Major Shift in Home Working Puts More Emphasis on Full Time, Less on Part-Time Businesses, Says New Research From IDC

FRAMINGHAM, MA – MARCH 19, 2002 – In the wake of a slowing economy and a much tighter job market, home working has been undergoing major sea change. New research from IDC has found continued growth in full time home working even as part time home working declines.

 

In contrast to more than 15 years of holding their own or growing, households with home-based businesses actually declined in number during 2001 – the first time such a decline has ever occurred. Although the number of households with full-time home-based businesses continued to grow, the number of those with part-time home businesses dropped significantly, a trend that IDC expects to continue.

According to Raymond Boggs, IDC vice president for Small Business/Home Office research, 2001 represented a watershed year for home working. "The dynamics of home office growth have shifted, both for those running a business at home and for corporate home workers. The pressure on part-time home offices to perform has been significant, and more corporate home workers are returning to traditional work practices, even as colleagues are starting to work at home for the first time."

Three key factors influencing the ebb and flow of home office activity:

Pressure on part-time home offices to perform. Faced with a variety of economic challenges, households find it more difficult to support the casual, part-time home-based business. When one adult was working traditionally and another started a home-based business part-time, this was not a problem. With the threat of layoffs and lower income (as well as loss of benefits), more part-time home offices are moving to full-time status, or are ceasing operation. Home office as hobby is now a thing of the past.

Greater churn among corporate home workers, especially telecommuters. Telecommuting has emerged as one step on a career path, not a final destination. As professionals advance in an organization, the telecommuting stage is often cut short. For those in firms considering staff reductions, the need to "see and be seen" regularly at corporate headquarters can be especially compelling.

Availability of new technology. The number of new home offices continues to grow even as other home workers return to traditional work styles. Helping drive new home office activity, both corporate home working and home business startup, is a growing array of advanced technology products and services. Internet-based capabilities are increasingly important, allowing home-based businesses to attract new customers efficiently, and helping corporate home workers maintain access to company resources via secure Internet connections, including virtual private networks (VPNs).

U.S. Home Office Households at Year End 1999-2002

1999 2000 2001 2002 Annual Growth

Total home office

households (M) 33.7 33.9 34.1 34.3 0.6%

Total Income-Generating

Home Offices 14.5 14.5 14.2 14.3 -0.5%

Primary 9.0 9.3 9.4 9.6 2.0%

Part Time 5.6 5.3 4.9 4.7 -5.4%

Total corporate home offices 23.4 23.8 24.1 25.1 2.4%

Source IDC, 2002

Complete details on home office growth can be found in IDC's report U.S. Home Office Forecast 2001-2006: A Changing Market for Changing Times (IDC

#W26728). The report examines the changing number of different home office households and tracks the shipment and use of advanced technology products and services including PCs, printers, home networks, the Internet, home pages, and cell phones.

For more information, contact Jim Nagle at 1-800-343-4952 extension 4549 or at jnagle@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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