Workplace flexibility has traditionally fallen under the domain of working mothers who even in our modern era struggle to maintain a balance between professional and family responsibilities.
With heavier work schedules, evolving gender roles, and an increasing necessity to care for aging parents, workplace flexibility has gradually become a top concern for workers of both genders across generational and socioeconomic lines
Fortunately companies that choose to wade into the murky waters of workplace flexibility continue to find that certain arrangements can make a positive impact on their bottom lines. The companies that are most successful in implementing effective workplace flexibility policies understand that one size does not fit all and that arrangements must be implemented carefully, keeping the unique characteristics of their business and workforce at the forefront. Bearing that in mind we will explore different types of workplace flexibility arrangements, their benefits, and the challenges as well as best practices, for implementing the right kind of programs.
In 2012 The Washington Post conducted a survey on workplace flexibility in the DC Metro area that found 88% of area workers rated workplace flexibility as a top priority – the same number of people who considered health care benefits a top priority as well. That survey echoes similar findings in a recent Human Capital Trends study from Deloitte which discovered a strong desire for workplace flexibility among men who work more than 50 hours per week, women without children, and the Millennial Generation just now entering the workforce. Underlying many workers’ desire for increased flexibility were concerns about caring for aging parents, playing an active role in their children’s lives, and pursuing educational opportunities to remain competitive in the talent marketplace among a host of other reasons. Whatever the personal circumstances and motivations of a given individual, the trend toward an increased desire for flexibility is undeniable. But is it good for the company?
Recruitment & Retention
Recruitment and retention are typically top of mind for any HR or Talent leader and finding talent with the right skillset, particularly at the senior level of an organization has become more challenging with increasing globalization. As we emphasized in our 2013 report ‘Understanding Risk Exposure’:
“Truly successful leaders are now expected to drive change, demonstrate strategic agility, be globally mobile, possess a global mindset, speak multiple languages, and deliver immediate and demonstrable results. The supply of such talent is dwindling, leading to higher demand for a select number of high potentials and an elevated risk profile for those companies that have insufficient bench strength to combat unplanned change.”
In this environment, business leaders look to workplace flexibility as an effective way of broadening the talent pool, but they struggle with implementation. Demonstrating this point, a study published in the most recent issue of the journal Community, Work & Family reports that “while large percentages of employers report that they have at least some workplace flexibility, the number of options is usually limited and they are typically not available to the entire workforce.” For companies struggling with recruitment and retention, it is critical they work to develop a comprehensive approach to workplace flexibility. A recent article in Forbes zeroes in on a perfect example of the kind of barriers that can be deconstructed:
“If talent doesn’t need to be in the office, your talent pool is suddenly global, not local or even regional. You can build productive relationships with talent across the country or across the globe. With social networks, intranets, project-specific groups, and teleconferencing, distances become increasingly irrelevant.”
Alternative work locations, of course, are only one of many instruments in the workplace flexibility toolbox, but like other arrangements, they can have a profound impact on your ability not only to recruit but to retain top talent. As we covered extensively in a recent post, The Cost of a Bad Hire, retention is critical to maintaining business continuity and controlling costs.
Costs & Productivity
Countless studies have shown that when managed right, workplace flexibility leads to improved performance and productivity among employees. This seems counterintuitive to business and HR leaders who sometimes believe more hours in the office equals more work getting done. The reality, it appears, is much more complicated. A 2010 article in the Atlanta Journal-Constitution profiled UPS and their shift toward greater flexibility. Following the launch of their telecommuting pilot, the company found that productivity had risen by 17% and that 86% of teleworkers experienced improved job satisfaction.
Productivity is not the only way workplace flexibility can enhance the bottom line. According to a report released by Brigham Young University a few years ago, IBM realized savings in the order of $123 million annually by supporting telecommuting. Much of the savings came not only from reduced real estate costs, but reduced energy costs which contributed over $20 million in savings overall. Another report issued by the White House in 2010 found workplace flexibility policies yielded incredible savings during emergencies and weather-related interruptions. In the winter of 2009 and 2010 alone the US Government saved $30 million per day during snow-related closures.
