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Wednesday, February 10, 2010

Budget Buster

Snow So, I was wondering about all the "costs" of this epic winter and associated snows.

The Federal Government has been shut down for 3 consecutive days due to the weather. This is the first time this has happened in over 15 years!

One estimate puts the "cost" of the shutting down the federal government for a day at roughly $100 million in lost productivity and opportunity. Meaning that so far this winter has cost the tax payers nearly $400 million.

This winter is definitely one for the record books. By the time it is all over, Punxsutawney Phil say 6 more weeks, this will be the snowiest winter in 100 years.

Businesses are also impacted by the snow. Often businesses are either closed or not properly staffed due to employees not able to get to work. This results in lost revenue and added costs of paying employees who do not report to work.

There are also other costs associated with all this snow.

Maryland has (as of last week before the big storm finished and before today's third big snow) already spent $50 million of the $60 million budgeted to keep the snow clear. In D.C., officials said they were over their $6.2 million snow budget even before the storm started. And Pennsylvania officials said they had already spent half of their $245 million winter operations budget before the storm hit.

This has prompted some to call for an increase in taxes to help insure that we all can get to work in the snow. A kind of "snow insurance" tax.

This is stupid.

If we had this kind of winter all the time, then the budgets to clear the snow would be higher and therefore the taxes would be too.

The budgets are set based on historical trends and norms. They balance risk vs reward all the time. The risk of this happening, in the DC area, every year is negligible.

There are a ton of other factors that influence lost work, productivity and business revenue.

Yes, there are plenty of jobs that require people to be someplace else in order to perform their work. But in today's society, especially with more and more people and businesses relying on the Internet there is opportunity to look at other resources to enable folks to work.

If anything, this winter event, should be a great example for the need to have better telecommute policies and programs.

Lets look at some of the risk vs reward and potential cost savings for telecommuting.

I pulled the following examples from Innovisions Canada, well, because I was still thinking snow and work and thought where is there usually lots of snow, people, and the need to work. I naturally thought of the great white north, Canada.

Recruitment & Retention Telework is becoming a make-or-break issue in employee career decisions. If you have recruitment or retention problems, consider EKOS Research findings: 33% of Canadians would choose telework over a salary raise: 43% would quit for another job that allows telework.

Morale Telework is a morale builder. Resisting it, especially when your competitors offer it to their staff, damages morale.

Even my company, a major IT corporation, could benefit and improve from the first two alone. Non essential personnel and sites are closed for work but you have to either make up the lost hours or take PTO.

Real estate & office costs Your organization could save 1 office for every 3 teleworkers (that's about $2,000 per teleworker per year, or $200,000 per 100 teleworkers).
With telework, AT&T saved $3,000 per office for approximately $550 million by eliminating or consolidating office space people no longer need.
About 25% of IBM's 320,000 workers worldwide telecommute from home offices, saving $700 million in real estate costs.

Productivity Dozens of reputable studies have proven that teleworking 1 to 3 days per week easily increases overall employee productivity by 10 to 20% -- a great way to trim overtime and related costs. Doing the math, five to 10 teleworkers equates to one "free" extra worker. This negates the myth that teleworkers will goof off because they are "out of sight."

American Express telecommuters handled 26% more calls and produced 43% more business than their office-based counterparts.
Compaq Computer Corporation documented productivity increases ranging from 15 to 45%.
Surveys and pilots conducted by IBM Canada (where about 20% of its workforce teleworks) indicate that employees can be as much as 50 per cent more productive when they work in telework environments.

Stress & work/life balance Work / home life conflict is the top Canadian job disatisfier. With telework's fewer interruptions and improved productivity help employees catch up on their work; and reduce their stress, burnout risk, going-to-work costs and commuting time. Remember that the total yearly commute of average Canadian workers equates to six to eight full workweeks.

So, perhaps the real budget buster is not necessarily the snow storms and closure of the government and business, but rather the lack of adequate alternative resources for enabling people and businesses to work.

Another good resource site for telecommuting is Telecommuting360.


Sam February 10, 2010 at 6:08 PM  

...or maybe the DC area can sell their snow to Vancouver for $200 million so they have enough for the upcoming Winter Olympics. British Columbia is actually stock piling snow. I would say stranger things have happened, but I'm not so sure if that's true?

Doug February 10, 2010 at 6:44 PM  

Ha! That is exactly what I have scheduled for my next post.

Great minds think alike.

BTW. DC set the record at 55 inches so far for the winter.

We have had at least 15 more than them!

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