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Home-based work: the in thing

'Working From Home: Everything You Need to Know About Living and Working Under the Same Roof'
By Paul and Sarah Edwards

July 22, 1999
Web posted at: 2:39 p.m. EDT (1839 GMT)

(CNN) -- It's a dream of most everyone who has been stuck in traffic on a commuter-clogged highway -- "Why can't I work at home?" In "Working From Home: Everything You Need to Know About Living and Working Under the Same Roof," Paul and Sarah Edwards say there is no reason why the average commute can't be a walk to the kitchen for coffee.


rule

CHAPTER ONE

    Putting an End to Nine-to-Five

    Goals

    1. Find out why there are more opportunities now to work from home.

    2. Discover what those opportunities are.

    3. Explore the choices others are making.

Imagine your workday beginning with a brisk walk from the breakfast table to the den. The extra time you save every day by not commuting to work is available to do whatever you want: sleep late; work out; spend extra time with your children; garden; or get a head start on the job that needs to be done. Think of it. Even if you have only a twenty-minute commute each way, ending your daily commute is like getting an additional four-week vacation every year.

Interested? You're not alone. According to repeated surveys, one in three American workers would prefer to earn their livelihoods at home. Today we have that choice, and more and more people are choosing the work-from-home lifestyle. Of course, for most of us, going to work from nine to five, or a version thereof, has been the story of our lives. But for many, it's no longer a very satisfying way to live. For others, like the handicapped, the elderly, or parents with small children, working away from home isn't always feasible. Until recently, they had few other choices.

Since the early 1980s, however, people have begun finding new options for living and working. Today we can say good-bye to the daily commute, the dead-end job, the office politics, and the feeling that everyone else is in charge of our lives. Today we can work from home and shorten our commutes to a minute or less.

The 1980 Census found 2.2 million people working at home. By 1997, the Bureau of Labor Statistics' Current Population Survey found 7.7 million working at home, 4.1 million of whom were working in a home-based business. Private research firms find even larger numbers of people working from home. No matter which numbers one considers more believable, working from home is "in" and growing.

The new dreams

Although our society has made strides in terms of material well-being in the past fifty years, the fast pace of the modern industrial world has not been kind to our personal lives. Work life and personal life have generally become two isolated worlds, separated in time and space by the daily commute.

Often people have to struggle to squeeze in a little "quality time" by themselves or with their loved ones—catching a few free moments between the late shuttle and the eleven-o'clock news, between the extra load of laundry and the early-morning meeting. Divorce rates remain high. Stress-related illnesses like high blood pressure, chronic headaches, back pain, alcoholism, drug abuse, heart disease, and even cancer are taking a heavy toll. Even our ability to think is affected. At a recent convention held by the American Psychological Association, a study presented by researchers at Florida Atlantic University found that people whose jobs required a thirty-mile average commute performed poorly on complex tasks and were easily frustrated. In short, many workers need a change.

From this perspective, working from home holds the promise of a new American dream—opening the door to a better way of life while maintaining or even expanding our standard of living. Of course there are problems and adjustments to contend with, but in most cases if you're looking for an alternative to the nine-to-five rat race, the advantages of creating a new lifestyle outweigh the challenges.

We call today's home-based workers "open-collar workers" because the comfort of being able to dress casually symbolizes the freedom, the convenience, and the flexibility of earning your living in your own home. Although many jobs away from home don't require that male employees show up wearing neckties or women wear high heels, open-collar workers usually wear what we've been tempted to designate as the official work-from-home uniform—sweat shirts, athletic shoes, and jeans.

"A bad commute for me is tripping over the cat."

Lynn Hoopingarner, Systems Consultant

Options for earning a living at home

Working from home is not a modern invention. During the Middle Ages and the Renaissance, European merchants set up shops and artisans their work areas on the main floors of their homes. Family living was done in a single shared room upstairs.

The mixture of work and home migrated to America. Paul Revere, like many during his time, did his silversmithing in the front of his house in Boston. You can still see his shop/house on the Freedom Trail today. Some of you may have had grandparents who operated small stores or shops and lived either upstairs or in the back of the concern. And, of course, farm families have always worked from home.

In the late 1800s, the Industrial Revolution's demand for workers drew people from their homes and farms to staff factories and offices. The advent of the automobile helped make working at home unfashionable except for writers, artists, and some salespeople. However, history has a way of repeating itself. In 1980, when we began writing the first edition of Working from Home, futurist Alvin Toffler, in his book The Third Wave, was predicting an upsurge in what he called "electronic cottagers," people who would be working from home in a computerized information age. And indeed, today's information-centered society has opened many opportunities for people to work at home, with or without computers.