Types of Flexibility
Up until this point we have focused quite a bit on telecommuting as it is one of the most popular and well-known workplace flexibility options, but for some companies and employees, telecommuting may not be a realistic option or may be only one of several options worth considering. In fact, one of the simplest, easiest, and most beneficial approaches to workplace flexibility is “flex time”.
The Sloan Center on Aging & Work at Boston College is at the forefront of workplace flexibility. They define flex time as “schedules that vary from the standard work schedules of an organization that meet the needs of both the employer and the employee which are based on worker needs within set parameters approved by a supervisor.” The specifics of a given flex time arrangement depend upon the circumstances of both the company and the individual workers. Some companies establish core hours for which employees must be present, for example, 10am – 3pm, and require employees to be in the office 40 hours per week, allowing the individual employee to determine their own arrival and departure time. Other companies may eschew the “core hours” component while requiring employees to be present 40 hours per week at times completely of their own choosing. Another flex time option is the “compressed work week” under which, as an example, an employee might work four 10-hour days instead of five 8-hour days.
Flex time is a good workplace flexibility arrangement for firms where close collaboration and in-person meetings are indispensable, or where it is simply not feasible for employees to work remotely due to lack of technology or other constraints.
Reduced-Hours includes arrangements such as voluntary part-time work where an employee chooses to work fewer than 35 hours per week even when full-time work is available and part-year work where an employee works only a certain number of months per year. Like other workplace flexibility options, reduced-hours arrangements are highly dependent upon the circumstances of the companies and the individuals seeking greater flexibility.
Voluntary part-time arrangements are highly sought after by new parents following maternity/paternity leave, workers dealing with the loss of a close family member, soon-to-be retirees, and employees seeking to further their education. There are of course a host of other motivating factors behind desire for voluntary part-time work, among them reducing work-family conflicts; the Sloan Center has found that 61% of younger people and 87% of older people find part-time work preferable though the degree of limited access to employer benefits may pose a challenge to them.
Part-year arrangements are common among teachers who take time off between terms, semi-retired accountants who take advantage of tax season between January and May, and professionals who otherwise work full-time but for a variety of reasons seek extended time off – for example to take care of their children on summer break or to visit family in another part of the world. Further to that point, part-year arrangements can serve as a beneficial workplace flexibility option for employees who have experienced a major life event such as births/adoptions or the death of a loved one. Like voluntary part-time work, the part-year option provides workers with the flexibility for family and leisure considerations while providing employers with the ability to attract high-level talent and retain top performers.
Telework is a workplace flexibility arrangement where employees work outside of a traditional facility. For some employees this means working from home while for others it means doing work in a satellite location or even embedded within the work site of a client. Telework lends itself well to a wide variety of situations, not the least of which is attracting workers whose talents are hard to come by and who are unwilling to relocate for any number of reasons. It can also be a useful approach in the event that inclement weather, construction, or other disruptions make travelling to or working in the office problematic. Telework can be beneficial to parents and non-parents alike who for one reason or another may need to be at their home for a period of time but find it unnecessary and perhaps counterproductive to sacrifice an entire workday. Regardless of the reason, telework is a workplace flexibility arrangement with significant benefits. According to the Sloan Center, employees who work remotely save time on commuting and report lower work-family conflict. In most cases the performance of the telecommuting employee improves and their level of job satisfaction increases significantly. For employers, there are often cost savings to be realized in the form of office space reductions but more importantly access to skilled workers is much greater than under a traditional workplace arrangement.
ROWE or Results Only Work Environment is an approach to workplace flexibility that, as the name suggests, focuses on the results of an individual employee rather than the number of hours they spend in the office. The approach was created in 2005 by Best Buy executives Cali Ressler and Jody Thompson to address the limitations they saw in more traditional workplace flexibility arrangements like telecommuting in recognition of the fact that circumstances vary widely from individual to individual. From their website:
“In a Results-Only company or department, employees can do whatever they want whenever they want, as long as the work gets done. No more pointless meetings, racing to get in at 9:00 am, or begging for permission to watch your kid play soccer. No more cramming errands into the weekend, or waiting until retirement to take up your hobbies again. You make the decisions about what you do and where you do it, every minute of every day.”
