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Originally published Sunday, January 7, 2007 at 12:00 AM

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Job Market

Companies go virtual, set workers up at home

Karen Frederick used to drop her children off at day care at 6 a.m., drive about 50 miles south into the Twin Cities to work, and then hope...

McClatchy Newspapers

MINNEAPOLIS — Karen Frederick used to drop her children off at day care at 6 a.m., drive about 50 miles south into the Twin Cities to work, and then hope to be home again around 5 p.m.

Now 6 a.m. has Frederick making a "two-second" commute to her basement office and taking a break at about 7:30 to get Tanner, 7, and Cody, 5, off to the school bus. Then it's back to work until about 4:30 p.m., when the bus brings her boys back home.

Frederick is a claims specialist for Midwest Family Mutual Insurance Co. in Plymouth, Minn., which transformed itself over the summer into a virtual company.

The 50-plus men and women workers now do their billing, underwriting and policy reviews on computers and phones in ergonomically correct workstations in their homes, all provided by the company.

"The more we talked about it, the more we said, 'Well, why not?' " President Ron Boyd said.

Estimates on the extent of telecommuting are all over the place, said Jane Anderson, director of the Midwest Institute for Telecommuting Education, a Minneapolis consulting firm. Recent estimates range from 3 million to 18 million Americans — partly because definitions range from telecommuting one day a month to three days a week.

Among the fastest-growing varieties is what's being called "agile work" — the random work that gets done sometimes at home and sometimes on cellphones and BlackBerries anywhere — said Anderson, who is in the midst of a telework study with the University of Minnesota Hubert Humphrey Institute.

The other fast grower is the Midwest Family Mutual model, she said — the full-scale, off-site migration of workers.

That approach takes the most preparation, because it involves new policies, technologies and productivity measures — a whole culture change, she said.

Midwest Family Mutual, a property and casualty company with $61 million in annual revenue, spent 2002 to 2004 becoming a paperless company, Boyd said.

All mail and other documents are scanned into computer files accessible by all employees.

The scanned documents mean instant sharing and no more lost folders, Boyd said.

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More technology added computer and voice connections to systems outside the office. The company finished its virtual preparations early this year. Boyd put his company's 24,000-square-foot building up for sale, and now leases space one-fifth that large in Plymouth for a few offices, a boardroom, a computer-training center and 24 cubicles anyone can use if they want or need to come into the office sometime. He calls it the "motel" approach.

Everyone signed "work from home agreements" so they were clear on the terms: The equipment provided by the company is the property of the company; working at home is not a substitute for child care, and phone calls to agents and clients must remain professional, which means no dogs barking or birds chirping in the background. All the work is electronically trackable.

Then last spring the company got its remote employees set up in their homes — when gas was around $3 a gallon.

The changeover was not cheap. Boyd estimates he spent roughly $1 million on all the new technology. But he estimates about a 10 to 15 percent increase in efficiency already.

"I can tell you that I work hard, because I want to make sure this arrangement works," Frederick said. "I'm a mother and a wife. To be here mornings and after school, it's huge. And it's reassuring to my husband to know I'm not driving in horrible traffic or bad weather."

Telework can be a potentially good option for people with disabilities or injuries.

As part of her project with the Hubert Humphrey Institute, Anderson said she's particularly focused on veterans returning from violent places in the world, including Iraq. She aims to place 40 people from those populations in online jobs.

"What we're seeing is transportation to and from work is not the issue," she said. "It's the fatigue and stamina issues that come into play, because these people can't work eight hours straight."

Boyd sees another advantage for the insurance company. His hiring pool just expanded from about a 30-mile radius around the office to the company's entire seven-state region.

And he plans to add "embedded" agents as he hires — figuring it has to be good for customer service when his employees root for the same college teams and hear the same weather forecasts as the agents do.

In fact, he just hired Terri Holtquist, who lives on a dairy farm with her husband and three children near Milbank, S.D., to work with independent sales agents in the Dakotas.

The company has set her up in an office in Milbank, because she doesn't have high-speed Internet access at home. Holtquist, an insurance underwriter, said it's a fast, 10-mile drive.

Otherwise, there aren't many job possibilities for her in rural South Dakota, she said.

"Being able to do this work in a remote setting is what interested me," she said. "Opportunities are rare out here, especially for a woman in a professional position."

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