Things have come so far, in fact, that we see a trend toward individualization in American business, and much of this is originating from the home. Simply put, business "firms" (companies with one or more employees) are actually shrinking, while one-person businesses are growing. According to the Small Business Administration, business start-ups are at an all-time high, but business-firm terminations are even higher. According to the New York Times, 43 million jobs have been permanently erased from the U.S. economy since 1979. IRS data also states that sole proprietorship tax returns continue to grow in number. In Canada, between 1989 and 1996, where the self-employed accounted for three-quarters of total job growth, nine-tenths of the growth of self-employment came from people who work alone. The individual-run business begins to emerge as the clear-cut model for small-business success at the close of the twentieth century.

After-hours work

The largest number of people with home offices are corporate employees who bring their work home after normal working hours. They are generally referred to as after-hours workers, and their numbers continue to grow. A recent Fortune magazine poll of five hundred chief executive officers revealed that the majority expect their subordinates to put in more hours than they did ten years ago. Fifty- and sixty-hour weeks are common. The result is that legions of overstressed survivors of downsized corporations are thinking about another way of living and working.

Once someone starts taking work home and has set up a working office, it becomes tempting to spend more and more time there. So we find that after-hours work often leads to taking office work home during the daylight hours as well, and, even more frequently, to a growing number of sideline home businesses.

Ken Camp, a systems consultant for AT&T, is an example of this process. He began taking after-hours work home when AT&T offered substantial discounts on personal computers to its employees. He bought a computer and found he could leave the office around 5:00 P.M., have dinner with his family, and put in a couple of hours of work before his favorite prime-time television shows. He found he had fewer interruptions at home than at the office, so eventually he talked his supervisor into letting him work from home two days a week.

Before long, he began moonlighting. For the past two years he has made a modest profit from a part-time consulting business helping small businesses with office automation. He envisions that one day he'll leave his job and run his consulting business full-time.

Working a salaried job at home

As of mid-year 1998, 15.7 million employees worked at home during normal business hours, according to research conducted by Cyber Dialogue, a New York-based research and consulting firm. The research identified three categories of "telecommuters" or "teleworkers": full-time employees, contract workers, and part-time employees who telecommute informally. Full-time employees who telecommute now total 7.4 million workers. These employees work from home an average of 18.0 hours/week at home, or about 2.5 days/week. Telecommuting is the fastest growing segment of the working-from-home population with advantages for both employees and employers.

A survey conducted by The Affiliates, a leading staffing service, said 14 percent of all attorneys with law firms now work from home on a regular basis. A full 80 percent of attorneys polled believe telecommuting will increase in the next three years.

Jane Minogue, a technical writer for CompuCorp, is such a person. She began telecommuting when she was expecting her first child. "I didn't want the stress of driving to and from work every day while I was pregnant, and I wanted to be with my baby after he was born. My boss didn't want to lose me, so when I suggested working at home, he said okay." Like many telecommuters, Jane works at home most of each week and at the office for the remainder of the time.

You don't have to use a computer or be in a high-tech field, however, to work at a job at home. "Low-tech" organizations are using the new work options as well. Pet Organics, which manufactures and distributes natural health products for pets, is entirely home based. Founder Bob Baxter runs the company from his home, and his six sales representatives work from their homes too. "It's the most practical solution economically," Bob says. "Some of my people work full-time, others work part-time. Why pay for an office when you can just as easily get the job done from home?"

The future is bright for more such opportunities. The number of telecommuters or teleworkers is growing at the rate of 15 percent a year. In chapter 4, "Working for Someone Else," we describe the best routes for taking your job home or, alternatively, finding a new job that lets you work from home.

Full- and part-time home businesses

Home-based business owners refer to themselves in a variety of ways: as small businesses, home businesses, self-employed, independent contractors, entrepreneurs, freelancers, or consultants. Bill Spees of South Bend, Indiana, is an example of this growing trend of striking out on one's own.

A licensed professional engineer, Spees with four colleagues created Legendary Systems, Inc., a successful engineering consulting firm. "We started this business after we were forced into early retirement. Except when we're traveling to consult on-site with clients, we all work at home," he reports.

Some folks have even come full circle. Ethan Winning was one of the working-from-home pioneers. Back in 1977 he already had five clients he was serving on his own apart from his corporate job as personnel director. When the sixth client appeared that October, he quit his job and set up an office at home. At the time, he had few fellow home-based contemporaries. As his business grew over the following years, so did his space requirements. "By 1982 it became obvious that we needed more space," Ethan explains. "Our kids were still young and had this `thing' about the business taking over their bedroom." At a time when the first wave of home-based entrepreneurs was taking the plunge, Ethan moved his company out of his house into rented office space.

