The Federal government has been a pioneer in telework for many years, but there are still many critics who resist implementing innovative and sustainable programs beyond government mandates. How can telework help federal leaders attract talent, boost performance, and identify cost savings that improve efficiencies across government. Learn the hidden benefits of Telework and how it can help achieve mission goals.

Guests:

Naomi Leventhal, Director, Federal Human Capital, Deloitte Consulting, LLP
Jim Reidy, Director, National Practice Lead for the Capital and Real Estate Transformation, Deloitte Consulting LLP

Show Highlights:

• Requirements of the 2010 Telework Enhancement Act and where we are today • The unintentional benefits of Telework—real estate cost savings and the redistribution of resources
• The culture change of Telework—getting managers on board to implement change
• The convergence of human capital, technology, and real estate measurements in Telework
• The future of Telework—a new workplace of tomorrow

The following is a full transcript of FedCentral’s interview with Naomi Leventhal, Director, Deloitte Consulting LLP and Jim Reidy, Director, Deloitte Consulting LLP conducted by Jane Norris on May 3, 2012.

Jane Norris
Welcome to FedCentral, brought to you by Deloitte; a program where executives and federal government leaders talk about the issues and initiatives that are making a real impact on the business of government today to help government help America.

So today we’re talking about telework. The Federal government has been a pioneer in telework for many years, but there are still many critics who resist implementing innovative and sustainable programs beyond government mandates. Many agencies could be missing the mark on the value of telework as a way to attract talent, boost performance, and identify cost savings that improve efficiencies across government. So how can telework help federal leaders in achieving their mission goals with fewer resources and limited budgets?

Joining us to talk about it today, Naomi Leventhal. Naomi is a Director in Deloitte Consulting’s Federal Human Capital practice. She’s currently the leader of Deloitte’s Workforce Flexibility Initiative that helps agencies design and implement new work models that focus on employee performance rather than presence in the workplace; and also Jim Reidy. Jim is a Director in Deloitte Consulting who leads the Real Estate and Location Strategy practice. His portfolio includes portfolio optimization, real estate project management, and technology enablement in both the private and public sectors. Welcome to you both. Thanks for joining us on FedCentral.

Naomi Leventhal
Thank you.

Jim Reidy
Thank you.

Jane Norris
Alright, so let me start with the Telework Enhancement Act. It was initiated in 2010 and we believe that it’s having some impact, so Naomi, why don’t you tell us how it’s going?

Naomi Leventhal
Great question. I think it is time to take a look and see where we are with the Telework Act, but let’s first think about what was required. So let me just give you one minute on what the agencies were being asked to do by the federal government, and that was to develop a policy that defines what telework is and how it will be used in a given agency. Agencies were asked to do an assessment of their employees to let them know whether they were eligible for telework. A telework managing officer was supposed to be identified, agreements written, and people were supposed to be trained in how to use the telework policy and measurements of how successful the policy was. All of those were part of the Telework Enhancement Act of 2010, and so I guess then the question is where are we today?

Well, we’re making progress. I think that it’s safe to say that a lot of Federal agencies have embraced the concept, and they have embraced also the objectives, the real goal of the Telework Act, which is to make possible for their employees a more flexible work environment, better work-life balance, and to achieve some of the many goals of telework that were intended when the act was passed. But better than that, agencies are really having success in rethinking how they do work, and so departing from the concept of telework, they’re going beyond and they’re looking at how, where, and when work is done, and Jim has been working with me to help agencies look not just at where work is done but how it is done successfully in the workplace as well as at home.

Jane Norris
And that’s part of this is just reallocating the whole idea of where you work and how you work, so that has to do with real estate, your specialty.

Jim Reidy
Yes, it’s been one of the unintended consequences of this Telework Act. We are allowing people to work from wherever they are; home, on the road, in the field. But what we’re doing is we’re leaving a lot of vacancy at the home office. You walk into any office these days that has not implemented an alternative workplace strategy or workplace of the future concept, and you’re seeing, you know, up to 40% or 50% or 60% of the work spaces empty because we’re working differently now, and that has a tremendous consequence from a financial, you know, perspective and what we’re paying for space that we’re not using, and given the pending budget cuts in the federal government next year, you’re going to come down to a choice. Are you going to pay for space you’re not using or are you going to take that money and put it back into the services and the resources you need to deliver your mission?

