Serial No. 106-79


Printed for the use of the Committee on Education

and the Workforce


















TABLE OF INDEXES………………………………………………………………*





Thursday, October 28, 1999


House of Representatives,


Subcommittee on Oversight and Investigations,


Committee on Education and the Workforce,


Washington, D.C.




The Subcommittee met, pursuant to call, at 9:30 a.m., in Room 2175, Rayburn House Office Building, Hon. Peter Hoekstra [Chairman of the Subcommittee] presiding.

Present: Representatives Hoekstra, Tancredo, and Roemer.

Majority Staff Present: Robert Borden, Professional Staff Member; Becky Campoverde, Communications Director; Dan Lara, Press Secretary; Patrick Lyden, Legislative Assistant; Michael Quickel, Staff Assistant; Mark Rodgers, Workforce Policy Coordinator; Stephen Settle, Professional Staff Member; Rob Sterner, Paralegal.

Minority Staff Present: Michele Varnaghen, Labor Counsel; Peter Rutledge, Senior Labor Associate; Woody Anglade, Labor Associate; Brian Compagnone, Oversight and Investigations Staff Assistant; Marjan Ghafourpour, Labor Staff Assistant.



Chairman Hoekstra. Good morning. A quorum being present, the Subcommittee on Oversight and Investigation will come to order.

The Subcommittee is meeting today in exercise of its capacity to conduct oversight into issues of workplace policy. Under Rule 12(b), what you will see today is I will have an opening statement.

My colleague, Mr. Roemer, who is the Ranking Member, will have an opening statement. Any other Members that wish to have opening statements, they will be submitted for the record.

Witnesses also should know that as we go through the process today and if there are issues that are brought up that you would like some additional materials inserted into the hearing record, you will have up to ten days after today to make those materials available for the record.

Let me just talk a little bit about what we are trying to do today. The process that the Subcommittee has been embarked on over the last year and a half has been called ``The American Worker At A Crossroads``, investigating different trends in the workplace and trying to determine whether American labor law, much of which was developed in the 1930s and the 1940s is consistent or is adequate or is appropriate to meet the needs of the emerging workforce or different emerging work styles, and that is really what brings us to this hearing today.

We have talked about telework, which includes telecommuting. We have heard a lot about that over the last number of years as we have gone out and taken a look at people working in different styles. I talked with a few of you before the hearing began, and indicated that I came from the office furniture business, and back in the late 1970s through most of the 1980s, the whole concept of new styles of working where workers would spend more of their time at home where they would develop different kinds of work relationships with their managers and with their employers, was something that was on the horizon.

During much of the 1980s when I was in that part of the workplace, it seemed that much of my generation and those that were older said, ``working at home, or telecommuting, or telework, is an interesting concept, but we kind of like the social aspect of work. We liked going into work. We like the work that we are doing, but we also like the interaction''.

So, in many cases, even though technology was moving and allowing for the development of different kinds of work styles and work arrangements, the social aspects prevented people from embracing these different kinds of work.

As we now see different kinds of workers entering into the workforce, and as more of us become more accustomed to technology and we also start seeing some of the other issues, they are saying, ``well, if we embrace a different kind of work style, perhaps it gives us more flexibility'' in families where both adults have a professional career. I think we will hear stories about saying, well, you know, we are moving, for one, but I can still keep my job and I can have a different arrangement even though I may be moving 500 or 700 miles away. This is a whole new type of evolution and development.

Combine that with the rapid change in technology--a computer used to have 65,000 transistors in it, and now the average computer will have 125 million transistors in it. The Republican Conference is embarking on a process where each day we get one of the new ``soft'' books, or we are getting one of the ``soft'' books, and we update it each and every night, which talks about our legislative agenda, it gets different magazines and newspapers online every morning, and so I will have the opportunity to walk around with this new piece of equipment that will be able to hold 80,000 pages of information. So, technology is moving and opening up a lot of different avenues.

Our attempt today is to really then begin asking and trying to get answers to three questions: Let us assess where telework stands today, to what extent is telework in use in our economy. In essence, what is the state-of-the-art; (2) what are the benefits of telework for employers, employees, and our society; and (3) what problems are being encountered by employers, employees, and society.

And if we could start creating a framework for answering those questions, it could maybe lead towards a direction that Mr. Roemer and I can work on together as saying there needs to be change to labor law, or everything is fine and we can move on and investigate and work on other problem areas.

So that is kind of the context for why we are here, what we are trying to accomplish today, and I will yield to Mr. Roemer.




Mr. Roemer. Thank you, Mr. Chairman.

I am excited about the topic of today's hearing, and I want to start off the hearing by wishing my Chairman a happy birthday coming up in a couple days, his birthday is on October 30th, and if you have a way with your technology of wishing him a happy birthday. If you want to get on his good side, maybe if you have got a great voice you may sing to him but, if you don't, you might want to think of something different.

Secondly, I just want to say thank you for showing up for today's hearing. Literally, you could have testified by telecommuting and not shown up at all, and maybe some people didn't come this morning, aren't out there in the audience because they are telecommuting to the hearing. The benefits of the technology, and the use and the utilization of this technology are truly exciting.

I wanted to mention a couple different things, and ask unanimous consent for my statement to be entered into the record, Mr. Chairman.

Chairman Hoekstra. Without objection.


Mr. Roemer. First of all, as a father of three young children--six, five, and two years old, I am always looking for ways to try to make sure that both on Capitol Hill we have a family-friendly environment, but also in the workplace that we have a very family-friendly environment.

Some of our biggest policy concerns today in the United States Congress result from the deterioration of the family, and if there are ways that we can subtly promote or incentivize or allow the private sector to find ways to encourage telecommuting, which you seem to be doing already, we are interested in knowing more about it. And as the Chairman said, it will be interesting to hear from you what is the state of this technology today.

We have figures ranging as low as 5 million people currently telecommuting, to as high as 19.6 million people telecommuting. We all remember in 1996 for the Olympics in Atlanta, how many of the companies in Atlanta, in order to cut down on congestion and security problems, encouraged telecommuting across the city of Atlanta, and that resulted in some very successful and innovative policy answers to some of our questions today, but it also resulted in some snags and some problems that maybe you will address here this morning as to how we try to solve those problems in the future.

Also, it is going to be interesting, in addition to the family-friendly aspect of this, how does telecommuting help our environment? How does it cut down on pollution? How does it save us social costs? What about the commuting that more and more people will go through every day, whether it is in Washington, D.C. where they may be stuck in an hour and a half of traffic in the morning and an hour at night, or whether it is across the country in some of the different cities that people are finding they are spending less time with their families and their children and more time in a car, which creates pollution problems and other problems.

I am very excited about the possibilities here with telecommuting. I look forward to what our witnesses have to say this morning, and what suggestions they have for us, what innovations they have for us, what they see in the next ten or 15 years. I hope that they can look with some vision out there, and expand a little bit more on what we are currently seeing as an expansion in this area, and where the technology might go and what this means for the workplace as we know it today, what it means for families, what it means for the environment, what it means for roads, what it means for policies, and what it means for personnel policies in your businesses as well.

So, with that, I look forward to the innovation that we are going to hear about today, and yield back the balance of my time.