Ethan's business continued to flourish. In the mid-nineties, he came to yet another series of conclusions. The copy machine that once resembled a medium-sized refrigerator was now the size a of new, compact laser printer. Equipment had gotten smaller and newer. More powerful software had replaced his last secretary. "My wife, and true financial officer, asked why we were keeping the offices. We weighed the pros and cons. It came down to the fact that I was doing all my work in a ten-by-ten-foot room, made possible by 2.2 gigabytes of memory, my trusty laser printer, the phones, and a fax machine." Thirteen years after moving out of the house, he moved back in. "It's definitely helped preserve my thirty-one-year marriage, and the money we saved could be nicely put toward retirement or, even worse, fixing up the house!"

Why it's possible now

If you're already working from home or seriously thinking about it, you're definitely in the right place at the right time. That much is clear. But, you may be wondering, What happened? Why, all of a sudden, are there so many opportunities to work at home? Several factors account for the new options and suggest that working from home is not only here to stay but also the wave of the future.

Restructuring of the Economy

The United States has changed from a society based on an industrial economy to one based on an information and service economy. The Internet is moving further into the Information Age. With equipment running at a fraction of the cost of a car, work is done as easily in a spare bedroom as in an office.

This transformation has brought about significant changes in the way we work. Increasingly, well-educated managers and professionals seeking to climb the corporate pyramid have found midlevel positions disappearing as the corporate hierarchy begins looking less like a pyramid and more like a pancake.

Many find not only no upward mobility but also no opportunity to stay put. Even in a good economy, white-collar workers are losing jobs to downsizing, mergers, and takeovers at about the same rate as blue-collar workers. Most people know formerly high-paid managers and technical and professional workers who have been let go by companies with whom they thought they had secure futures. Many of this number are unable to replace their old jobs with work at equivalent pay or stature. Some settle for significantly lower wages; others have no luck at all and report sending out hundreds of resumes. One frustrated job searcher reported he was told everything—that he was too old, too young, too technical, too general, too specialized, in the wrong industry, obsolete, too focused, from too-diverse a background, from too small a company, from too big a company, and on and on.

The wave of consolidations of large corporations crosses most industries—from aerospace to book publishing, from home appliances to hospitals, from toilet tissue makers to telephone service. Cost savings—meaning fewer employees—are virtually always cited as a reason for a merger or acquisition.

"Category-killer" stores in office supplies, toys, home improvement, furniture result in locally owned and smaller businesses sliding down Memory Lane, leaving behind long-time employees, owners, and the sons and daughters of owners who thought the family business would become their future needing to discover new options for making their way.

As we mentioned earlier; large U.S. companies have laid off over 43 million workers since 1979. In the early eighties Fortune 500 companies accounted for more than 20 percent of the work force; today just 10.9 percent work for the Fortune 500s. In the past, layoffs included a realistic hope of being rehired when times got better. Times are very good right now, yet secure high-quality jobs with ample benefits are not coming back. And although there have been new jobs created in the new economy, few feel assured of keeping theirs, and rightly so. This is why, despite the fact that the best economic indicators are higher than in recent memory, people are more worried about money than ever before. In fact, a recent poll conducted for USA Today indicated that 30 percent of Americans always worry about having enough money to pay their bill - up from 20 percent in 1995.

"The job security many workers experienced in the three decades after World War II is probably gone forever."

Robert Reich, former secretary of labor

Industrial and clerical workers have felt the job squeeze the hardest. Between 1980 and 1995, according to the New York Times, a full 43 percent of the manufacturing workforce was let go. That's over 24.8 million jobs. Given frequent plant closings, cutbacks in government spending, layoffs, and automation, the specter of unemployment looms over many heads even in good times. Workers who are repeatedly downsized, reorganized, purged, and merged are eager to find ways to take control of their careers.

As a result, starting a part- or full-time home business, or having a spouse start one, begins to look very attractive. And while economic restructuring is causing problems of dislocation and dissatisfaction, it's also creating the solutions. As industries consolidate into a few large corporations on the one hand and splinter into a multitude of smaller companies on the other, the mass market is narrowing into definable niche markets that can be easily served by small companies and self-employed individuals. This trend contributes to why one out of three new businesses today is started at home.

Home-Based Empowerment

Layoffs and downsizing have been part of the American economic landscape for almost twenty years now. When these trends first began, people had to scramble fast to regain their footing, and starting a home-based business turned out to be an excellent solution for many. Today, the economy is stronger than ever and employers are complaining of a scarcity in the labor pool, yet companies continue to run lean and mean. In these interesting, somewhat conflicted times, the decision to start a business or work from home isn't always a reaction to losing a job; just as often it is made from a position of empowerment. After looking at all the facts, more people are deciding to quit their corporate or industrial jobs and strike out in home-based businesses.

