The Ongoing Truth About Telecommuting and Work From Home Jobs

I was referred a few days ago to the Utah Rural Online Initiative, and this editorial is a combination of a generalized overview of the current status of telecommuting and working from home, and a discouraged commentary on the uselessness of the U-ROI.

If you are here for the info in the title of this article, please bear with me. It IS here. I’ve written this though, to help people save time and understand that government intiatives fail in this area because they never isolate the REAL problems with working from home. They NEVER have people with experience working from home full time in the idea pool, and they NEVER try to teach what IS a real work from home JOB, and what is a SCAM, and they simply BELIEVE every single job title that suggests telecommuting, but they do not READ the job posting to see that it is NOT what they think it is.

 

Anyway… To the story…

I’m always a bit skeptical when a government entity sets out to solve a problem. Usually they approach it from the rear, try to bridle the back legs and tail, and then get into the saddle with the reigns facing forward and try to ride the beast with no way to direct the head. This attitude of mine proves founded so many times that I will not excuse myself for the sarcasm that it usually smears across my commentary.

The House Bill that appropriated the funds and stipulated the goals sounded reasonable.

Utah youth move away from rural areas. No jobs. We know this.

 

New residents (except retirees) stay away from rural areas. No jobs. We know this.

 

Existing residents move out of rural areas to find upward career growth. No jobs, no advancement. We know this.

 

Populations in rural areas are declining, except for seniors. Jobs are a factor. We know this.

So in an effort to resolve this, the legislature was persuaded that telecommuting, or freelancing was a good solution.

Now, we must first understand (as they did not), that telecommuting and freelancing are two VERY DIFFERENT THINGS!

Telecommuting, or Work from Home JOBS are jobs that are paid by an employer, sometimes with benefits, and which involve regular hours and steady employment.

 

Freelancing is just self-employment. Yep. You own your own business, you hustle your work from a collection of clients, you work as a subcontractor, and you do your own taxes. No benefits.

This difference is VERY CAREFULLY AND DELIBERATELY cloaked on all of the U-ROI descriptions.

Because people want a JOB.

 

They do NOT WANT A BUSINESS, it is TOO MUCH WORK!

There is some noise in the original HB that funding is also being provided for businesses that are willing to expand with remote workers. (Apparently they have been unable to find any, because there is NO EVIDENCE of this goal in any of the resulting program pages.)

The resulting program provides training for workers. That is all. Just a training program, and NOT for employers.

To make it sound impressive, they made it a CERTIFICATION program.

It is administered by Utah State University. It is clear they have a TOTAL disconnect between the program they are presenting, and the ACTUAL NEED of workers in the state.

The training consists of learning team cooperation, video conferencing, project management software, and time tracking. They do take a swipe at a few other useless modules also.

If you are telecommuting, the training is COMPLETELY USELESS.

 

If you are freelancing, the training is BEYOND USELESS, and doesn’t even come CLOSE to approaching the training you REALLY need.

There is NOTHING for a business that WANTS to allow employees to work from home, and there IS a solution that would open doors for about 1/3 of businseses to allow that in some respect.

 

All of it demonstrates clearly that they have NO IDEA what the jobs are that are ACTUALLY available, or WHY more are not showing up.

The telecommuting world, as a whole, has NOT MOVED FORWARD AT ALL within the last TEN YEARS. Technology has done its utmost, and we are stagnated.

Yet somehow these people think this mostly failed concept is the new doorway to an old problem.

It COULD be PART of a solution. But not unless we acknowledge the current state of affairs.

This is what “telecommuting” is now, and what it has been since its inception:

  1.  The old “envelope stuffing” scam, and all kinds of variations on it. We must acknowledge first and foremost that the phrase “telecommuting” or “work from home” is one of the top scam phrases in the world. And most of what you find under it is outright scam, or something OTHER than what it is presenting to be.
  2. “Outbound leads acquisition”. This is telephone sales, people. Cold calling. And it is so brutal that nobody stays at it long. You spend all day trying to get just ONE PERSON to not hang up on you. And you get paid $2 for a confirmed sale. You can’t make money at this. NOBODY PAYS HOURLY on this!
  3. “Inbound sales”. This MIGHT be calls coming from ads. It might. But if it is, you are in an office, on-site. If you are HOME, it is computerized call transfers. Same thing as cold calling, only you get it partially pre-screened. You can’t make money at this either. It is still $2 per sale.
  4. “Technical Support, Phone or Chat”. Now this is REAL WORK, and it pays HOURLY. But you don’t get to do this unless you are a TOP customer service rep, or TOP TECH. This means you have had 2-4 years ALREADY on-site with the same employer. It is NEVER every day. It is only a few days a week, and usually half days or less. The rest you do IN THE OFFICE. We do NOT HAVE call centers with all the workers in their homes. Supervising them is a nightmare, and completely impractical, and the limited ability they have to do so is inadequate.
  5. All other out of office jobs. This is a wide range. You may be doing graphics, coding, writing, client meetings, outside sales, deliveries, setups, troubleshooting, consulting on-site for the client, and many other jobs.  These generally pay hourly, and ALL OF THEM can usually be done as a freelancer (your own business, as a subcontractor). They NEVER hire someone to do these jobs outside the office unless they have a proven record INSIDE the office (except delivery and worksite-call jobs, and those are NOT work at home jobs). ALL of these may be listed as “telecommuting jobs”. You spend 3-5 years IN THE OFFICE before you get to even take work home and still get paid for it. These are also NOT a job you can work from a rural area, when the company is in a city, because you have to REPORT IN PERSON for a couple of days each week at least, or you pick up at the beginning of the day, and report at the end of day. They require that you LIVE  in the city WHERE YOU WORK.

So, we now understand that either the job is a BAD ONE, or that it requires that you live in the same city as the job does.

And this is why the training is useless.

NONE OF THESE benefit from the training.

 

Either you learn what the U-ROI course teaches ON THE JOB, or you do not NEED it.

They teach three pieces of software, and none of them are industry standards for telecommuting, they are just used to facilitate the training. Software you need for the job is something different, though project management and video conferencing are sometimes used, the ones taught are NOT commonly used.

So what was really needed?

Training for EMPLOYERS, to open the door for REAL working at home. This means both an increase in remote work at home opportunities, and an increase in the use of subcontractors. And the training that is needed is NOT anything like the University is offering, it only needs ONE training module (yeah, I’ve got it, hold your horses… that means the HEAD, not the REAR).

 

Training for WORKERS, to learn to run their own business as a subcontractor. Unfortunately this is fairly extensive training, and the University is TOTALLY unqualified to teach it since they have NO IDEA what is actually involved in making money from a small business (they can only scale down corporate business training, and this is ALL WRONG for a small business) Any other training is useless, since if you are qualified to work in the office, you are qualified to work at home.

The real problem with telecommuting, and the reason that it has not expanded is obvious to every employer who tries it.

You cannot monitor the productivity of your workers.

This is a MASSIVE Problem!  It stops you cold with pretty much every worker that you DO NOT TRUST, and that you cannot see, from work turned in, productivity in your absence.

This is a VALID concern!

So we need to acknowledge three significant truths:

  1. Employees hate to work, and we are in the middle of the biggest employee laziness crisis that the world has ever seen. If you don’t SEE the work, it ISN’T happening, and your business DIES. This is REAL.
  2. If you pay someone by the hour and they are not in your presence, you need to understand average productivity per hour, and know whether EVERY EMPLOYEE is producing at least an average amount of work. (Me, I go for higher standards than that.)
  3. There are only certain kinds of work that can be monitored remotely.

Those that can be remotely monitored through technology (and we’ve tapped that).

Those that can be monitored remotely through work turned in (documentation of work done but not visible is a time waster, so don’t even go there…. oh…. you already did… I’m sorry you are losing your shirt). So the expansion potential for home based work is in WORK TURNED IN.

So what is the real solution?

Flat rate pricing. Also known as Piecework.

This works for Subcontractors, and for standard Employment. With benefits if you wish (determined by work output rather than total hours).

For an Entrepreneur, hourly rates are a trap. If they convert to flat rate pricing, they break the income ceiling, and open up a window for unlimited income growth. This article explains.

For a business owner, paying flat rates to subcontractors or remote employees (or even employees on-site) allows them to pay every employee according to ACTUAL productivity.