Chairman Hoekstra. Thank you, Mr. Roemer. I wondered how anybody would know when my birthday is, and I found out we share the same birthday. So, happy birthday to you, too.

Mr. Roemer. Thank you.

Chairman Hoekstra. So we agree on a few things. We disagree on football teams and those types of things, but other than that we do all right. Again, welcome and thank you for being here. I think the panel that we have really represents some of the people who understand and are participating in the cutting edge of the issue that we are talking about today. Let me introduce the witnesses.

Our first witness is John Edwards, who is the CEO and Executive Director of Telework Analytics International, Inc., which is in Arlington, Virginia. He is appearing today in his capacity as the current President of the International Telework Association and Council. Good morning to you. And you are joined by Gail Martin, who is the Executive Director of International Telework Association. Good morning to you.

Our second witness is Debra McKenzie, who is Director, Flexible Work Environment and Field Operations for Lexis Nexis of New York. Good morning.

Our third witness is Dr. Braden Allenby, who is the Vice President, Environment, Health and Safety, AT&T, of Basking Ridge, New Jersey. Good morning. Thank you for being here.

And our final witness is Tom Vines, who is the President of the National Association of African-Americans in Human Resources, which is located in Washington, D.C. Mr. Vines is appearing to share his experience as a teleworker with the CIGNA Corporation.

We have these little lights up here. I think we have asked you to limit your remarks to roughly around five minutes. Again, any additional materials that you have with you or that you would like to share with us over the next ten days will be part of the official hearing record. We start with a green, it goes to yellow, a red means your time is up, but that is okay, I have a weak gavel and it is a very interesting topic, so we are flexible. Mr. Edwards, we will begin with you.



Mr. Edwards. Thank you, sir. First of all, I would like to thank Chairman Hoekstra for inviting us to take part in the hearings today to discuss the new way to work commonly know as teleworking.

Telework is part of a general trend toward progress in the workplace. Two terms have been associated with this new concept of workplace, telecommuting and teleworking. They are somewhat interchangeable, but whereas telecommuting, the earlier term, focused almost exclusively on the commuting aspect, the term telework embraces a larger arena that includes telemedicine, distance learning, and electronic commerce.

As we move from the Industrial Age and into the Information Age, the nature of work, as well as the workplace, is changing. Telework is an Information Age phenomenon growing out of information-based work as well as the rapid advance of technology. Recent capabilities, such as widespread availability of computers, e-mail, voice mail, Internet, et cetera, have helped open the door for telework. Also, work values are changing, and today there is a new emphasis on family-friendly workplaces. These values have motivated workers to seek out work arrangements such as telework.

Telework can generally be defined as using information and communications technologies to perform work away from the traditional worksite. Telework, in its original concept, was related to the reduction and/or distance associated with the employee's commute to the main worksite. There are multiple drivers and benefits of the telework movement that I will get into in a minute.

The occurrence of teleworking can be affected by many factors, such as frequency, location, type of work, and the definition of an alternative worksite. For instance, it is important to tailor the type of telework implemented to the goals and objectives of an organization.

In the research data cited in the report of Cyber Dialogue and ITAC, that is the abbreviation for International Telework Association and Council which I am going to cite later on. A broad definition of teleworker is utilized. Namely, ``Employees or independent contractors who work at least one day per month at home during normal business hours''. ITAC found that the average number of teleworked days is between one and two days per week.

What is an alternative worksite? The alternative worksite is the location away from the organization's main worksite where the employee teleworks. The most commonly used alternative worksite is the employee's residence. Other alternative worksites include telework centers, satellite offices, hotel rooms, client offices, airplanes, trains, and automobiles. To an extent, the definition of an alternative worksite depends on the task being performed. Thus, alternative worksites can range from designated work locations that reduce employee commutes to anywhere.

The drivers behind teleworking, what is driving teleworking? First of all, competitive pressures to reduce operating costs, especially real estate, and to improve the ability to recruit and retain workers; (2) traffic congestion; (3) changing worker values leading to more insistence on demanding a balance between work and personal life, as well as generally seeking a reduced level of everyday stress; (4) demographic trends, increases in dual wage earner and single parent families, providing increased pressure to balance work and family life; (5) social and political pressures for environmental conservation of scarce resources; (6) the transitional from Industrial Age working to Information Age working, brought about by advances in technology.

The growth of telework in the United States. The United States is currently the leading telework nation as far as numbers of teleworkers are concerned. Emphasis on advanced technology, the relatively flexible work market, and highly developed entrepreneurial spirit contribute to this position. Numerous examples of the increase in teleworkers and telework programs exist throughout the public and private sectors.

Members of our Blue Ribbon Panel, for instance, with exceptional telework programs, are AT&T, Dun & Bradstreet, Bell South, U.W. West, Merrill Lynch, Lexis-Nexis, Ely Lilly, and Cisco. Nortel recently exceeded a total number of 4,000 remote workers. Keen interest in telework in other areas of the world, especially in Canada, Europe and Japan, where their efforts are greatly supported by their governments.

According to new research based on IDC's, which is the International Data Corporation, 1999 U.S. Residential Telecommunications Survey in 1999, 27.4 percent of all U.S. households reported conducting work from home in some capacity, either as telecommuters, corporate after-hours workers, or home-based business operators. The IDC survey also showed that PC penetration and Internet access tend to be higher among work-at-home households when compared with average U.S. households. IDC's survey of a sample of U.S. households shows online penetration among U.S. households has risen to 30 percent, up from 25.5 percent in 1998.

According to a survey conducted by Cyber Dialogue in 1998 there were 15.7 million teleworkers in the U.S. then, and the number of teleworkers rose to 19.6 million as of mid-1999, according to new research conducted by ITAC.

The Internet is helping to fundamentally transform how workers connect to employers, giving rise to new workstyle relationships such as small businesses that rely heavily on skilled teleworkers to meet productivity needs when the economy is strong. Widespread awareness and use of the Internet has created a focus on the role of technologies in causing what we like to call the ``death of distance''.

Almost half of the full-time teleworkers are employed by small businesses with less than 100 employees, while 24 percent work for large companies with 1,000 or more employees.

Demographically, according to ITAC, telecommuters in 1999 are around 38 years of age, only slightly more likely to be female, 52 percent, and they report median household income of $44,000.

The main benefits: improved competitiveness at both the individual and organizational levels; (2) improved ability to recruit and retain workers; (3) improved quality of worklife; (4) reduced absenteeism; maternity and medical related leave can be minimized; (5) potential expansion of underutilized segments of the workforce, such as retirees, the disabled, those workers in geographically remote areas or where manufacturing and farming industries no longer exist; (6) economic development especially in rural areas; real estate savings; reduced toxic gas emissions, and improved management methodologies and practices such as managing by results rather than by line-of-sight management.

The telework challenges that we find are out there: (1) resistance to change and new ways to work and manage, in other words, managing by results rather than line-of-sight management, i.e., overcoming one of the teleworker myths--if the employee is out of sight, he is out of control; (2) rapid advancement of new technologies ahead of worker familiarity and acceptance of them which, of course, leads to increased need for technical support; (3) utilization of data security measures; (4) equitable selection of teleworkers v. nonteleworkers, and defining the difference between a formal and informal program; (5) funding for a comprehensive source of telework program information to feed into a best practices scenario; (6) the need for continuing research.