Tired of office politics and the constant threat of downsizing, John Harnagel decided to quit his job summarizing depositions for a midsized law firm in Los Angeles and head out on is own. He outfitted an office in his home and went prospecting. When three of his former company's best clients heard that John was out on his own, they transferred their business to him. They knew the quality of his work and were pleasantly surprised that they could get the same level of service at half the rate they had been paying to the larger firm. Needless to say, John is quite pleased with his decision. "I was a little scared to cut my ties to the salary I'd been drawing, but with my own business I now have the very real possibility of doubling my actual income yearly, which I've already done. This could never have happened if I stuck to the nine-to-five."

Jonathan Farrow was a full partner in a successful retail store that sold original art prints and other objects d'art. In order to increase sales further, he wanted to take a part of his business on line and join the thousands of entrepreneurs making sales in cyberspace. Jonathan taught himself HTML (the computer language used to create sites on the World Wide Web) and created a Web site that allowed customers to purchase his wares directly over the Internet. The Web site was so successful, it demanded his full-time attention. This allowed him to operate from home while his partner minded the store. After a year of brisk sales, Jonathan took stock of his own inventory and decided that he actually enjoyed creating Web sites and on-line sales strategies more than he liked selling artwork. It didn't take him long to reoutfit his home office to accommodate his new business interest. His new company, The Media Group, has started off on the right foot and he is already servicing accounts.

Changing Demographics

The bulk of today's population is entering their forties and fifties, and these baby boomers have reached the age when they are seeking autonomy over their lives and a higher quality of life. With American corporations cutting back and flattening out, advancement opportunities are shrinking for seasonal workers. So achievement-minded baby boomers are striking out into their own business ventures.

Like many women, market researcher Elizabeth Donovan bumped into the corporate "glass ceiling" in her early thirties. When she asked for a raise, she was told she was earning enough for a woman of her age. With the encouragement of her accountant, she left her job to start her own market research firm. Over the past twelve years she's realized a $600,000-a-year income working all by herself at her home-based business.

The generations following the boomers, the so-called "lost" generation now in their thirties and the "gen-Xers" now in their twenties, are making significant contributions to the home-business landscape. Historically, other generations with characteristics similar to this one have had a strong entrepreneurial talent as well, producing people like Andrew Carnegie, John D. Rockefeller, J. P. Morgan, Levi Strauss, and Dale Carnegie and innovations like cafeterias, chain letters, comic books, frozen foods, plastics factories, shopping centers, and supermarkets. Today's entrepreneurs produce developments in computers, communications, new media, and new personal service businesses like pet-sitting, wedding planning, and image consulting that can be operated at home.

Sophisticated Information Technology

The ever-decreasing cost of powerful computers, high-resolution printers, and high-speed communications has made it possible to conduct business as easily from home as anywhere. When we began working from home, the most advanced equipment suitable for a home office was an IBM Selectric typewriter and an answering machine that half of our callers hung up on. Since that time, personal computers—especially laptops—modems, fax machines, laser printers, briefcase-sized copy machines, and the Internet make working from home as productive, efficient, and competitive as it is in any office. Almost every technology leader—companies like Hewlett-Packard, Microsoft, IBM, Canon, and Sharp—are designing products specifically for home offices. It's hard to find an electronics store or mass merchandiser that doesn't have a home-office section.

People can live literally anywhere and transact their business in style. The owner of a skip-tracing agency does business from his home in the Virgin Islands, communicating daily by computer with his main office in Washington, D.C.

Steven Roberts, inventor, author, and computer specialist, has made his home on an "electronic bicycle." He bicycles across the country with two computers he uses to write and transmit his work to book and magazine publishers.

Tom McAnally runs his international recruiting company from his home in a tiny town in rural Montana. He operates a high-tech little house on the prairie.

Thanks to a computer, Rohn Engh also left the hassles of life in a large metropolitan area. Behind his barn in rural Osceola, Wisconsin, he now publishes Photoletter, an electronic newsletter that pairs photographers with photo editors of magazines and other publications. The personal computer creates hundreds of business opportunities like McAnally's and Engh's that can easily be started and operated at home. With small computers, home businesses like these have many of the capabilities once reserved only for organizations with many employees or large mainframe computers.

