Work at home: Take pay cut. Come out ahead.

To be able to work at home a few days a week, some employees agree to a pay cut. Work at home for half the time and you could save as much as $6,800 a year.

Illustration by Phil Marden
Would you take a pay cut to work at home? A survey by New York-based Dice Holdings released earlier this year found that 35 percent of technology professionals said they'd accept up to 10 percent less pay to telecommute full time.

Several years ago, Lisa Hammond quit her job as an assistant manager at the Wal-Mart in Wichita, Kan., took a 60 percent pay cut to work for a call center, and came out ahead.

How? She worked from home.

This way, she saved on commuting and day-care costs, which had swallowed about half of her approximately $2,000-a-month take-home pay from Wal-Mart. Today, and two work-at-home jobs later, she earns more as a work-at-home field representative for the United States Census Bureau than she did at Wal-Mart – while still avoiding commuting and day-care costs.

"I'm spoiled now. I wouldn't want to go back to working in an office," says Ms. Hammond, a married mother of three.

Amid traffic jams, high gas prices, family needs, and a yen for more flexibility, what 21st-century worker hasn't thought about skipping the office scene and telecommuting instead? But taking a pay cut to do it? To some, the benefits outweigh the lost income. A survey by New York-based Dice Holdings released earlier this year found that 35 percent of technology professionals would take up to 10 percent less pay to telecommute full time.

"This is something that people really want – so much so that [some of them] would be willing to give up salary for it," says Jennifer Bewley, a spokeswoman for Dice Holdings, a career website for technology professionals.

For the past two years, Monica Cheick-Luoma has been working from home as a publicist for PublicCity PR, a public relations firm in the Detroit area. Her two other colleagues also work remotely.

"While my salary is lower than at my previous position, and I don't have health benefits or a 401(k), working from home has been something I've always wanted to do," she says.

"I've been offered other positions since taking the current job. But the perk of working from home and not dealing with the cost of commuting, gas prices, lunches, and an office wardrobe seems to keep me put." Moreover, she's now better able to care for her aging parents, she says.

How much can workers save? Employees working at home for half a workweek (versus every workday) save an average $362 per person per year on gasoline costs, according to an analysis by Telework Research Network. Among other possible savings: an average $7.37 a day on meals and $2.41 a day on professional clothes, calculates TRN, a San Diego-based consulting and research firm specializing in the benefits of telework.

Overall, workers can save as much as $6,800 a year by being home-based for half of every workweek – an amount of time "that offers a good balance between teleworking's advantages and disadvantages," says TRN president Kate Lister.

To be sure, not everyone is dying to work at home or in some remote locale away from an office – even if their company allows it. Among the common laments are feelings of loneliness and isolation. Moreover, the rough economy seems to have spooked some former telecommuters (also known as teleworkers).

Last year, 16 million employees teleworked at least one day each month – down from roughly 17 million two years earlier, according to WorldatWork, a global human-resources association based in Scottsdale, Ariz. But that drop follows a 39 percent rise from 2006 to 2008.

In a June report, World­at­Work linked the recent dip to several factors, among them an overall rise in joblessness and heightened fears about job security.

"Some employees felt the need to be in the office so they wouldn't lose their job," says Rose Stanley, the firm's work-life practice leader.

However, Ms. Stanley expects the growth of teleworking to resume soon. As the economy improves, she says, "people are starting to get back to their former modes of working."

As for taking a pay cut to telecommute, that's not normally part of the deal, notes Ms. Bewley of Dice Holdings.

For example, none of the roughly one-third of SCAN Health Plan's 950 employees who telecommute – on average two to three days a week – had to take a lower salary, says Diane Cole, workplace solutions director at the Medicare Advantage plan based in Long Beach, Calif.

Instead, the company has benefited in other ways since formally rolling out its telecommuting program in early 2008. Savings for SCAN Health include $1 million a year from being able to reconfigure office space and close three satellite offices, due to telecommuting, Ms. Cole says.

Moreover, productivity by the telecommuters climbed an average 18 percent. And, in the program's first year, the telecommuters collectively saved 450,000 travel miles, and along with that, gas costs and greenhouse-gas emissions. "Some people even reported losing weight because they were no longer stopping at fast-food restaurants to pick up dinner on their way home from work," says Cole.

To telecommuter Hammond, "working from home is fantastic: No commuting costs, flexible hours. I would absolutely recommend this to others."

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