New directions that we see things moving into. With the widespread availability of new technologies, whom you work with not where you work is becoming more important in determining modes of working. It is people, not places, that now define an organization. This refocus of activity increases the potential for teleworking, since almost all managerial, professional and innovation jobs include a high proportion of work that is location-independent.

The unit of the networked economy is the individual knowledge worker rather than the corporation. Tasks are not necessarily assigned and controlled through a traditional chain of management command, but are often carried out autonomously by temporary virtual teams, who join together to produce and market goods and services. When the task is complete, the network dissolves and its members regroup and are reassigned to pursue other projects. This is being mirrored in large organizations in the form of ad hoc project teams.

Hot-desking and hotelling remove the walls of the traditional office in which people had their own personal and permanent space, substituting group space where individuals book or find space as they need it, depending upon whether they need quiet surroundings or wish to work with a group of colleagues.

Some telework organizations are trying ``work anytime'' arrangements. Such arrangements can involve work time shifting that can cover an eight-hour day known as flextime or alternative work schedules.

Finally, there have been new partnerships between telework programs and other tele programs such as telemedicine and distance learning.

ITAC would also suggest that the traditional definition and concept of transportation, the movement of people and/or goods from point A to point B, be expanded to include electronic movement of information as it relates to the workforce. In other words, we are no longer transporting people to work, but transporting work to people.

I have a list of some suggested ways that the Government can generally help enable teleworking. I have split them into fiscal and socio-economic.

The fiscal ones: (1) Provide accelerated tax allowances on telework enabling investments, such as hardware, software and office furniture; (2) remove tax authority bias against persons taking home-office deductions or allowances, I am suggesting there should be an employer-issued form, which I call T2000, to confirm that the tax filer is a bona fide teleworker, which they would include with their tax return so it didn't raise a red flag; define residency of telework for tax purposes; clarify who is the taxing authority over work produced getting into transfer pricing and taxes there; remove fiscal bias against telework, I am suggesting that we remove the Capital Gains Tax levied on the sale of teleworker home if the home office allowances have been taken; confirm tax status of the teleworker, he is an employee, not an independent contractor; continue moratorium on Internet taxes to encourage the wider use of computers, the primary tool of teleworkers; prevent imposition of cable Right-of-Way fees, taxes or levies by local governments, essentially a backdoor Internet tax, which discourages telecos making bandwidth available to rural and disadvantaged areas which are often urban areas as well; provide grants to encourage the use of telework to create jobs in rural and disadvantaged and urban areas; provide matching grants for approved telework training programs.

The socio-economic ones, just 13: Provide a Telework Extension Service, similar to the USDA Extension Service, but using a telework non-profit as the provider, to help all sectors and regions by providing national telework coordination, certification, implementation and advisory services. Funding should be jointly contributed from the transportation, labor, education and technology budgets to insure impartiality.

Federal and State governments must mandate, not suggest, that 20 percent of their government workforces, that are telework eligible, will telework, in other words, lead by example.

Promote telework as a creator of jobs and population stability in rural and disadvantaged, including urban areas. Position teleworking as a vehicle for providing an increased deployment of Information Technology nationally, thereby continuing to maintain the momentum of the productivity gains that have driven the sustained growth and prosperity of the U.S. economy in the late 1990s. For that, I refer you to Federal Reserve Chairman Greenspan's testimony before Congress in June of this year.

Provide Federal Agencies with an incentive to benefit from real estate savings made by them. As we understand it, real estate savings revert to the Interior Department, so there is no incentive for agencies to make any telework-related real estate savings.

Often agencies haven't budgeted for the implementation of telework programs, so we would suggest that discretionary spending be allowed to agencies to budget for telework.

Executive Orders related to telework should have teeth. Recognize that widespread teleworking can help to lessen the ``Digital Divide''. Recognize the potential impact of teleworking on the reduction of juvenile crime.

Educate local governments on the potential benefits of telework, to especially include environmental benefits. Provide incentives to encourage the use of flexible and time-shifted office hours to reduce peak travel congestion; provide incentives to encourage employers to reduce commuting to work; prevent covenants and local zoning regulations from unreasonably prohibiting an employee from teleworking from a home office. Thank you, Mr. Chairman. I am sorry I went over my time.



Chairman Hoekstra. You went over?

Mr. Edwards. A little.

Chairman Hoekstra. All right. Thank you very much.

Ms. McKenzie.



Ms. McKenzie. Mr. Chairman and Members of the Committee, imagine a world where your only work tool might be your phone line, where your job is not defined by geographic boundaries, where your work schedule could be set by you and not someone else, where your commute could be down your hall, where you can team with, partner with, and work with people all over the world without ever leaving your home. Imagine telework.

As the Director of the flexible work environment for Lexis Nexis, we have actively engaged in and supported telework and flexible work scheduling for employees since 1995. Currently, we have approximately 18 percent of our total workforce teleworking today. The majority of our employees are considered ``knowledge workers''.

The benefits of telework for Lexis Nexis are extensive. Let me highlight some of the key ones we found. One of the biggest ones is the quality of life, the balance of life of our employees. Most of our participants express greater job satisfaction because they have the ability to select different options for working.

This program has helped us maintain our reputation as a family friendly company. We have maximized the use of facilities through innovative use of space and, in the initial phase of our program, starting in 1995 and 1996, we were able to reduce our lease expenses by over 63 percent.

The ability to expand our workforce without expanding facilities and incurring costs have been dramatic. One example is a recent project that required the hiring of 200 people over a two-year period. Ninety-one of those people are onboard, they are all recent college graduates, they all work from home.

Retention of highly skilled employees is key. We have over 27 employees that would have left our company if we did not offer alternative work solutions because their spouses were transferred out of their geographic areas. Not only were they able to retain their jobs with our company, but they didn't face the stress of trying to find a new job in a new location.

We have seen significant productivity improvements in our workers, particularly in the technological arenas, reported up to 20 and 25 percent improvements.

The benefits for our employees, those that I will share are from our participants as well as from my own personal experience.

A visually handicapped employee of ours in the Dayton, Ohio office decided that he would like to move to an environment he felt was more conducive to his lifestyle. He approached us about moving to Philadelphia, and could he stay employed with us. We were able to equip him to do so.

Another employee recently decided to make a career change, from a technological field to becoming a doctor. But instead of not being able to afford medical school, he continues to work for us while he is pursuing his degree.

Employees in our major metropolitan areas have expressed delight over not having to go into the cities every day. They feel more in control of their work schedules, more in control of the stressful interruptions they face in the traditional work environment.

When I lived in Northern Virginia and worked here in Washington, D.C., my commute was one and a half hours, or more, each way. My son was two years old. I felt that I was missing time with the most important person in my life. I began to telecommute. I could spend three additional hours per day with my son. I could put him to bed at night and go back to work without ever leaving my house, and feel secure. Needless to say, my job satisfaction level grew immensely, as did my satisfaction at being a mother.

