. Cost savings under the Survey Model are about one-half of those in the Optimum Model. The Survey Model uses the number of interested teleworkers as self-identified in the survey. Both models include office sharing that results in reduced space needs, thereby lowering costs for real estate and producing savings that are substantially higher than the costs to set up and maintain a frequent telework program. Cost savings for the offices in commercial space depend on implementing frequent telework when a lease expires (the Washington Field Office and Miami District Office leases expire in April 2004).

These savings, and the detailed analysis presented in this study, concern frequent telework at the four locations we visited. Therefore, the study does NOT draw conclusions or make recommendations favoring implementation of frequent telework differently from described in the study and/or at locations not covered in this study (e.g., implementing frequent telework in Detroit without purchasing necessary equipment and providing training).

Telework, also referred to in the federal government as Flexiplace, is a work arrangement in which employees perform their job duties away from their central workplace occasionally or frequently. Many private and public organizations cite telework as a method to achieve many benefits, including real estate savings, improved productivity, and increased employee satisfaction. Frequent teleworkers need not have space that is dedicated for their personal use. Therefore, we built our cost model with the assumption that each teleworker would share an existing office and would be assigned an individual workstation. Accordingly, no desk sharing is required. This eliminates the need for frequent teleworkers to reserve a given workspace for their use (known as hotelling).

This report is the result of an Office of Inspector General (OIG) review of potential costs and benefits of frequent telework at four EEOC field offices. The primary objective was to determine if EEOC can save on infrastructure costs and achieve other benefits through extensive use of telework, while sustaining or improving mission performance.

Key questions addressing the objective included:

• What types of staff are suitable for frequent telework?
• How do lease conditions affect the cost-effectiveness of frequent telework?
• What equipment, training, and other items does staff need for productive telework?
• What are the impressions of Managers and staff on frequent telework?

The review was conducted in accordance with the applicable Generally Accepted Government Auditing Standards as published in Comptroller General's Government Auditing Standards, 1994 Revision III, and took place from October 2001 through September 2002.

Our review found:

• Administrative Judges, Investigators, Mediators, and Trial Attorneys are well suited for frequent telework
• Most Managers, Supervisors, and staff see substantial benefits for frequent telework, including providing opportunities for focused, concentrated thought, better work-life balance, monetary benefits, and reduced stress
• Many staff are concerned whether some individual staff, and the office as a whole, can meet the needs of customers and stakeholders in a frequent telework environment
• Frequent teleworkers need these items to be effective--computer with standard EEOC software, capability for good quality copying, faxing, and printing, internet service, EEOC email access, strong phone service–including long distance calling, telework training, and additional storage space
• For the two offices in commercial spaces (Washington Field Office and Miami), our project verified that timing for implementing telework is critical for cost savings. Cost analysis and expert opinion show that commercial space is prohibitively expensive to vacate before the lease expires
• Savings are significantly higher under the Optimum Model than under the Survey Model. After five years, cumulative savings for the Optimum Model are $1.3 million, which is $600,000 greater than the Survey Model savings—$0.7 million
• Annual savings are strongly negative in the first year, due to start up costs. In the second through fifth years, savings are large and steady
• Because the lease for the Headquarters building expires in 2008, and simply vacating commercial space before lease expiration is not cost effective, it would be challenging for EEOC to achieve real estate savings at its Headquarters building by simply vacating.