A decade or two ago, one would have been hard-pressed to name any CEOs advocating for empty parking lots and office cubicles. Fast-forward to the 21st Century, where over 50 percent of the workforce can be mobile on any given day, and being out is in.
According to a 2008 benchmarking study by Runzheimer International—which focused on assessing employee mobility management trends, as well as financial and productivity metrics of leading organizations—54 percent of U.S. employees today are in positions considered highly mobile (1).
As more and more work is being done outside of the traditional office space, organizations must become highly competent in strategically managing their employee mobility programs. The payoff in terms of improved organizational agility, better employee relationships, and revenue growth is significant. From the cost savings standpoint alone, organizations can improve profitability by 1-4 percent.
Technological advances enable employees working outside of traditional offices to maintain (and in some cases increase) productivity compared to their counterparts working within corporate facilities. While empty offices and cubicles are an unwelcome sign of excess capacity from a real estate standpoint, they can be a leading indicator relationships with prospective clients and partners are being developed, ideas for new products and services are being identified, and client needs are being met.
The Costs are Significant
While most organizations accrue expenses related to at least 3-4 areas of employee mobility, few have taken the time to tally up their mobility expenses across the board. When all programs are combined, the total investment in mobility is significant…yet most organizations don't realize it and many cannot track it.
When total employee mobility expenses are divided by the total number of workers employed, regardless if employees are mobile or not, investments approximate $7,208 per employee per year. This amount is comparable to employer costs of providing health insurance to employees (2).
Companies Investing More Grow Faster
Runzheimer's benchmarking study separated participating organizations into two revenue growth groups—firms with two percent or less of revenue growth year over year and companies growing at 10 percent or more annually. As measured on a per-employee basis, and regardless of whether an employee is mobile, companies with high revenue growth rates spend more on mobility in comparison to firms with stagnant or declining revenue (3).
Business Model for Total Employee Mobility
Total Employee Mobility, as defined by Runzheimer International, is the process of placing the right employees in the right location when they are needed most. This process removes geography as a barrier to growth and success for organizations. Employee mobility approaches within the typical organization appear in 3-6 different areas supporting two key business objectives: enhancing talent management capabilities and/or enabling revenue growth.
Making an investment in one area can affect others. For example, virtual office and business travel programs can be viewed as substitutes to domestic relocation or international assignments.
At the same time, if an employee chooses to conduct additional meetings via audio, Web, and video conferencing, virtual office can, to various degrees of its application, replace business travel or business driving.
The Benefits of Integration
CEOs seeking new opportunities for cost savings, revenue-generating capabilities, and greater organizational agility must look at how their mobility programs are managed. One example is a leading pharmaceutical company that took a cohesive approach to its travel and virtual office program management. It created a reporting dashboard tracking the number of trips by duration of overnight stays as well as use of travel alternatives such as audio, video and Web conferencing tools for each business unit.
Because of this effort, the company successfully achieved a 20 percent reduction in the number of business trips up to one night in duration.
Other organizations are following suit, from launching integrated expense reporting solutions for all of their mobile employee expenses to policy and process implementations providing employees with the most reasonable transportation option available—whether it be traveling by commercial airline, corporate aircraft, or vehicle.
Embarking on Total Employee Mobility
As mentioned at the beginning of this article, in the 21st Century, being out is in. An integrated approach, when properly executed, yields competitive advantage. That said, as with any improvement initiative that involves many different areas in the organization, transformational improvements are only possible when a senior executive pushes for change. In the absence of this leadership, the gravitational pull will always be toward marginal gains.
Visibility across your organization is the first step. You can't manage what you don't measure. If cost savings, greater agility, and better employee relationships sound attractive, and if a substantial improvement in operating income is appealing, the case for action is strong.
1, 3. "Total Employee Mobility Benchmarking Report," Runzheimer International, October 2008.
2. "Employer Health Benefits 2007 Annual Survey," The Kaiser Family Foundation/Health Research and Educational Trust (Kaiser/HRET), September 2007.
Greg Harper is president of Runzheimer International.