Two of the telework managers in our company work for me. One is here in Washington, she lives in Maryland, so she works at home and also in the office; another in Dayton, Ohio, she works in the office and her home. From their perspective, they feel more productive. They feel more in control of their schedules and of their workload. They feel a better sense of balance. From a manager's perspective, I find that they can complete tasks faster. I can reach them as fast, or faster, than I did when they were in the traditional office environment. And both have demonstrated significant professional growth since they have been teleworking.

Benefits of telework for society certainly must include reduced traffic congestion in the major metropolitan areas; a cleaner environment due to reduced use of private vehicles; a society of people who feel less stressed, whether it be at work or in the commute; telework can and does provide less developed geographic areas with job opportunities, without bringing in the traffic congestion, the buildings, the pollution that goes with those jobs.

As we look at telework growth in the future and the challenges that face us, one that faces the individual, our companies, and society is, how do we best leverage the many technological advances we are seeing. The lack of consistent low-cost data and voice connectivity across the United States is a major challenge. High bandwidth voice and data systems are not always available everywhere. The ability for a company to provide a consistent platform of support for those services is very expensive, and almost impossible.

As an employer, one problem we are concerned about, have no long-term data about, is isolation and how would an employee do if they have been out of the office environment for two, three, or five years.

The biggest challenge for us all, I think, is how do we maximize the benefits of a telework program? Many companies can't afford a startup, they don't have the knowledge or the expertise. Our company spends about $10,000 per employee just to equip them to do their jobs in a home environment or teleworking environment, so that they are as productive as a traditional office environment. Small companies may not be able to afford that. That doesn't include the cost of ongoing support, training, and assistance.

With the population of single parents on the rise, the growing number of people providing elder care for parents, it is apparent that the Government and employers must provide work options to create viable employment without jeopardizing the quality of life for these caregivers. Telework and alternative work practices provide options for that.

Suggestions on how we might maximize these benefits. There is a lack of public education, information, funding and training. This Subcommittee is to be applauded for exploring this opportunity, and I would ask that you provide significant and very loud verbal support to your peers, your constituents, and the general public, about this program and its benefits.

Support for those companies already actively involved in supporting telework or various work alternatives should receive some type of credit or incentive to continue and to grow those programs, be it in the form of tax credits, tax incentives, preferred Federal Government vendor status, the list can go on and on, of ways to reward them for what they are already doing.

Incentives for employees to pursue it with their employers, whether it be the home office tax credit or other means, would provoke more employers to give this consideration. Approved funding for consultants knowledgeable in the field of telework is necessary to assist in starting up programs to fully maximize benefits of telework in both the public and private sectors. Funding for non-profit organizations such as ITAC to continue its research and provide best practice information to companies is critical.

Thank you.


Chairman Hoekstra. Thank you very much.

Dr. Allenby.



Dr. Allenby. Good morning.

Thank you, Chairman Hoekstra, Representative Roemer, and Members of the Committee, for inviting testimony from AT&T on the topic of telework.

I am Brad Allenby, the Vice President for Environment, Health and Safety for AT&T, a global communications company with approximately 150,000 employees. In this position, I am responsible for engaging AT&T employees and leveraging AT&T's technology to protect human health in the environment in all operations, services, and products. I will refrain from singing Happy Birthday to you, based on extensive feedback from my family.

For the past decade, AT&T has made measurable gains in implementing a telework program across various department of our company. We appreciate the opportunity to share some of our experiences with you.

In 1992, we introduced a formal telework policy and started the Virtual Workplace training program. Today, we find that over half of our managers telework at least one day a month, about 25 percent of them telework one day or more per week, and 10 percent telework 100 percent of the time. This is a three-fold growth since 1992.

The reasons that those numbers have increased so dramatically, I think, are twofold. The first, technological innovation; the second, increased management awareness and support.

The future arrived while no one was looking. The rapid spread of new telecommunications technologies, which have been mentioned by others, such as broadband capacity to the homes through cable, satellites, fiber-optics, copper wire and wireless networks, have all begun to create an infrastructure for a new Information Age.

Telework is a highly desirable technology that has resulted from that, in that it provides social, economic, and environmental benefits. Now, in saying that, I think it is important to recognize that much of the data surrounding telework at this point are very soft. What we know, we think we know.

Among the social drivers are the satisfaction that our employees find in their jobs. Seventy-six percent of AT&T teleworkers report that they are more satisfied with their job after teleworking than before they started to telework. What is just as interesting to us is that the teleworkers are not alone in this, their families also report enhanced quality of life. These data, by the way, come from a survey of about 1,000 AT&T managers that we do every year to try to get some reasonably good data on these trends.

The economic drivers. The three ``Rs'' of real estate, recruitment and retention are the primary economic benefits from teleworking. AT&T, for example, estimates that its implementation of teleworking results in an annual real estate savings of $25 million. And because of the enhanced quality of life and personal freedom which teleworking fosters, we are better able to retain valued employees and recruit high tech employees in a very competitive market.

Our data also indicate that teleworking enhances productivity. Teleworkers report being more productive per unit time, and also they have more time because of the previously nonproductive commute time they can use between their family and their work.

The environmental benefits, I think, are important. The most cited benefits are the potential energy saved and the concomitant reductions in carbon dioxide, hydrocarbon and NOx emissions. In 1998, for example, we estimate that telework enabled AT&T to reduce carbon dioxide emissions by an estimated 55,000 tons.

You have asked us also to asses the best strategies for ensuring the continued success of telework as it is increasingly adopted in the private and public sectors. I would suggest that three key factors are (1) providing the enabling technologies; (2) answering unresolved legal questions; and (3) developing more robust data on social, economic and environmental impacts of telework.

Providing the technology. In our most recent survey of AT&T employees, we found that our telecommuting numbers had flattened. The reason that was most frequently given was the difference between the data speed at home versus the data speed at the office, narrow band v. broadband, particularly where the job requires significant amounts of information transfer. As was just mentioned, that becomes a very significant impediment to telework. As broadband arrives to the home, our survey results indicate that teleworking would increase.

Second, with any new nontraditional work arrangement, there are going to be labor and employment issues which are important to both the employer and employees and need to be resolved. Among the issues that we have identified, for example, are the application to telework of the Americans with Disabilities Act, OSHA, Worker Compensation, Equal Opportunity/Affirmative Action requirements, insurance and liability requirements, and wage and hour laws.

You have to anticipate that because this is a shift in the previous strong line between work in one location and family in another, these kinds of issues are going to arise. These laws were never designed to handle a teleworking environment.

You have also asked us to comment on Federal Government policies that could enable telework. We support two recent Federal initiatives that have stimulated interest in telework: Representative Wolf's pilot program to measure the impact of air quality credits for participating private and public firms, and the increase in budget dollars to promote the Federal Government worker's awareness of the telework centers. In addition, there is a number of state initiatives on telework to encourage and facilitate that kind of activity that could be adopted on the Federal level.

In the knowledge economy, it will be absolutely critical for the high tech industry to provide highly reliable broadband connectivity to support a dramatic new means of working. This new era will thrive on innovation and infrastructure investment. From a policy perspective, therefore, we urge you to approach these new workplace models with the same spirit of innovation, not regulation, that has resulted in so much positive progress to date.

Thank you again for inviting AT&T to share our experience with you. This concludes my prepared statement, and I would welcome any questions.