Their website features a series of case studies from companies of varying sizes and backgrounds including big names like Gap Inc. but also less well-known organizations like the Iowa Board of Educational Examiners.
The most notable experiment in ROWE took place at Best Buy where the idea originated. After years of financial struggle and the replacement of the company’s CEO in late 2012, the program was scrapped. The new Chief Executive, Hubert Joly explained in a 2013 op-ed that the approach to workplace flexibility was fundamentally flawed in that it limited managers simply to delegation in terms of leadership style. For Joly, coaching, motivating, and directing were important factors which ROWE could not accommodate.
Following the Joly op-ed were harsh criticisms from ROWE and non-ROWE adherents alike, suggesting that the elimination of ROWE was at best the treatment of a symptom rather than the cure of a root problem. Gary Peterson the President of Gap Intelligence provided the clearest articulation of Best Buy’s woes in a piece written for Forbes:
“While cutting ROWE sends a message to Wall Street that Best Buy is serious about its turn-around, it does little if anything to cure the company’s real problems. Strong corporate culture demands an environment of trust and by eliminating ROWE; one can’t help but feel that Best Buy leadership sent a message that it no longer trusts its salaried employees. Workforce retention is one of the greatest benefits of ROWE, how will its removal impact Best Buy’s ability to keep its strongest future leaders and rebuild its desperately needed culture?”
Other organizations swear by ROWE citing increased productivity, enhanced revenue, and significantly reduced costs. To managers who fear workers might take advantage of their ability to slack off, ROWE proponents have an easy answer: Fire them! “As long as the work gets done” is their motto. Still, the jury is out on the viability of ROWE as a realistic option for workplace flexibility until more companies are willing to take the leap and give it a try.
Workplace flexibility will continue to grow as a factor in recruitment, retention, and overall financial competitiveness. Companies that embrace some form of workplace flexibility will be in a position to improve productivity, reduce costs, and boost morale and job satisfaction among their employees. The approach or approaches that any given organization takes to workplace flexibility will depend on the circumstances of the company as well as the circumstances of the individual employees within the company. Regardless of the form, here are a few best practices that will assist companies in the implementation of the workplace flexibility program(s) that work best for them.
- Build a business case: When exploring different approaches to workplace flexibility, consider the impact any given program will have on your organization as well as the needs and circumstances of employees. By establishing a clear understanding of the ramifications of each option, you can set parameters like core office hours that will mitigate any negative consequences that could arise.
- Avoid Stigma: Implementing a workplace flexibility program does not guarantee that employees will take advantage of it for fear of penalization. For women, working from home or cutting back hours is a surefire way to get placed on the dreaded “mommy track.” For men, taking an active role in their children’s educational and extra-curricular activities is seen as abandoning their place in society as the bread winner of the family. Unfortunately, these fears are not completely unfounded, so companies that are serious about developing a flexible culture and reaping the rewards thereof should place an emphasis on the benefits of flexibility to the business when communicating with employees and should lead by example by requiring senior leadership to take part.
- Provide Training and Resources: The number one reason workplace flexibility programs fail is due to lack of training and the lack of requisite resources for employees to get work done in a non-traditional environment. Some companies offer telecommuting employees a stipend to purchase equipment and supplies to put together a productive home office. Companies that are most successful in the realm of workplace flexibility place an emphasis on training employees on how to communicate with remote colleagues as well as training managers on how to supervise from afar.
- Know Your Competition: The best way to take advantage of the benefits workplace flexibility offers is to continually network with talent outside of your organization. Companies that are open to embracing telework suddenly have a much broader talent pool to select from. By keeping an eye on their competitors they also remain aware of different ways to foster a flexible environment and maintain a feel for the types of flexibility that workers are seeking.
In the coming months we will explore each of these approaches to workplace flexibility in greater detail. In the meantime, download The Rapidly Evolving Global Workforce to gain a greater understanding of the changes happening in the global talent marketplace and what you can do to stay ahead of them.