The computer and ever-expanding communications technology also offer job and business opportunities to those who cannot work outside the home because of physical or family limitations. Georgia Griffith, who is blind and deaf, uses her computer and a machine that prints computer Braille to work from her home in Lancaster, Ohio, as a music proofreader for the Library of Congress.

Doing word processing for American Express, through the company's Project Homebound in New York, Joseph Wynn is able to make more than three times the money he received from Social Security disability.

In tiny Reardan, Washington, Bruce Johnson produces computer graphics at home on his Apple computer. Confined to a wheelchair by a high-school football injury, he finds this a feasible and satisfying way for him to work.

The Contingent Workforce

Another result of corporate mergers and downsizing is an increasing demand for part-time or freelance consultants, researchers, and designers. This demand has created a new category of employees collectively referred to as the "contingent workforce."

Loosely defined, the contingent workforce includes part-timers, independent contractors, freelancers, leased employees, temporary workers, business services employees, and the self-employed. Contingent workers have grown from 20 percent of the workforce in the early eighties to 25 percent today. Charles Handy, author of The Age of Unreason, states that contingent workers comprise 50 percent of the British workforce. The U.S. is following behind with Manpower, Inc., now the nation's largest employer.

For some like Wendy Perkins, author of Temporarily Yours, "temping" has become a way of life, and a route to self-sufficiency. Wendy, who left her job as a stockbroker to seek greater self-expression, considers herself to be an independent contractor and has worked for more than 250 companies.

Beleaguered by the high cost of doing business, some corporations have actively helped the entrepreneurial exodus along. Rank Xerox, a London-based subsidiary of the Xerox Corporation, and Connecticut Mutual Life Insurance Company have developed programs to encourage middle managers in areas such as purchasing, personnel, and planning to quit their jobs and sign on as part-time outside contractors. A number of occupations such as medical transcription, instructional design, and graphic design work are primarily cottage industries.

New Pressures/New Values

With growing numbers of two-career couples, singles, and single-parent families, both men and women are feeling the pressure of having to juggle many conflicting demands on their personal and professional lives. Almost a third of Americans say they feel rushed, and two-thirds suffer from frequent stress. Many burn out on their jobs and on their lifestyles. And it's no wonder. Even weekends seem to be shrinking as job responsibilities, errands, and housekeeping all get squeezed into the two days that were once reserved for recreation and relaxation.

As a result of these pressures, people are looking for greater control over their time and more flexible work arrangements. Nearly eight out of ten American men and women would sacrifice rapid career advancement in order to spend more time with their families. A recent survey reported in USA Today showed that the love of one's family has become the value Americans cherish most. So they're opting for home and hearth—family, health, and personal satisfaction.

Today's workers are also looking for new rewards from their work. They want more meaningful, satisfying work and they want to work with people they respect. These priorities have come to matter more than money or opportunities to advance.

In search of a more rewarding lifestyle, increasing numbers of people are determined to become their own boss or to work more independently. Repeatedly as we travel across the country, we hear people saying things like: "I've been told `It's none of your business' so often that I've decided to start my own business"; or "I want to set my own hours and keep what I earn for myself. I'm tired of the rat race. I'm fed up with nine-to-five"; or "I want to succeed and excel at whatever I do. I want to work for myself even if it kills me. I am determined to work to live, not live to work!"

Gil Gordon's experience is not uncommon. After nine years, he left his position as a personnel manager to start his own telecommuting consulting firm; he had become disillusioned with corporate life. "The jobs I could be promoted to didn't look that attractive. They all involved managing rather than doing. Now I'm not working any less, but my attitude is different. I'm happy. The biggest satisfaction is knowing I'm doing something important."

New Locations

Middle-class Americans like the Enghs and McAnalys are choosing to leave the crowded urban centers and suburbs, particularly those on the coasts, and make new lives for themselves in small towns and rural areas. This trend has given rise to books and consultancies to help people relocate. We find in traveling to places like Salt Lake City and Boise a new vitality brought about by newcomers who take their skills and their expectations for culture and conveniences with them. We've been told in fast-growing areas like these and others like Springfield, Missouri; Sioux Falls, South Dakota; and Fort Collins, Colorado, that someone could start almost any one of the businesses in Best Home Businesses for the 90s and quickly get their business under way.

In smaller towns in which there are few industries and fewer jobs, newcomers must also bring their means for earning a livelihood. In chapter 3, we describe some ways in which they are creating livelihoods in small towns and rural areas.

Working from home holds the promise of having it all—meaningful work and more time to be with family and loved ones. The potential rewards are great, but what is it really like and would it be right for you? In the next chapter, we'll explore these issues and suggest ways in which you can prepare yourself to work successfully from home.

Copyright © 1999 Paul and Sarah Edwards


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