Home Free: The Advantages of Home-Based Sales Reps
According to the United States Census Bureau, “In 2010, 13.4 million people worked at least one day at home per week an increase of over 4 million people (35 percent) in the last decade.” But many employers are still resistant to having sales reps based at home, despite obvious benefits and cost-savings.
“Many sales people spend most of their time on the road,” says Michael Carrillo, president of CPGjobs. “Having them based at home — instead of the home office — is such a no-brainer I’m surprised more employers don’t do it.”
Among the pluses of hiring home-based sales people cited by Carrillo: Elimination of relocation costs, reduced office expense, improved recruitment and retention, reduced commuting time and greater productivity.
“When sales representatives are based from home, they still report to headquarters,” Carrillo observes. “They simply add the headquarters office to their road schedule. The additional travel costs are minimal,” he says, “and are more than recouped by reduced office overhead.”
Then there’s the added benefit of eliminating relocation costs. According to a 2014 study by the Employee Relocation Council, the average cost to relocate a newly hired homeowner was $71,952. That cost us up over 50% since their 1996 study!
So why is there resistance to eliminating expensive company offices for employees who rarely use them anyway? “Force of habit is the best explanation,” says Carrillo. “And it’s also the poorest excuse.”
“Let’s say you have an average office expense of $35,000 per year for each company employee,” says Carrillo. “That includes real estate, phones, utilities, maintenance, tech support, insurance and all the rest. By basing even ten employees from home instead of headquarters you can save hundreds of thousands of dollars per year,” Carrillo says. And companies can save still further by reducing the need for satellite offices.
In addition, employers who hire home-based employees have the advantage of reaching outside their home city to recruit sales people closer to their territories. “It makes no business sense for someone based in Connecticut to call on the Midwest,” says Carrillo.
“It makes better sense for that sales rep to live in the Midwest and visit Connecticut.” But what about the time that is spent working from home – aren’t telecommuters less available, more distracted and less efficient than colleagues working on company property? Not according to companies that have researched the differences.
One study by Motorola reported by CFO Magazine showed that home-based employees were 12 percent more productive than those based in company offices. The study measured actual work produced, such as lines of code written or number of pages edited.
The physical isolation of home-based employees may be the very reason they’re more productive, according to Carrillo. “Think of all the time employees in your average corporate office spend attending long meetings and socializing,” he says. “While some of this is time well spent, much of it is wasted.”
Home-based employees also spend less time commuting to and from work, Carrillo notes. According to the U.S. Census Bureau, the average worker in New York City spends 384 minutes a week traveling to and from work. “That’s time and energy that can be better spent talking to clients,” Carrillo notes.
According to the U.S. Census Bureau, telecommuting increased from 7.8 percent to 9.5 percent of all workers between 2005 and 2010, an increase of more than 2 million workers. The American Community Survey says 5.8 million worked most of their week at home in 2010, up 1.6 million since 2000. No one knows this better than sales reps – “road warriors” already accustomed to taking their work with them wherever they go. “Sales reps are the perfect candidates for home basing,” says Carrillo. “After all, they are already out of the office most of the time anyway.”
Carrillo says that companies that have hired home-based sales reps have been pleased with the results. “Competitive pressures demand leaner headquarters, lower overhead and fewer satellite offices,” Carrillo says. “Hiring home-based sales people is one way to accomplish all these goals – and a lot of smart companies are already making the transition.”
Michael Carrillo is president of CPGjobs, the CPG industry’s leading candidate recruiting service for HR professionals and employers. You may contact him at Michael@CPGjobs.com or call (626) 535-0143.