Yahoo says face-to-face interaction among employees fosters a more collaborative culture.

But by rejecting the ability to work from home, Yahoo may also be losing some of the benefits that are enabled by its own technology.

The debate over whether flexible working arrangements lead to greater productivity or inhibit innovation has been rumbling away for years.

Bevis England from Telework New Zealand says there are risks in allowing employees to work remotely, and good management and support is needed to get the potential benefits.

"You need clear performance objectives. Try not to change more than you have to, so what works in a traditional office can continue when that person is working remotely," says England, who has been helping organisations make the shift for more than two decades.

"Managers have problems with it because they frequently have outdated management styles that rely on personal contact. They judge by the time clock, not by the outcomes."

Employees can also have problems because they feel left out of the loop.

Sometimes the home environment is not ideal.

"The latter can be solved with clearer training by the company. Teleworking staff should have complete access to the help desk and any technical support that exists," he says.

The isolation aspect should be actively addressed by management, perhaps by building up the social club, and by ensuring meetings are well scheduled so better use can be made of a person's time when they are in the office.

England says a distinction probably needed to be made between full time teleworking and working from home one or three days a week.

"It may be in that situation that the office becomes a social hub. Good managers make sure they touch base with staff before they go off and when they return. It is much harder to maintain personal contact with people who are fully remote."

That said, he has also come across someone who manages a large team in her firm's Sydney office from her Auckland home.

"She says she is in better contact with team members through Skype etc than they are with each other or with other employees, because the office is spread across six floors of a tower."

England has been working from home since 1989.

"From my home office I could watch the smog drifting north from Auckland, and I thought there had to be better way. I also came to realise I was more productive and effective than most other people in similar fields."

On an organisational level, there are some big drivers, although England is cautious of over-hyping telework.

"People expect the moon, which doesn't happen. In most organisations a properly set up telework programme should deliver $200,000 to $300,000 a year net benefit per 100 employees."

If flexibility means keeping staff who might otherwise leave, that could be significant, as are potential space savings.

In the United Kingdom, major corporates like Microsoft, Transport for London and Nokia have formed the Anywhere Working consortium to encourage flexible working.

Microsoft UK public sector manager Nicola Hodson says the company saved US$212 million the first year it implemented flexible working.

Wakefield council has reduced office space by 44 per cent since introducing a work smart programme and cut absenteeism by giving staff more flexibility.

Communications firm 02 experimented with flexible working in the lead up to the London Olympics in anticipation of traffic disruption, and since then has changed the way it operates.

England says crises, whether physical or financial, are often not the ideal times to shift to flexible working.

"If it's done at a time of chaos it's not set up right and no one trains for it.

"People need to have telework or flexible work as part of their business contingency planning.

"The continuity of business operations is critical, so if you don't have a work from home option you should put one in place and trial it so you can see that the technology works and that management understands it.

"It's like an evacuation plan because the next fuel price hike or public transport disaster could affect your business," he says.

Becky Lloyd the general manager of business marketing at Vodafone New Zealand, says giving employees flexibility and choice increases their engagement.

At least half her team would spend some time working away from the firm's offices.

"We have policies and processes that support teleworking and give them technology and tools to do what they want to do," she says.

"It's not every employee's right but it is a conversation for employees and managers to have about what is most effective," Lloyd says.

By the nature of the business some people will naturally be working off-site or remotely, or might stay home because their work requires concentration or analysis. Trust is required.

"The way we work with staff focuses on outcomes and outputs rather than micromanaging them, so we set objectives.

"It requires a shift in behaviour. Leadership by outcome is different than leading by task. Lots of managers are more comfortable if see people have tasks to do.

Smartphones, tablets, broadband connectivity to upload and download big files or stream videos are all enablers for flexible working.

"What we say to customers is work is what you do, not where you are," Lloyd says.

IBM is another firm that has adopted flexible working, perhaps inevitable for a global organisation spanning every time zone.

Human resources manager John Saunders says there are no hard and fast rules about working remotely.

"We get people to look at what works for them and their team. It is an aspect of what it is to have distributed teams in a globally-integrated enterprise," he says.

"There are times we really like to get people together. It comes down to what the challenges are around working at home or working remotely. We've got to look at how we build teams, how we connect people, and sometimes it's really useful to get people into the same room together."

He says one colleague in Wellington may start taking calls at 4am, and she is also keen on Zumba.

"She works her day around her Zumba class. It's hard to do that when you come into the office.

"Another colleague has come back into the office because she misses being around us. There's that purely human element."

By Adam Gifford Email Adam