Naomi Leventhal
Agencies really have recognized that there’s a lot of opportunity to do good things by implementing telework, and one way to do good things is to save money, as Jim has suggested, but there’s also value in looking at what the workplace looks like once people get there. So we want people to have flexibility, mobility. We want them to be able to work at home as well as in the office or from the local coffee shop but once people get to the workplace, some of the agencies that are doing the most innovative things around the telework concept are redesigning the space that people use once they get to the workplace, and I know Jim has done some work in looking at alternative workplace design.

Jim Reidy
That’s an excellent point. We work differently, even when we’re in the office. We are working collaboratively now. We’re in meetings, we’re in team rooms. At Deloitte, we have teams that get assigned to an engagement and they will go and they’ll reserve an engagement team room for the duration of that project, and then four people who used to take up four desks now take up one office, and the way they work is incredible. We have whiteboards, we have flat screens, we can plug in our laptops, and it’s magical the way that they collaboratively work and share space and free up other space so we’re able to fit more people into a traditional office space than we used to, and we don’t even realize it. It’s something that gets adopted into the way that we go to work, and it’s – we transcend the old culture of I got to have my space. My office is my badge of rank. I’m entitled to this. As I get promoted, I go to that corner office. We’re not seeing that anymore, and we’re seeing new layout of office spaces with a lot of collaborative workspace and fewer walled offices in the interior with more open space along the outside, lower partition heights, and it’s changing the way that we use and see the office.

Jane Norris
But this is the federal government we’re talking about; very different workspace than probably any other that exists today. So how will they adopt, and does this impact their mission in order to adopt or not adopt, and also the budget pressures that you talked about?

Naomi Leventhal
Well, you know, there are a lot of cultural issues, and Jim just brought that up. There’s a lot of cultural issues that are associated with making this change, and there’s a certain amount of resistance, as well. People who have grown up with the concept of the corner office as being the goal that they aspire to may not be happy initially with this change, and people that use hoteling, which is another concept that has been brought into the federal workspace may also not be so happy with the change initially because they won’t have the same desk to report to every day, but there’s a generational change that’s happening here. People are looking for different kinds of work environments. They have different expectations. Certainly a generation that’s raised on social networking and being ever-connected and building their sense of community through social networks is not looking for the same kind of coffee pot conversation and cubicle space that other generations were working for.

Jim Reidy
I’ve seen a tremendous influence from the Millennials on the Boomers. It is changing the way that everybody’s seeing the way that they go to the office and work with one another. So initially yes, if you go from the traditional officing environment to a workplace of the future environment, the acceptance is very, very difficult, but I’m seeing a very, very quick turnaround once you start working in that environment into adopting that and then going on business as usual.

Naomi Leventhal
People are finding new ways to collaborate, they’re finding new ways to build community, and they’re finding ways to re-invigorate the culture. They’re being forced to ask themselves a lot of questions about why am I here and what am I doing and what’s the best way for me to accomplish the mission of the organization?

Jane Norris
So but the budget issue that you talked about early on in the show – that’s one that’s really going to overshadow everything the federal government plans in the future. So what have you found, Jim, in terms of cost savings that can be realized through just consolidation of real estate?

Jim Reidy
Well, we’ve done a lot of this on the commercial side of the business in the last couple years and what we’ve been finding is anywhere from a 30-60% cost reduction opportunity that can be had. So everybody says that’s a pretty broad spread. Well, the answer lies in the fact that one size does not fit all. You cannot just apply a standard set of space planning factors because every operation operates differently. Even within the same organization, you may have different divisions that have different metrics for space. So we need to take a look at how they all go to work, but the cost savings are tremendous. There’s one financial services industry that is crediting the work that we did with them for a $400 million a year cost avoidance.

Jane Norris
Wow.

Jim Reidy
We did it within Deloitte ourselves and we’ve seen something along those lines, as well. So in the assessments we’ve done for a couple of agencies within the federal government, we’re seeing a 48% reduction in real estate costs and that’s significant.

Jane Norris
So when you think about that cost savings, I mean, does that impact the decision or is telework just an idea whose time has come in the federal government, Naomi?

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