Employees who work from home

Employees who work from homeExtended flexible working rights, technology and social change make working from home — an increasingly cost-effective and attractive option both for businesses and the individuals who work for them.
This briefing outlines:

  1. Which jobs and individuals best suit homeworking.
  2. The key management issues.
  3. The benefits and risks.
  4. The technology involved.

1 Does it suit?

1.1 Jobs which particularly suit full-time or part-time homeworking include:

  • Sales, marketing and customer service.
  • Support and maintenance.
  • Computer programming.
  • Consultancy and professional services.
  • Training and education.
  • Writing, editing, research and translation.
  • Some administrative and secretarial work.
  • Jobs where home acts as a base for mobile workers such as sales representatives.

The key question is to what extent the employee needs to attend the office.

1.2 Individuals need the right skills and personality traits to be effective homeworkers.
Training can help employees develop suitable skills. Typically, good homeworkers are strong on:

  • Time management and self-discipline.
  • Motivation, self-sufficiency, initiative and the ability to work alone.
  • Communication. For example, they have a good telephone manner and the ability to get on with new people.
  • Lifestyle management. They have the ability to manage the split between home life and working life.
  • Technology. They have the ability to manage IT and telecommunications equipment.

2 The home office

2.1 Minimum requirements for a home office include:

  • A work space and reasonable working environment. Homeworkers may need to gain the co-operation of others who live in the same place.
  • Secure premises and a lockable cupboard or desk. Homeworkers should avoid leaving valuable equipment or sensitive information where there is a risk of theft or confidentiality breaches.
  • Compliance with health and safety regulations (see 2.2), including suitable furniture.
  • A business telephone line and broadband access.
  • A computer with internet and email access, office software and access to a printer (see 7). Access to a secure virtual private network (VPN) can also allow your staff to connect to your company network from home.
  • Adequate insurance.

    Home contents insurance normally excludes business equipment. However, most employers’ insurance policies cover "any place of business", so employers and homeworkers should check their policies. Additional insurance may be required if homeworkers have visitors or business meetings at home.

2.2 Health and safety requirements apply equally to homeworkers and those who work in an office.

An initial risk assessment must be carried out, although this can be done by the employee. Areas to consider are:

  • The seating and layout of the employee’s computer workstation.
  • Electrical equipment. Has it been tested and certified?
  • Extension leads and cables for telephones, computers and printers. There should be no trailing leads.
  • Adequate lighting levels, ventilation and room temperature.

Employers need to give homeworkers simple, specific health and safety advice and record what has been done.

2.3 Planning permission is unlikely to be required if all the following are true:

  • Only one room is used for homeworking.
  • Only those who live in the house work there.
  • The work does not lead to a substantial volume of visitors, nuisance to neighbours or extra car parking.

2.4 Tax and business rates are not usually a problem.

Homeworkers can ensure the room used has a secondary purpose (eg as a guest bedroom) to avoid paying:

  • business rates.
  • capital gains tax on the sale of the property.

3 Benefits and risks

3.1 The main benefit of working from home is increased productivity, through:

  • More efficient use of time.

    Homeworkers often face fewer interruptions and spend less time commuting.

  • Improved employee retention.

    Homeworking often suits parents who need to fit in with school-age children.

  • Reduced levels of sick leave and stress.
  • A better chance of recruiting the most able candidates. Potential recruits may prefer the option of full-time, part-time, casual homeworking, or flexitime.
  • Control over the office environment, eg noise, heat, ventilation and lighting.

3.2 The main problems with working from home are similar to those of running a decentralised business.

Particular risks and problems can include:

  • Losing touch with employees and difficulty in arranging ad hoc meetings.
  • Increased initial training requirements and expenditure on setting up home offices.
  • Reduced loyalty due to increased isolation.
  • Deterioration in employees’ skills and work quality.
  • Difficulty in controlling the security of information.
  • Poorly-managed homeworking can lead to confused goals, standards, expectations and systems.

Effective management of homeworkers can overcome most of these problems.

In many businesses, informal homeworking goes on anyway, whether or not there is an official policy of allowing it. It therefore makes sense to tackle the issues and make the most of the opportunities.

4 Introducing homeworking

4.1 Employers should put the groundwork in place before starting to implement homeworking.

  • Prepare a homeworking contract (see 5).
  • Introduce a training plan.
  • Prepare written procedures for the tasks involved.