Chairman Hoekstra. Thank you very much.

Mr. Vines.




Mr. Vines. Mr. Chairman and Committee Members, thank you for this opportunity to testify on telework. My name is Tom Vines, and I am a supporter of teleworking.

In 1993, I joined CIGNA Corporation. CIGNA constitutes one of the largest employee benefits organizations serving the United States and selected international markets. As Vice President of Human Resources for their Technology Division, I was responsible for one of the most competitive disciplines in this country.

My primary responsibilities were to hire, to develop, and to retain top computer/information systems professionals to support CIGNA's businesses. My approach was to work with the management team and create an environment that people would be attracted to and would want to remain in. I called this approach, becoming an ``Employer of Choice for Information Technologists''. The approach encompassed such items as providing comprehensive training to our employees, improving the quality of our management team through management development training, and helping our employees balance their work and family life.

I am proud to report that we made significant progress on training our employees and developing our management team by working with local universities, such as Temple University, Drexel University, and the University of Pennsylvania. Likewise, we made significant progress in helping our employees balance their work and family life through telework as well.

Telework was attractive to our employees because it allowed them to avoid travel time and travel expenses such as tolls and parking fees. It also allowed for a better balance of work and family life since they could more easily participate in home responsibilities. Both our employees and managers reported significant productivity gains.

Telework also allowed us to retain employees with critical skills who might otherwise leave because of family or personal obligations. Additionally, some employees who took a child care or elder care leave continued to work at a reduced schedule but when they returned to work they required less retraining.

I should also note that teleworking has also played an important part in helping us to keep our computer systems working and staffed during severe weather conditions. The availability of our computer systems were critical to the quality of our customer services to all of CIGNA's customers.

Additionally, our employees became more motivated at the signs of trust and confidence due to our adoption of a more independent workstyle. Telework provided flexibility to our employees and has been an important factor in attracting and retaining highly competitive skills. Recently, CIGNA was recognized as one of the best places to work for computer/information technologists by ComputerWorld Magazine.

From a personal testimony on telework, in August of 1997 I decided to continue my education through an accelerated Master's Degree program in human resources management at American University in Washington, D.C. I was fascinated by this program's comprehensive approach on educating students on new trends in the human resources field.

This 18-month program required me to spend Fridays and Saturdays attending classes in Washington. Six months into the program, my Dad became ill and I needed to help my Mom with his care. They lived in Stafford, Virginia, just 40 miles from Washington. I had a job in Philadelphia, Pennsylvania, a pursuit of a Master's Degree in Washington, D.C., and parents in Stafford, Virginia. I considered taking a leave of absence from work through the Family Medical Leave Act. However, like most parents, they insisted on me not leaving work. I insisted on helping and the answer was telework. Telework helped me to manage my work, my education, and my family life.

Through my laptop computer, which goes everywhere I go, I was able to work from my parents' home usually one or two days a week. I helped my parents with running errands and doctor visits through the day, and often during the evening I would log onto my computer and work from their house on both school work and my work at CIGNA. Telecommuting provided flexibility in a period in my life when I needed flexibility. I have several brothers and sisters who live in close proximity to my parents and they would also help out. However, it was personally important to me to help as the diagnostics for my father was not promising and he eventually passed.

Today, I am President of a new national association called the National Association of African-Americans in Human Resources. The association is comprised of 17 local chapters, and our primary purpose is to encourage African Americans to consider the human resources profession as a career.

The association is also focused on providing leadership on issues affecting the quality of life for African Americans as well. I believe that more adoption of telework by companies would enable a greater participation of African Americans in the workforce. Thus, the unemployment rate of African Americans would decrease.

Our association intends to work with various job training programs to help enhance their training curriculums to include developing personal skills to ensure an individual's success at teleworking.

In summary, I advocate telework for the right person, with the right home environment, the right manager, and the right task. The right person has personal motivation skills. The right home environment involves both technical equipment and often a concentrated work area. The right manager can supervise and coach from a distance. The right task entails a task with considerable autonomy. I believe the adoption of telework under the right circumstances listed above would be a win for the individual employee and the individual employer. Moreover, it would be a win for America especially in our tight labor market.

Thank you, and I look forward to your questions.


Chairman Hoekstra. Thank you very much. I am expecting this is going to be a trend that is going to accelerate. You have all outlined a whole series of reasons as to why this will occur.

As much as it is a benefit to the companies, it is a benefit to the employers, it is a benefit to the employees, and there is a societal benefit as well. So, you put that all together in a mix and everything is kind of headed in the right direction.

Actually, Mr. Vines, you kind of wrapped it all up here at the end. I think this is an issue that we, as a Subcommittee in this area, can deal with. We can make recommendations on the tax issues and these kinds of things, but I think, Dr. Allenby, you brought up some questions about OSHA, the Fair Labor Standards Act, and wage and hour, and all of these types of things, and Americans with Disabilities. Mr. Vines, you brought up the issue, and I think it came out in the other testimony, too, but it is kind of like the right home environment, the right manager, the right task, the right person as a personal motivation, the right home environment--I mean, how do you deal with just the issues of equity with workers. What if somebody doesn't have the right home environment? Is it their responsibility to get it? And how do you monitor it, or how do you even check it out? Does anybody have a shot at how you can answer those questions? Ms. McKenzie, do you do that for Lexis Nexis?

Ms. McKenzie. As far as selecting the people in our field locations, we really didn't have a choice, it was a mandatory program. As we have evolved it, it has not become a very selective kind of process.

Chairman Hoekstra. I mean, as a mandatory program, so that in the hiring, when you are hiring people, it is kind of like one of the requirements was--

Ms. McKenzie. Depending on the job function?

Chairman Hoekstra. What was that?

Ms. McKenzie. Like Mr. Vines said, it does depend on the job function. Some jobs are hired with that profile, and so they know before they are even hired this is the requirement. And, of course, we still outfit them with the equipment necessary.

We have found, though, that the people that we require to work at home typically are in our self-environment, so they are not at home all the time chunking lots of data through and having to do a lot of work online. They can do this sporadically.

Other functions within our company where they are required to sit in front of a monitor, if you will, all day long, we provide them with desktop equipment, and that is more voluntary. We do interviews with the employee who has asked to join that program, to ascertain if that person has that self-motivation, if they have the ability to self-manage their time.

We also do interviews with their manager to see if the manager can manage them remotely because it really isn't any different than managing in an office environment, it just feels different, but we work with both. And if that manager is not deemed ready yet to manage someone remotely, we will say ``Let's wait a few months, let's work with you, let's train you on how to best manage someone in a remote environment and, worker, let's train you on how best to manage your own career and your manager in a work environment''. So we do team with those managers and with those employees to provide the training to help them get there.

We have found that some people have selected to move into a larger place. Other people have selected--and I think it goes back to the individual and how they work. Personally, I work all over my home. My laptop can plug in any phone line I have in the house. Because my son is little, I tend to go where he is. So, if I am working on the weekend, I will be in his room with him. If I am working when he is not there, I will be in the living room where my office is. So it depends on the person and how they work. So, we really work with them about understanding their psychological views about working, what triggers them to work and to stop working, so we can help them set up the environment at home to facilitate that, or on the road.

