CSUSB Are Firms Moving away from Telecommuting Case Study

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Telecommuting has been on the rise for years. According to the Bureau of Labor Statistics, about a quarter of workers do all or some of their work at home. And about 40 percent of people who hold management, business, financial operations, and professional jobs do. Sixty-eight percent of workers say that they expect to work remotely in the future.

But not all firms are jumping on the telecommuting bandwagon. In fact, some firms are jumping off it. In 2013, Marissa Mayer, who at the time had just been named Yahoo’s new CEO, ended telecommuting at the struggling Internet-search company. Yahoo’s decision surprised people because telecommuting is prevalent in high-tech industries, particularly in Silicon Valley, where Yahoo is located. How could the firm hope to compete for employees in the area if it ended telecommuting? One tech news outlet called it “the worst decision Marissa Mayer has made in her tenure as Yahoo CEO.”

Yahoo had been struggling. It’s likely that Mayer thought some synergy was being lost by telecommuting because it left fewer Yahoo employees communicating face to face with one another. Mayer had also learned that many of Yahoo’s telecommuters weren’t logged onto Yahoo’s intranet when they were supposed to be and that the company’s offices were nearly empty on Fridays.

The memo Yahoo sent its employees announcing telecommuting would be discontinued read: It is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings.

Shortly after Yahoo ended telecommuting, Best Buy and Hewlett-Packard did the same. More recently, Honeywell and IBM ended the practice, citing the same reasons as Yahoo: Being in the office fosters teamwork and idea sharing. The move by IBM was particularly surprising because the company was an early champion of telecommuting. It published studies on the practice and persuaded its clients that its benefits more than made up for the loss of in-person interaction. The company also developed software to facilitate communications with remote workers.

One thing notable about the companies was that they were all facing tough competitive challenges when they ended telecommuting. Some employees suspected their employers were just trying to coerce them to quit so they wouldn’t have to downsize them. However, there may be a less sinister reason: The CEOs who ended remote working may not think it’s necessarily a bad practice, but that a firm’s HR and other policies can’t be set in stone. In other words, firms have to tailor their HR strategies and the design of jobs to meet the conditions they are facing.

Cassidy Solis, a workplace flexibility program specialist with the Society for Human Resource Management, agrees. “It depends on the business’s circumstances,” Solis says. “And telecommuting is not the only flex work arrangement that an employer can offer.”

Solis notes that shortly after ending telecommuting, Yahoo began offering employees generous amounts of time off and more parental leave. “The beauty of a flexible work arrangement is that it matches both the employees’ and the employer’s needs,” she says. And although the company won’t comment on it, Yahoo has begun allowing employees to work offsite again. Time and changing conditions will tell whether Best Buy, Hewlett-Packard, IBM, and Honeywell do the same.

Discussion Questions

  1. How can a firm know when it’s a good idea to implement telecommuting or not?
  2. Can you think of any other pros and cons related to telecommuting that aren’t mentioned in this case?

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