42 Degrees - Business from a different angle

Advances in technology have made working from home the perfect choice for employers seeking to reduce costs, and employees seeking to improve their work/life balance.

Saturday evening in the business district of any UK city: all around you, lights are burning brightly and computer screens are glimmering, ready for action. All that's missing is the people. As the kilowatts burn up profits throughout the night, as staff become more and more fed up with relentless commuting on over-crowded transport, and as the cost of business premises goes through the roof, you have to wonder, is the physical office about to be plunged into darkness?

There is a different way. It is, say many of its exponents, the greatest unreported business revolution to hit us since the dawn of the Internet. Owners of smaller businesses are realising that a permanent 'shop window' is not essential. Meetings can be held in a serviced office facility charged out on daily and hourly rates or held by video or conference calling systems. If you want to have a City address, you can buy a mailbox and you can have phone numbers with any national or international dialing code you desire.

Home-based working is today's reality. Technology has grown up. Ten years ago, ISDN was not very widely used at home. Broadband was expensive and had limited availability, while Skype and VoIP had yet to kick in. Now all that has changed and, with those advancements, the popularity of home-based businesses has leapt forwards.

Secretarial services, along with payroll and data management, led the revolution when people started using IT effectively to enable home working. "In 20 years' time, no one should need to employ a secretary," says Richard Phillips, director of OutSec, an online transcription service. His wife, Vanessa, a former PA, did some home typing when they began their family in 1996, but she rapidly saw the business opportunity of working with teleworkers and promoting their skills to the business community. They set up OutSec in 1999.

"It's a virtuous circle," says Phillips. "Every part of the business is benefiting: the home-based workers can select the hours and work to suit their own circumstances. They can take a day off and decide how many hours they want to work each week. The clients benefit with service and cost savings because they pay less than they would to employ a secretary. We sit in the middle enabling it all to happen smoothly."

Enabling the smooth operation requires a software package and a good database of available typists and their skills. Matching up the incoming work to the appropriate home worker is an efficient, fluid operation that allows individual clients to establish relationships with a particular typist. It also allows the personnel to decide how many clients they will service, who they will be and how much work they will take on each week.

Chris Barling, co-founder of Actinic, which builds point-of-sale shopping carts for e-commerce, says it's also a global opportunity: "We have developers in Hungary, Spain, Greece, France and India, as well as in the UK. We are in contact all the time – by phone, on conference calls, by email – and we all meet together at least once a year."

Actinic keeps an office for administration, but all of its development and finance functions are handled remotely by between 50 and 60 people: "We have a simple rule of thumb: people are either home- or office-based but never split between the two. If you're a developer, you really don't want to be in a busy, crowded office with people constantly interrupting you. You need time and quiet to concentrate fully on technically demanding tasks."

Most businesses using home-based workers do so on a contractor basis so they remain self-employed rather than becoming members of staff. Barling goes a little further: "Recruiting people is easier because we can take them wherever they are. We don't employ them – they are self-employed – but we treat them as employees with holiday leave, annual pay raises and bonuses as appropriate. We may use a local partner, as in India, for example, where it would be difficult to set up a small-scale business. That works well for us."

But if you remove the official building, take away the corporate coffee and lunch breaks, cancel the holiday and maternity leave entitlement and leave people without any job security, will people really deliver? The answer seems to be a resounding yes. Any residual anxiety about how productive people are when working from home is totally unfounded. "When people are happy and satisfied, they perform far better," says Richard Phillips. "There's a goodwill feeling that transfers into productivity. They are less likely to be sick or to suddenly take days off. Utilising outsourcing is the way things are going to develop.

"Those who don't consider home-working and outsourcing will, in the longer run, go out of business. I am a great advocate of giving people as much freedom as possible. We get more out of them that way."

Secretarial services and IT-based businesses may be obvious candidates for this kind of operation, but the landscape is already opening up. James Knight runs Keystone Law, a good example of how even the dusty legal world of wigs and gowns can move with the times.

"The firm is run, like any conventional law firm, from a central office in London. The difference is that our 65 solicitors are based at home in satellite offices so our overheads are dramatically reduced. Clients need to know and understand that the reason we can give them expert advice at half the usual cost is not because of any diminution in service but because we don't have the conventional overheads."

As law firms are increasingly driven by the demands of business, they are, at last, waking up to the reality that their clients don't want to pay while they wait in the upmarket company building. They will pay for expert advice and legal matters but they are disinclined to fork out for unnecessary luxuries.

"There was a huge gap in the market from the client side and from the solicitor side. A medium-sized company in the £3-5m turnover bracket will have quite sophisticated needs in commercial work. They might go to a City law firm, get an associate who stays for a year or two and doesn't really understand their business and who then moves on. From the solicitors' side, they were crying out to use their legal training without the conventions of a law firm: commuting, office hour restrictions, office politics. They want to do what they are best qualified to do and leave the administration and overall management to others."

That 'virtuous circle' described by Richard Phillips seems to chime with other home-based operators. Ultimately, this is a lifestyle choice, but the days when it meant low-grade piecework and paltry payments have disappeared. Technology has allowed us to set up businesses, work for businesses and receive business services via the Internet in a seamless flow through smart software packages.

Anyone catching the 06:30 to Victoria?