Q: I'm a senior executive in a five-year-old software business with about 95 employees. One of our best engineers recently asked if she could telecommute two or three days a week to have more time with her kids. If I agree, I'm afraid it would set a precedent for others who might want to do the same. And if I say no, I could lose a good employee. Do you have any advice?
--L.K., Boston, Mass.

A: Telecommuting is a delicate issue for many companies for just the reasons you suggest. Nonetheless, it's catching on with small businesses. Of about 9.1 million telecommuters in the U.S., more than 65% work for companies with fewer than 100 employees, according to research by International Data Corp./LINK. Do they all know something you don't?

As with most privileges in the work force, a company has the right to determine who qualifies and who doesn't. That said, maybe you shouldn't be so concerned. There's mounting evidence that telecommuting may actually be good for your business. In a 1996 survey of telecommuters by Smart Valley Inc., a Silicon Valley nonprofit group, about 85% of respondents said their personal productivity increased by 25% or more when working away from the office. On average, telecommuters work longer than nontelecommuters (42.6 hours per week vs. 40.3 hours per week) and more than one-third attribute higher employee morale to the greater flexibility and lower stress of telecommuting. Smart Valley also found that significantly more creative work -- thinking, writing, analysis, and design (the stuff you're really paying for) --- gets done at the telecommuter's home location than in the office. The only function that gets accomplished more at the office is (surprise!) meetings. One in five survey respondents also thought that customers were more satisfied -- perhaps because telecommuting employees are more mobile and able to respond to their needs more efficiently.

Probably the biggest kicker for many small companies is that employees are easier to attract and retain. When asked if two companies offered them a job but only one offered telecommuting as an option, a whopping 91% of survey respondents said they'd favor the telecommute offer. This may be an especially important factor in your high-tech industry and city where experienced technical personnel are hard to come by.

But don't let all the benefits coax you blindly into a telecommuting program. Managing workers outside of the office is, well, hard work. You need to establish clear policies that deal with time-reporting, performance goals, work hours and overtime, and leaves. Even health and safety policies that apply at work, as stipulated by the Occupational Safety & Health Administration, need to be addressed in telecommuters' home offices.

And as your work policies grow more flexible, your communications infrastructure had better be up to the task. Remote access applications and E-mail need to be available to off-site employees, whether through a high-speed Internet connection such as an integrated services digital network (ISDN) account or a local-area network.

Finally, be ready to address some of the less tangible issues. Telecommuters often complain that they don't get as much recognition by managers and that their career opportunities are more limited. Like any social contract, telecommuting won't work without mutual trust and clear communications between supervisor and telecommuter. So if you decide to take the plunge, make sure you're both prepared for the ride.

For more information about telecommuting, see Business Week's Personal Business Special Report in the Oct. 12, 1998, issue.

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