Chairman Hoekstra. Would there be people who have done similar jobs where one person is asked to do telework, that you would have permitted them to do telework, and somebody else with a similar job where you would have said you can't, you are not ready?

Ms. McKenzie. We would say you are probably not ready to do this yet. In our company, it usually requires anywhere from six to nine months of training in most of the jobs that we have. So, a lot of it is around how long have you been here? How long have you been doing this job? Are you fully skilled in performing this task? And if the employee is not allowed--it is not that we say you can't do this, it is let's take a few months, let's develop a plan for you and/or your manager to get you ready to move forward.

Chairman Hoekstra. So, Dr. Allenby, if Ms. McKenzie worked for you and she was walking around the house with her laptop, plugging it in at all these different locations, some of which have good lighting, some of which do not; some of which have ergonomic seating, some of which do not; sometimes where she is sitting with a laptop on her lap, other times where she is sitting with it at the kitchen table and it is too high and it has got a sharp edge and it cuts into her and gives her carpel tunnel, are these some of the issues that you are worried about from an OSHA standpoint, where you don't technically have control over the workplace or the worker?

Dr. Allenby. I think you said that very well. That is precisely one of the issues that our lawyers have. Conversely, what happens if you are cutting the lawn when you are supposed to be working and you are injured doing that, does the fact that you signed a telework agreement that says you will be working during that period mean that you are, in fact, covered by Worker Compensation laws?

The real dynamic that is going on here is that our labor laws and our entire policy structure was designed for a period when you knew the difference between work and home, because most work was manufacturing. Now that that is broken down, now that the spatial and temporal boundaries to work have dissolved and they are intermixing, it becomes very, very difficult to understand how to apply the previous legal structure.

Chairman Hoekstra. All of you are indicating you are moving ahead. I mean, you are not telling people we can't do this. You say you have got people who are at home, who may be mowing their lawn. I don't know whether you have had test cases or not already--

Dr. Allenby. I hope not.

Ms. McKenzie. We don't.

Chairman Hoekstra. I mean, is this an area where you would say to Mr. Roemer and myself, we can only go so far, or we are going down this road and we are taking a level of risk that maybe we are a little bit uncomfortable with, it is time for Congress to come in and to really clarify it, or is it kind of like we are going down this road, but we are not sure you can help, just kind of back off. Are you asking us to, come out and clarify this law, so you are asking us to come in and do something.

Dr. Allenby. I think the appropriate place to begin is a dialogue because, of course, there are unions that would have an interest in participating in such a dialogue, and there are the companies that should be involved.

I think that it is important to begin that dialogue because the future is not going to stop because we are having increased risk, for example, at AT&T in implementing telework, nor am I going to tell a GenXer who is liable to go work for Silicon Valley that I am not going to let him telework or her telework.

I think what we really want to do is we want to make sure that, as we move forward, whatever we create is flexible enough so that it can adapt to pretty unpredictable technological and cultural evolution. We really don't know what work is going to look like ten years from now. The idea of having individuals that contract out pieces of their time to different companies becomes very interesting, but very, very difficult to manage.

Should OSHA be able to go into a home to look at the working arrangements? There probably would be a lot of difficulty with that. On the other hand, should there be some kind of protection for the worker? After all, we are talking about companies that are doing it because the workers want to, but there are ways that this, at least theoretically, could become exploitative. How do we control that?

I think that there is a need for a lot of dialogue, and I would certainly be willing to participate in that with you.

Chairman Hoekstra. Are you having that dialogue with your unions now?

Dr. Allenby. Yes.

Chairman Hoekstra. Okay. Because I am assuming that you have union workers that are teleworking, or not?

Dr. Allenby. Right now, it is not bargained for. They, fortunately and interestingly enough, see it as a benefit that needs to be discussed. But, of course, that gets into a lot of difficult contractual issues on other requirements. What about overtime? How do you determine overtime in a telework environment? You can't do it just by any sort of time card or time in office anymore. So there are a number of problems as we go forward.

You are absolutely correct, Mr. Chairman, it is not going to stop us, but the more the risk increases, the more it becomes a little bit dicier on the cost-benefit side.

Chairman Hoekstra. Mr. Roemer.

Mr. Roemer. Thank you, Mr. Chairman. I think what we are trying to do here with you is better understand the whole phenomenon in the growth of telecommuting and telework, and enter into this dialogue wiht you now, and better understand some of the positives and some of the incentivizing that might go on, and try to understand how this process is going to take place, whether or not Congress incentivizes it or not. It is growing, I think it is going to grow more. There are both positive and probably some negative things that you need to deal with.

Let me ask a series of questions to our witnesses that I think have been very helpful in getting this dialogue started.

Ms. McKenzie, you said that at Lexis Nexis you have seen your lease expenses reduced by 63 percent. What kind of cost savings is that?

Ms. McKenzie. Over $5 million annually.

Mr. Roemer. Over $5 million annually.

Ms. McKenzie. And we anticipate another up to probably $2 million in the next two years because of similar practices.

Chairman Hoekstra. I bet they found a savings of at least 1 percent.

Mr. Roemer. Which wasn't--they didn't mandate to everybody, right? Okay. $5 million. And you said the startup cost for your employees to get them going in telework was about $10,000 per employee?

Ms. McKenzie. Per employee, correct.

Mr. Roemer. And with productivity cost-benefits primarily, a host of other things that you accrue, really, this is probably something that is a break-even with you at this point?

Ms. McKenzie. This is our return-on-investment on our initial program, which was a two-year program. We saw a payback in about two and a half years, we expected a payback in over three. I think we are probably one of the few companies that has actually saved money per individual in facility cost and in our telephony and voice activity cost.

Mr. Roemer. You also said that there was increased satisfaction, increased productivity, increased happiness from many of your employees. I guess some of this doesn't come without some problems as well, too. And Mr. Allenby mentioned this. I want you to comment on it first, and then I want to ask Mr. Allenby the same question. I think he said that 10 percent of his employees telework 100 percent of the time.

Now, I am not sure, how are you a manager and managing people and being concerned about their morale and their productivity and overseeing them, and bringing people together to motivate them to be in sales, as you guys are doing here with many of your teleworkers, and they are always in a telework situation? Now, I think I know the answer to it, but maybe you can help me.

Ms. McKenzie. Are you going to share that answer? The way our company does it, we still have built facility locations throughout the country. We went from 44 locations to 16 in larger areas. Our sales people still come into an office. They still have meetings with their managers. We have net-meetings. We do a lot of telephonic conferences. There are still training programs that require them to come back to a campus location or a facility location. So we don't ever let that face-to-face go away completely.

Probably of the 18 percent of our workforce, we have about 20 percent that work at home all the time. Those people are still required to come to a facility when it is required for training, or for meetings. They also know that if their job requirements change, they may be asked to come back to an office environment for training or to work there. It depends on what their job function is. So we don't ever say, you go home and you never come back to the office. We continue that dialogue.

We also do surveys of our participants and our general population of employees to see what their satisfaction levels are and what is working for them and not working for them.

One of the things that didn't work well for us in the beginning was we did not provide enough training, and we know that, and that is why we now come back and say we will provide training for employees, for their managers, and also for their teams that they reside on.