Attempting to change working procedures at the same time as introducing homeworking can lead to problems.

4.2 Employers should start with a small pilot scheme.

  • Limit the size of the pilot people to a manageable amount.
  • Give employees the option of participating.

    Many employers find that employees approach them with homeworking and flexible working requests.

  • Begin with part-time or casual homeworking.
  • Keep costs down. The only significant cost should be for training and home-office equipment.

If the pilot is successful, the employer can then roll the scheme out to other employees.

4.3 The introduction of homeworking needs to be planned and managed like any project.

  • It requires formal review, evaluation and measurement.
  • The key to success is to manage flexible workers in terms of their output rather than their attendance.

    Attempting to maintain the same direct control over individual activities is usually doomed to failure.

5 Contracts

Not every situation demands a new contract. As long as output is quantifiable, an employer can usually offer a standard contract. Employers may, however, need to renegotiate if conditions change.

5.1 It is easier to negotiate homeworking contracts if the terms and conditions offered are as good as those for employees who work on site.

Employers should agree a letter of modification to the standard employment contract. A simple letter might state:

  • Where the employee will be based.
  • That both employer and employee have the right to terminate the homeworking arrangement at any time.
  • That the company will supply and insure the necessary equipment. The equipment remains the company’s property and is not to be used for private purposes.
  • That the company will supply and pay for a telephone and internet connection for business use.
  • That the employee must comply with relevant health and safety and security guidelines. The company will pay any costs involved.
  • That there is no change to other employment terms and conditions such as pay, hours of work, holiday entitlement and pension contributions.

Employers should ask employees to sign the letter to indicate acceptance.

An employee who feels unduly pressured into accepting a new arrangement who quits may have a case for constructive dismissal.

5.2 Homeworking is not self-employment.

  • HM Revenue & Customs is unlikely to accept an individual with only one customer (the employer’s company) is self-employed.

    This is especially unlikely if the individual was previously employed by the same company.

  • Introducing self-employment for whole departments which move to homeworking can cause legal problems.

    This is a complex area that involves the Transfer of Undertakings (Protection of Employment) Regulations or TUPE.

6 Staying in touch

6.1 Telephone and email are the best ways to maintain contact.

  • Regular telephone calls can replace most face-to-face meetings.
  • Frequent short calls can be as effective as long conversations.
  • Email does not interrupt work as much as the telephone. Homeworkers can choose when to read messages and when to respond to them.

A face-to-face meeting is still best if there is bad news or complicated information to impart.

6.2 Various telecoms options provide efficient ways of making contact with homeworkers.

  • Email is essential.
  • Voicemail and instant messaging enables employees to receive and send messages.
  • A unified messaging system can automatically route incoming calls to the employee and displays data from your customer relationship management system.

    Individuals can purchase a personalised number to achieve the same effect.

  • Mobile phones are now a business essential allowing employees to make and send calls, emails and text messages.
  • Intranets and video-conferencing offer additional means of keeping in touch.

6.3 Employees may need access to company data and documents.

  • It is easy to share data and files with homeworkers via a VPN (see 7.2).

    File sharing works best if everybody uses the same version of the software.

  • Employers should consider customer relationship management software if they have a mobile sales team or need to update customer data regularly.

7 Using technology

It is safer for homeworkers’ to save their work directly onto the employer’s systems, rather than their own equipment. This reduces the risk of a data security breach and limits the employer’s exposure to the provisions of the Data Protection Act.

7.1 Homeworkers can access any information that you keep on your VPN or online.

  • It can be accessed anywhere by any computer with internet access.

7.2 You can enable homeworkers to connect to your existing computer network by creating a secure VPN.

  • This gives them access to relevant files and systems on the company network, and to resources on the company intranet.
  • The major cost, for an existing network, is the connection fee.

    A fast broadband connection makes it easy to exchange information.

7.3 Understand the pitfalls.

  • There is a danger of people gaining unauthorised access to your systems. Where confidentiality is essential, your computers should be protected with passwords, firewalls and anti-virus software. All data and files should be saved to your intranet where it can be backed up and protected.
  • Faster technology costs more money.
  • Homeworkers may need training.
  • Employees may not use the technology productively.
  • Employees may fail to back-up information stored on home PCs and laptops.

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