Yes, there are problems. But they are solvable.

  1. Tracking production. This works best if you have only one person per task or sets of tasks (or per station). YOU have to be able to verify counts. This makes some types of work suitable, some types less so.
  2. Employee theft. If you have a chaotic shop or office, employees WILL steal each other’s work. Off-site employment pretty much stops that, but separating stations and tasks does this also.
  3. Motivation. If you work your numbers right, a new worker will make LESS than they want to make. As they speed up (watch for quality issues as they do), they’ll realize that they make as much as they work to make, and they’ll get more efficient, and quickly learn to make MORE than they could have by the hour. This is GOOD for the employer, because he only pays for what is produced anyway, and the faster the workers produce, the less the employer pays for in shared overhead per output.
  4. Pricing… This takes experience. Some things run on an average, so sometimes it takes less time, sometimes more, but averages out to a reasonable pay scale.
  5. Lazy workers. Ok, so I said this. But if you pay flat rate, every new worker will complain about low wages, because they haven’t learned that they EARN based on EXPERIENCE, and SPEED. It takes them WEEKS to really grasp that every time they are disappointed in their paycheck they can look at their work and find a way to speed it up.

Implementation of flat rate pricing is simpler than it seems, but does take some judgment calls in the beginning, and then adjustments to the reality. We often see the ideal, or the worst case as being the “norm”, and base our pricing on that, and over a repetition of 20-100 times, we can get a good average production time for a specific task, and come up with a fair price for it.

You start with a generous hourly rate basis. You do NOT start with minimum wage!

Start with a well paid, productive worker. Let’s say somewhere between average and top producer, with the same hourly pay scale.

 

In-office that might mean anywhere between $12 and $35 per hour, depending on industry (though many go higher).

For a subcontractor (they own their own business), you must increase it by 50-100%, depending on industry, overhead, etc. Remember, you SAVE that money in your office, so a subcontractor is WORTH that much more. THEY set their rate, but YOU negotiate, and you have to be able to calculate what it is worth compared to hiring it in-office in many instances.

Next, observe the output for that productive worker. For our offices, that is me. I want to be generous here also, so I don’t calculate my top production rate, I calculate it when I am skilled and have learned one or two rounds of speed increase.

So if I am working comfortably (not pushing it) I can make 20 valves per pour. It takes me 15 minutes to do 1 pour. That’s 80 valves per hour.

 

I can unmold, trim, and cut,  about the same rate per hour comfortably. This is still not pushing it.

 

So I can produce 80 valves in two hours. And this is NOT at my top speed.

 

I pay 50 cents per valve, finished to quality standard.

 

I have calculated my other expenses for the product, and can AFFORD to pay 50 cents per.

 

A competent worker can earn at $20 per hour, once they learn to do the tasks. They will START OUT earning much less. Probably half to begin with, until they are familiar with it.

 

A FAST worker can earn twice as much. A worker who pays attention to detail in the pour, will trim less, and can increase their speed again.

 

Ideally, you want top workers who are innovative enough to be earning $50 per hour or more as subcontractors, or $20 per hour or more as employees, in a similar situation. Many industries would need to have a MUCH HIGHER earning potential.

If your hourly rate basis is fair (this consists of the pay that an average GOOD SKILLED worker would make per hour at the flat rate you pay), and if your employees or subcontractors get the idea of increasing speed without compromising quality, and if you pay attention and start teaching productivity skills, you, as an employer, can reduce your payroll waste, and improve your production.

Yes, I’ve done this with services. It works.

Flat rate piecework pay models are probably the number one overlooked business tactic today, and they are the single most liberating tactic for small businesses to increase pay potential, as well as being a means where many businesses can hire more remote workers.

I’m really disappointed to have to be so negative about a program which has at the root a real possibility for growth. But the way they are doing it is not going to change anything, because they didn’t isolate the problem before throwing a canned solution at it.

The U-ROI doesn’t accomplish anything meaningful in bringing more rural employment. Conversely, all it did is assure a few more jobs on the USU campus. But that may have been their real goal all along anyway.

Yes, our company DOES offer consulting for both small and large businesses for flat rate pricing, subcontracting success, and small business startup and profitability.

And unfortunately, we are NOT hiring in rural areas.

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