Mr. Roemer. What is your retention and attrition rate in the people that telework?

Ms. McKenzie. Good question. Our attrition rate overall is going to vary by function, but I think we are seeing around 7 percent attrition total. Our attrition rate with our teleworkers has been much smaller than that because they can work anywhere. They can move. Most of them set their own hours, if they are sole contributors. We have found that they do sign an agreement that says we are going to work between this and this, but then there are ongoing negotiations with their managers if they see that their life may evolve and change a little. We have one employee who actually golfs every day, and his manager knows that in the afternoons, because he is such an avid golfer, he is not there. And that is fine because he is a sole contributor. And his productivity has gone sky high.

Mr. Roemer. On the golf course, or at work?

Ms. McKenzie. At work. At work, because he is able to--

Mr. Roemer. I bet his handicap has gone lower.

Ms. McKenzie. Exactly, yes. But he is very happy, so is his manager.

Mr. Roemer. I bet.

Ms. McKenzie. I am not sure if I have answered all those questions or not.

Mr. Roemer. Dr. Allenby, let me come back to you and start with the first question I had with Ms. McKenzie. You said your real estate savings were $25 million?

Dr. Allenby. That is correct.

Mr. Roemer. And what are your initial costs to startup for a telework individual?

Dr. Allenby. They are not as great, in part because--

Mr. Roemer. Not as great as the $10,000 that Lexis Nexis has.

Dr. Allenby. As $10,000, because we have laptops, and the laptops are usually carried around with the teleworkers, wherever they are. So when they come into the office, they just plug the laptop into the docking station there. When they are home, they plug it in there.

Mr. Roemer. So, what are your startup costs per individual?

Dr. Allenby. I would say it depends probably anywhere between $1500 to $6,000 maybe, but there are some questions there. For example, what kind of ergonomic furniture should you support in every home? That can be a very difficult question.

Mr. Roemer. So what do you do with those fellow workers? Do you say to them, ``here is a budget of $8,000 to go out, and we are going to supply you with a laptop, but we are also going to encourage you to buy this equipment for your fax machine and your portable telephone, and here is the kind of ergonomic equipment that we want you to get, and here are your choices''? What kind of budget do you provide them to do that?

Dr. Allenby. We don't provide them a budget per se, we provide them all of the equipment they need. And that, I think, is a company function.

Mr. Roemer. That is a workstation as well?

Dr. Allenby. Workstations, docking stations usually, printers if they need them, fax. We second-line into the house if they need that. The furniture comes AT&T always, it seems, surplus furniture, so we provide, as a matter of policy, furniture from our surplus to teleworkers, which has already been vetted for ergonomics. I don't know that everybody has that setup, but that is what we provide.

Mr. Roemer. You said in your three recommendations, providing enabling technology. We have talked a little bit about that. Mr. Hoekstra asked you some questions about unresolved legal questions, which you said open a dialogue on. And you also mentioned develop better data. I think Ms. McKenzie referred to it as ``best practice research opportunities'' need to be shared between companies. Are you doing that, besides this kind of environment? How do your companies get together Lexis Nexis and CIGNA and AT&T and Cisco and other cutting edge companies to share not only what you are doing, but the problems that you are running into, and how to resolve some of those problems in the next ten years? As this phenomenon probably continues to grow, what problems are we going to run into?

Dr. Allenby. Well, I think there is a couple. Some of the ones have been mentioned, but they are worth focusing on. When you have jobs that require mandatory teleworking, or Virtual Office, that should be explained up front, because there are a number of individuals who are not comfortable with teleworking, or whose family situation is such that it wouldn't be appropriate. Teleworking is not a substitute for babysitting, for example, and you will drive someone into a very stressful situation if they try to make that work.

We usually have people telework two to three days a week right now, to get used to it, so that, for example, their manager gets used to evaluating productivity and not time in office. It was mentioned before, but it is worth focusing on. Time in office basically comes out of a factory. If somebody is sitting on a line, they are not productive unless they are there. This is the ``knowledge age''. They could be playing golf and having great ideas. To get managers to understand the evaluation of knowledge production instead of the evaluation of surrogates like hours in the office is very, very difficult. This is a learning process that isn't just individual, it is institutional, and it is a very long one.

Interesting that you should mention sharing. It occurs, I think, at two levels. The first is there is a number of companies that informally share their activities, and of course more formal organizations through which we work. Then there is a second level where teleworking is being recognized as a commercial opportunity. That naturally restricts sharing somewhat. Then there is a third level which is teleworking is part of the extraordinary expansion of the Internet, the Intranets, the capabilities they offer. And so you get into a broader question of what are the social and environmental impacts of the Internet as applied to working patterns, as applied to family life patterns, those kinds of issues. Those are really part and parcel of teleworking because, if you look at teleworking apart from that, you don't really get the full scope of what is happening in the economy.

Ms. Martin. I would like to address that question as well, as far as the sharing of information. Sitting in the catbird's seat that I do, with the number of requests that we get, it is not as prevalent as one might hope it would be. Certainly, large companies can share information, and there is a lot out there in books and on the Internet and so forth. But, remember, it is not a cookie cutter solution. Telework is very individualized, and the companies that have talked here this morning, they have the resources to outfit a home ergonomically correctly with the right equipment and so forth but, remember, there are so many small to mid-size companies where there is enormous growth in telework. They don't have that. For instance, with a Memorandum of Understanding, they have to understand to put that together with the manager and the teleworker, that you have an ergonomically correct place, you are not working on the kitchen table with inadequate light, and so forth. So I think there is a lot of room for improvement on sharing of information, and it is very unique for each individual company or organization.

Mr. Roemer. Do you have figures as to how this is growing in the small businesses? We have heard the figures in the bigger businesses.

Ms. Martin. It is growing very rapidly, certainly within--and we do have those figures. I don't have them with me at the moment, but in the small business arena it is very prevalent. One of the larger companies, it is a pharmaceutical company in the Midwest, and what they are doing is, they have done their pilot testing program, and they are ready to roll out a very large program. They know they are going to have to hire 10 percent more workers within the next five years. They are not going to expand their corporate headquarters to do that. And so their program will be for 100 percent virtual work, for expansion of the workforce. And they will outfit them with everything: ergonomically correct furniture, the Internet lines, all of the technology that is required. So that is a best case scenario, but in between that and the very beginning informal programs, there is a wide range.

Mr. Roemer. I have a number of other questions, but I want to yield back to Mr. Hoekstra and then follow-up after he is done.

Chairman Hoekstra. Thank you. This is absolutely fascinating as we keep delving into it because you really do throw the factory model out the window, which can lead to some great opportunities and potentially also some abuses which you hear about, because one of the positive things now, and, Dr. Allenby, I think you talked about this where it might be a shared-time employee, but by shared-time employee it means that this employee shares his time with three or four different employers, which I think at that point, under current law, would make him an independent contractor, so you don't have a lot of the legal issues involved. But on the flip side, you could actually maybe go to the other side that says we are going to look for certain employees, but to work for this small company you have got to provide your own equipment. And even though you are doing 100 percent of your work for one employer, that raises all different kind then they are not an independent contractor, and you are taking advantage. Mr. Edwards or Ms. Martin, have you didn't talk much about the legal issues or the framework issues, but is the association having a dialogue about those kinds of issues, the problems or the liability risk that employers may be running into?

