Virtual office trumps layoffs
When it came time for Renee Lunchana to make the tough decision on whether to lay off employees ”“ she dumped her Stamford landlord instead.
Lunchana”™s company CD Mastercopy went virtual earlier this year, letting the lease expire on its Stamford office and dispersing its employees to home offices across the area.
Upfront, the company”™s savings have amounted to $60,000, Lunchana estimates ”“ not a huge amount, but one that could keep the company profitable this year nevertheless.
Lunchana traces the business”™ history to her studies at the University of Hartford, but following graduation in 2000 she elected to take a full-time job with Ford Motor Co., working on an information-technology project management team in Michigan. She already knew the auto business well ”“ her father was a longtime employee of Chrysler.
After a few years, Lunchana decided to move back to Connecticut to give her full time to developing CD Mastercopy. After focusing on the commercial market for discs distributed at trade shows, she saw her business take off.
The CD and DVD duplication industry is dominated by Pennsauken, N.J.-based Disc Makers, which employs 400 people.
By comparison, CD Mastercopy has nine employees and had $700,000 in revenue last year, and Lunchana expects to turn a profit this year even as her company adjusts to going virtual. The company”™s clients have included Norwalk-based Xerox Corp. and Royal Bank of Scotland PLC, which is relocating regional operations into a large Stamford office building.
After spending five years in Stamford on Summer Street and Church Street, Lunchana said she elected not to renew a commercial lease, as typical client orders plunged from thousands of discs to hundreds.Â
“Last year we were still doing OK, but it seemed like we were spending a lot,” Lunchana said. “It basically came down to cutting jobs or keep the employees and work with them to find another way.
“Right now the phones would be going nuts for tradeshows, but we haven”™t seen that this spring,” she said. “What has saved us is our business in Canada and the U.K.”
Lunchana said that from a technical perspective, going virtual turned out to be easier than she expected, in part because the company already maintained its own computer network and telephone exchange using voice-over-Internet-protocol.
The company upgraded its Web site in order to provide current and potential clients as much information as possible, hoping to cut telephone traffic. For client meetings, she uses an executive office suite rental company in Stamford.
She credits the Timothy Ferris book “The 4-Hour Workweek” with helping her envision how a virtual office could be administered.
“The biggest hurdle was everyone getting comfortable with the idea of working at home,” said Lunchana, who lives in Stratford. “Not everyone can be disciplined enough to do this ”¦ As long as the work gets done, I”™m happy.”
Lunchana”™s finance chief was perhaps the happiest of all ”“ the decision saved him a daily commute from New Haven.
According to Stamford-based Gartner Inc., there is still resistance in the corporate world toward the virtual office concept, despite advances in teleconferencing technology and Internet-based document and work processes.
“Most enterprises don”™t have a formal plan for virtual-office environments and usually support the concept on an ad hoc basis, mostly at (managerial) discretion,” said Andrew Walker, research director for Gartner CIO Research Group, in a statement following a Gartner report on the topic issued last year. “Such informal arrangements don”™t realize the advantages of recruitment branding and a well-planned transition. A more formal approach demonstrates to new recruits that the enterprise is willing to make a long-term commitment to work-life balance, which is key to employee satisfaction and retention.”
Walker advises companies considering a virtual office to test the concept first with a small group of employees, analyzing savings and productivity before attempting to roll it out on a broader basis.
Even after the economy regains steam, Lunchana is doubtful she will sign a new commercial office lease, preferring the current arrangement and agreeing with Walker of the recruiting potential it offers.
“If it works out nicely,” Lunchana said, “I would like to keep doing this.”