Rising energy costs may usher in workplace changes

P&G cuts travel spending 15% with virtual meetings, and other $4-a-gallon stories from IT managers

LAS VEGAS — The tipping point on fuel prices arrived about a month ago for Bill Lucas, an engineer in the IT department at Milwaukee-based utility We Energies. He stopped using his car for his 35-minute commute and now takes a bus, which costs only $2.50 each way, thanks in part to a ticket subsidy from his employer. Lucas says he has a lot of company on his bus rides.

At the corporate level, the escalating cost of petroleum products has IT departments at companies such as The Procter & Gamble Co. expanding their videoconferencing capabilities. The technology has helped P&G reduce corporate travel spending over the past year by 15%, said Marta Foster, vice president of business solutions, global business services, at the Cincinnati-based company.

Escalating fuel prices are forcing all kinds of changes by individuals and companies. In interviews at Forrester Research Inc.'s IT Forum 2008 conference here, about a dozen IT managers and senior staff said their companies are either exploring or implementing telecommuting, as well as turning to, more often than not, virtual-meeting technologies.

There is also an awareness of risks for companies that don't take such steps, especially in employee hiring and retention.

Mark Wilson, a managing consultant at Delta Initiative LLC in Chicago, said some clients consider the length of a job candidate's commute in a hiring decision.

"Our clients believe attrition is very connected to the amount of miles [employees] have to drive to work," said Wilson, who added that companies may be more inclined to hire someone with a shorter commute in the belief that a long, expensive commute "is going to wear on them sooner or later." His company provides IT enterprise consulting.

Jim Bagozzi, associate vice president of business solutions at Toronto-based Canadian Tire Corp., said his company is also moving toward expanding telework. The company has already found that in hiring some people with specialized skills, it has had to make it possible for them to work from remote offices rather than commute to headquarters, he said.

Telework is "a fairly new concept for us," said Bagozzi. He noted that Canadians are already on their way to paying what amounts to $5 a gallon for gas. In Toronto, for instance, gas prices are around $1.25 (Canadian) per liter (3.78 liters equals one gallon).

David Trumble, an enterprise architect at a company he asked not be named, said gas prices will likely limit the geographic radius of job candidates.

Trumble, who works in the Boston area, said it wouldn't be uncommon to hire people living in Southern New Hampshire, but he doesn't believe prospective job candidates will want to deal with a commute of 40 to 50 miles. "Time-wise it's reasonable, but cost-wise it really doesn't add up," he said.

Fred Balliet, who works on global IT strategy at London-based AstraZeneca PLC, a global pharmaceutical firm, said his company already has a "fantastic" work/life program that includes flexible schedules and telework arrangements.

Balliet, who is based in the U.S., said the response to rising energy costs has been to increase use of virtual communications and meeting tools. He has cut back on his travel to Europe, as have others at the company.

Balliet said economizing on gas also extends to his personal life. He said his family members now "bundle" their trips; they don't use the car to go shopping unless multiple errands can be accomplished by one trip. "There has to be more than one reason to go seven miles somewhere," he said.

At P&G, Foster said the company is using Cisco TelePresence, which involves having three monitors set up in a conference room. She noted that her company may be the largest user of the technology, outside of Cisco itself.

Foster said P&G is working with Cisco to improve the performance and capability of videoconferencing, but she added that she is pleased with how Cisco TelePresence works. "Within the first three or four minutes of the meeting, you forget that the technology is facilitating the meeting. It really feels like you are sitting across the table," Foster said.

Tom Jackson, an IT manager at a consumer products company he didn't want to identify, said he could work from home every day but does so only two days a week. Jackson said he likes going into the office, even though the trip in his self-described gas guzzler costs him $60 a week. "It's worth it to me to get out of the house," he said.

Copyright © 2008 IDG Communications, Inc.

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