Mr. Edwards. Yes, we are addressing this with our Blue Ribbon Panel system, and we are trying to put together a series of best practices. The topics that we are actually covering are organizational issues, management-employee behavior, elements of HR technology requirements, effective work environments, economic considerations, business advantages, and tax and regulatory issues. So that is coming under our Blue Ribbon Panel meetings. In fact, we have just published our Gray Paper on that, and we are going to have best practices which we are then going to lead into the formal certification for teleworkers because the way we see it, Debra was talking about having to have people in the office for six or eight months. The time is going to come when there is not going to be an office to go to for six or eight months, and you are going to be looking for people to recruit them, out in the mid-states or areas of this country, and you are not going to be able to see them. You are not going to be able to interview them, other than perhaps sending them into Kinko's to do a video-conferencing interview perhaps. So, we are looking towards that as a requirement that is developing, and we have anticipated that, and that is how we put this program into place, so that by the time we have got it in place the two converge and meet at the same time.

Ms. Martin. Legal and risk management issues are real, and they are something that has to be addressed. And as Dr. Allenby said, there needs to be more of a dialogue on that. One of the Federal agencies, Department of Labor, has put together a teleworking program, and they sat down with the unions and the management and put together a joint effort to make sure that it was equitable and so forth. But I agree, the final bottom line on risk management and legal issues is not defined.

Chairman Hoekstra. I was going to go to Mr. Vines. How did you handle those issues? Did they come up at all in your experience, and how were they handled? Did you have some kind of formal agreement?

Mr. Vines. Yes, we have a formal program.

Chairman Hoekstra. When you are talking about ``we'', was it CIGNA?

Mr. Vines. At CIGNA, we have a formal program, agreements and those types of things, that an employee would agree to in terms of sort of the arrangement and how things would occur. Because most of our employees in this particular division are technologists, we created such things as sort of a newsletter so that on our Intranet we could share best practices and stuff like that in terms of encouraging more productivity and better productivity.

I think the thing to remember about telework is that it is very dynamic, dynamic in that some of our employees want it at a particular time in their life and then that may end and they may want to come back into the workplace. So, it requires a lot of flexibility from the employee and also flexibility from the employer to be able to have that flexibility because I think telework is not necessarily a sort of permanent situation. It can be at AT&T for 10 percent of their workforce. Iin order to have that flexibility, I think you have to realize that it is going to always change. It is not necessarily a permanent situation.

Chairman Hoekstra. Mr. Roemer?

Mr. Roemer. Thank you, Mr. Chairman. Do you think that this is going to help the growth in telework arrangements? Will it help to serve in reducing the shortages of qualified high tech problem that we face? Certainly, one of the things that I get asked over and over and over again from people in the high tech community back in Indiana, but also in this area and when we visit California, is that you have almost been forced to come to some of these arrangements with the creative talent, the high tech talent. They are not going to work for you unless they get some of these benefits. Will this bee a way to address some of that shortage?

And the second question would be, because you are going to probably have to invest more money in education and training, how does the technology, long-distance education and training, and pooling some of those resources either for saleswork or for other people that are going to need some of the same kind of training and benefits and education, how does that factor in here? That is something that the Education Committee would be interested in as well. Dr. Allenby? Mr. Vines?

Mr. Vines. At CIGNA, it definitely enabled us to tap into a market that perhaps would not have worked if we did not have a telework arrangement. Folks that took a leave of absence but still wanted to continue to work after the birth of a child continue to work with us like ten hours a week and so forth. So, if we had not been agreeable to that type of arrangement, we would not have had access to that resource.

To an earlier question, we have to do this to survive. At one point in 1997, we had about 250 open positions on a base of about 3,000 technologists. So you have to be flexible and you have to be creative in terms of how to identify and locate those people.

In relation to a question regarding training and education, one of the things that we did arrange at CIGNA was the opportunity for our employees to pursue a Master's Degree in information technology, and it was completely distance learning, asynchronous. And basically what our employees would do would lock onto their laptop, receive the lecture, submit works, homework and assignments through their laptop, and they never had to go on-campus. So it raises some interesting questions also.

Mr. Roemer. Let me just interrupt you for a second. Did CIGNA help you with your Master's at American University, that was on-campus work?

Mr. Vines. That was on-campus work.

Mr. Roemer. And they helped you do that as well. It is not just becoming limited to the online education?

Mr. Vines. Right.

Mr. Roemer. I hope they would provide both. Dr. Allenby?

Dr. Allenby. Thank you. I think that what telework does is it gives individual firms comparative advantages, as compared to other firms. What it does not do is deepen the pool of technology skills within the country as a whole.

What does do that, however, is, as the idea of work changes, as work becomes more of a personally managed function rather than a company defined function, then you move into situations where you have the individual contractors who are participating in distance learning at the University of Phoenix at the same time that they are working for two or three companies. That is a completely different way of learning, and it depends on the individual recognizing that their intellectual capital is what makes them salable and undertaking the responsibility to maintain it for themselves. And there you begin to phase into things such as we see on the Net today where very competent Net people will basically sell their time over the Net in piece parts. And it works wonderfully for them.

The question that you begin to get into as you break down those kinds of barriers to work is, what happens to the 90 percent, say, that can't do that, that have trouble thinking about how to build intellectual capital, or go out and be these entrepreneurs, these knowledge entrepreneurs.

So, underneath some of this, you begin to run the risk of yet another version of haves and have-nots, that needs to be carefully thought about and managed by our society.

Mr. Roemer. I think that is one of the more interesting outcomes of the hearing, too, and I will yield back my time at this point. I know we have a vote as well on the Journal, but I hope we continue this. There seems to be a wide diversity of people that are currently making up what we call a teleworker today.

I read an article in Forbes Magazine the other day, a discussion of four CEOs, and some of the CEOs were saying that we have to do this telework. We can't get the creative talent, the technology talent, the Internet talent, if we don't do it, but then Ms. McKenzie has talked about, and Ms. Martin has talked about, companies, pharmaceutical companies and others, that are going to be hiring their entire sales force in the future, and actually mandating that they are not going to be coming to an office. You are going to save a lot of money on real estate and leasing. But they are going to need other kinds of investments, in education and training and morale and so forth. It is a fascinating area that I think gets more complicated as we see this move on into the future, and I hope the Chairman will continue to show his leadership in this area and have some followup hearings. Thank you.

Chairman Hoekstra. Thank you, Mr. Roemer. I think this is an issue that Mr. Roemer and I both have an interest in. I think this is something that we can work together on. Appreciate this panel for being here and beginning that, or actually building on the dialogue. This builds on a lot of the stuff that we got out of the American Worker project, going to a lot of the high tech companies, and you have helped educate us some more today. So, we are looking forward to working with you and other groups and other people that have an interest in this issue over the coming months. So, thank you. You have, like I said, another ten days to put anything in the record, and Mr. Roemer and I have a vote, so we will adjourn the hearing. Thank you very much. The Subcommittee will be adjourned.

[Whereupon, at 10:58 a.m., the Subcommittee was adjourned.]