At the height of the dotcom frenzy, like many entrepreneurs, I was out on the fund-raising trail. I raised millions to build our company, VIPdesk, the first Web-based concierge service. VIPdesk provides concierge and virtual call center services to over 20 million customers via toll-free numbers, the Web, and e-mail. We are retained by national brand leaders such asMasterCard and OnStar to provide our service as a value-added loyalty benefit. Needless to say, quality standards, technology, and staffing requirements are rigorous and critical.

Faced with the never-ending dilemma of recruiting high caliber employees, we made a radical decision to use large portion our funding to do something very different than our competitors: build a virtual or home-based agent call center.

We were considered a pioneer at the time. Many of our clients found the idea of a home-based workforce intriguing but were skeptical of this groundbreaking method for delivering a high-end service. How would we control quality? Would we be able to effectively manage the team remotely? Our competitors with their 100-plus seat traditional call centers routinely pointed to our innovative service delivery model as questionable.

The answers to these questions -- and our competitors' claims -- came in the results.

The advantages to employing a home-based workforce

While working with home-based employees certainly has its challenges, the myriad benefits it's presented our company, clients, and their customers clearly mark a competitive advantage for us in our industry. Among the benefits:

Access to an unlimited labor pool. We are no longer restricted to our local labor market. Imagine tapping the potential of national recruiting pool! We now have at least 200 applicants for every single position. The majority of our applicants come to us through referrals of existing team members. We also supplement the referrals through national job postings on Monster, teleworking and call center websites and Craig's List.

This leads us to what we believe is the greatest benefit of a home-based workforce.

Ability to hire high caliber employees. One of the obvious outcomes of an expanded labor pool is the ability to consistently recruit a higher caliber employee. You have your pick of a nation-wide talent base. This works for all levels of team members. We have hourly paid concierges and executives who work from home. Our Concierge and Customer Care reps demographics speak for themselves:

VIPdesk Call Center:
95% have some college education
50% with an undergraduate degree
5% with graduate degrees
20% with travel industry experience
20% with hotel industry experience
55% with customer service experience

Dramatic increase in employee retention rates. Once again, the numbers speak for themselves. VIPdesk has a 76% retention rate vs. 15-25% in traditional call center environments. And among our corporate staff, we realize similar increases. Team members are drawn to the flexibility, lack of a commute, and the work/life balance home-based work offers.

Reduction in operational costs. Some of the cost savings are obvious – reduction in facilities costs, no relocation expenses, etc. The real savings come from decreased attrition and recruiting costs.

Ability to tap local expertise. For a concierge service, leveraging local knowledge is invaluable. For many other companies, having customer service and sales reps with knowledge of the local culture, market, and access, can give you a leg up on the competition.

Faster response time to unanticipated volume spikes. For those companies who have customer service reps and/or seasonality in your business, a home-based workforce better facilitates rapid reaction to anticipated volume spikes. With a few phone calls, additional team members are brought online vs. employees having travel to the office and find available space.

Better redundancy and business continuity. For those of us who work with Fortune 500 clients, provide mission critical services, and/or need for premium customer experience, a home-based workforce allows for greatly enhanced redundancy/disaster recovery. From a simple power outage to catastrophic event, a home-based workforce in multiple locations ensures operation.

The challenges of employee home-based workers, and how to avoid them

While building a home-based workforce has been a resounding success for us, there are a few hurdles to overcome to make it work. Here are a few of the areas you'll want to extra diligent in to ensure your home-based worker strategy is a success.

Make sure the position fits. Evaluate whether the position and its related activities are conducive to a home-office environment. Call center, customer service, sales reps, account managers, and "satellite" office staff are especially good fits. Accounting, technical and some executive positions pose a greater challenge for home-based set-ups as the team members' ability to be hands-on is hampered by their remote location.

To determine whether a particular staff position can operate from a home environment, consider the following:

• Can the primary functions of the position be accomplished via computer, e-mail, and telephone?
• Can meetings with the team member be effectively conducted via conference calls?
• Can you manage and monitor the workflow of this position remotely?

Plan for "over communication." One of the most significant challenges of maintaining a home-based workforce is instilling a sense of belonging between remote workers and the company. It is critical that you facilitate multiple opportunities for connecting with fellow team members.

VIPdesk's intranet, frequent conference calls, and webinars are essential to fostering our team feel. In addition, executive team members make of point of visiting home-based team members when on business travel, and we hold an annual Service Summit and Staff Party to provide an opportunity for face-to-face interaction.

Screen for success. As we have found, working from home is not for everyone. Some employees struggled with feelings of isolation and self-managing their work. It is vital to develop additional screening processes to identify candidates who will be successful in this environment. At VIPdesk, we have developed tailored questionnaires and personality and aptitude testing to select candidates who have greatest potential to be effective.

Employ the right tools. Compensating for the lack of physical management presence seemed like a daunting challenge at first. However, we found that there are many tools and processes that have enabled us to manage our remote team. Web-based workflow monitoring tools, frequent reporting, random audits, and quality assurance systems allow our managers to keep track of team members' performance with the same effectiveness as walking down the hall. One specific tool we use is the recording of all phone calls. Each week, managers listed to a random selection of Concierge team members' calls and complete a Quality Score Card. The system is automated and generates e-mails with quality results that are sent to home-based team members, providing instantaneous feedback and the ability for managers to effectively monitor quality.

The many unique challenges we faced while building and managing a large national home-based workforce are minimal in comparison to the enormous gains we have realized. From increased retention and lower costs, to an expanded recruiting pool and most important, delighted clients, our home-based workforce has become an integral part of our company's success.