View from New York: The traditional office is virtually obsolete

In the midst of what economists are politely calling a 'jobless recovery', the fact that 25 million Americans work from home seems less a revolution in corporate organisation than a recognition of hard times among the white-collar workforce. And to be sure, freelances, consultants and entrepreneurs account for most of the explosion of home-work in the United States in the past decade.

But the 1990s are also witnessing the emergence of a completely different set of 'off-site' forms of corporate employment, known by a variety of B-School buzzwords ranging from 'teleworking', 'hot- desking' and 'hotelling' to their wireless, digital, interactive, multimedia-age culmination, 'the virtual office'.

Suddenly, the number of companies and employees experimenting with these radical forms of corporate re-engineering is becoming significant: the number of people working outside a conventional office for a big US corporation has risen 40 per cent in five years. More than one in three American business travellers now carries a laptop computer and cellphone, according to one recent study - four times as many as two years ago.

Management gurus, of course, have been talking for years about computerised, paperless, remotely- accessible offices that would no longer tether people to desks and cubicles, forcing them to spend wasted hours commuting on arbitrary, nine-to-five, Monday-to-Friday schedules that make less and less sense. Office workers have long been pleading for flex-time and job- sharing and the right to do some sorts of work at home; for just as long, economists and sociologists have been predicting a resulting increase in leisure time, shorter working weeks, less traffic and air pollution, happier families and, ultimately, more productive offices.

Some of this is in fact now taking place in the American workplace, at companies ranging in size from IBM to the big six accounting firms to Madison Avenues ad agencies - employees are indeed being released from their desks, and equipped instead with portable computers and 'personal digital assistants' that keep them in touch with their records, their colleagues, their clients and superiors wherever they go. But it is happening for reasons that have little to do with job satisfaction and, to judge from Wall Street scepticism about a conference called 'Home Sweet Office' in New York last week, it is not happening quite the way the average American business person had envisaged it.

Experiments with 'virtual offices' range from the literal - Cable News Network last week showed office workers equipped with hulking virtual-reality headsets allowing them to manipulate files, office equipment and communications without leaving their seats - to office redesigns that verge on the Orwellian. But the most ubiquitous form is 'tele-commuting', which at its best allows travelling employees to communicate more effectively. At its worst, it is simply a way to make staff take their work home, obliging them via faxes, E-mail and beepers to labour far longer hours. For American executives and, increasingly, the office rank-and-file, home is less and less a refuge from work.

Then there is 'hotelling', a system that employs an office 'concierge' who assigns employees the appropriate workspace for whatever task they are performing that day - but, in the process, strips them of their own fixed desks and offices. At the Arthur Andersen consulting firm, which pioneered the 'hot-desking' concept, each carrel can be 'personalised' hour- by-hour: a name-plate hung outside, telephone calls rerouted, files wheeled out from wall storage units. Staff 'live out of two briefcases - one containing work, and the other containing the things which personalise their desk', according to one industrial designer.

'Conventional offices are archaic,' argues Jay Chiat, the American advertising man whose agency has gone farther than any other business in 'virtualising' the workplace. Offices, he says, 'tend to become repositories for bad golf trophies'. Chiat/Day's Los Angeles headquarters has been redesigned along the lines of an American college campus, complete with common rooms, library, bars and gyms, but with no dormitory; family photos and other objects that once staked out an employee's desk top are now confined to lockers at the concierge's desk or to the back seat of the car they work from. 'Work,' Mr Chiat reminds us, 'is no longer a place but a process.'

If the virtual office is now becoming a reality, it is for good business reasons. The most apparent is that the technology that makes it possible has finally arrived. Fax, voice-mail and laptop lounges at American airports are giving way to the integrated digitised office, like that announced this summer by Microsoft and 40 office equipment manufacturers; personalised telephone numbers that will track down a subscriber anywhere in the world; and wireless data networks, like the one the US Federal Communications Commission recently granted to the Mtel paging service.

The virtual office is also riding the crest of a number of social and business trends. The office as we know it is the product of Taylorism, the 1920s management theory that saw it as the complement of Henry Ford's mass-production assembly line. In the current era of Japanese-inspired 'custom production', the byword is flexibility, meaning 're-engineering' the workplace with more part-time employees, consultants and contractors. With big US corporations continuing to shed full-time staff, economists are speaking about a 'virtual workforce'; Manpower Inc, the temporary employment agency, recently became America's biggest private employer.

But ultimately, virtualising a company often comes down to a very basic management consideration: cutting down on office rent. Some companies have found that 30 to 40 per cent of desks are vacant at any one time, and that creating 'non-territorial' office - at a cost of dollars 3,500 to dollars 4,500 per employee - can reduce their property requirements by 25 to 50 per cent. Sceptics note that even the bold experiment at Chiat/Day coincides with the agency's loss of two accounts worth dollars 170m a year in billings.

Where cynical motives are not behind 'virtualising' there are other challenges for employees, the problem of 'officelessness' being only one of them. Conflicts are emerging, for example, between growing numbers of so-called 'mobiles' and HQ-bound 'teamers'. Then there is the issue one report identifies as the search for the 'virtual water cooler' - some hi-tech, low-rent replacement for the office social life so many homeworkers miss.

Ultimately, the hardest thing for people to overcome will be the horrible new personal responsibility that comes with no longer being arbitrarily obliged to sit in one place by a supervisor. When employees decide themselves where they should be and what they should be doing, a whole range of work-related excuses disappear. As Mr Chiat puts it: 'If you have no reason to show up, there's no reason to be here; if you have a reason to show up, you'd better be here.'

The virtual office, then, is one you never leave, as one expert explained it. 'An office that can be anywhere is one thing. One that is everywhere is quite another story.'