In the Part I of this series we talked about the opportunity to support our need for flexible work cultures with a solid business case. We outlined the fact that the majority of our employees require flexibility at some point in their careers. Research increasingly points to flexibility as one of the most important career considerations of staff, emerging leaders and even our seasoned leaders. If we do not offer this flexibility in our organizations we will lose productivity in our top talent pool and we may lose this top talent completely to our competitors. In addition to flexibility as a requirement for top talent, consider the possibility that flexibility can actually improve your organizational results.
We also outlined four key business strategies that can be supported by flexibility in the organization. These are:
1-Employee Attraction and Retention
2-Improved Productivity
3- Improved Customer Service and Satisfaction
4- Effective Operational Management
This second posting will cover the first two strategies. Why are these strategies key to a business case for building a flexible work culture?…….or said another way…… How will flexible work cultures actually help to accomplish these business strategies?
Employee Attraction & Retention
As stated above there are very few employees that go thru their entire career without the need for flexibility at some juncture. In addition we know that there are many groups within our talent pools that require flexibility as part of a desired career package. Dual income families are the first group that comes to mind. [1]Eighty percent of all couples in the United States are dual income. This means that both members of the household work in jobs outside of the home. Many of us can remember a time when all those we worked with were from single income families. Many of us may still be members of a single income family; however this is far from the norm. Only 20% of the population have an adult at home full time managing household tasks . This percentage is shrinking as we move forward. Our organizations are still in many ways structured as if everyone has an adult family member at home managing the many things that must be done to run a household. As a result we may not even be aware of all that it takes to keep a household chaos free. Most individuals in the U.S. do not have this luxury. Simple things such as car repairs or maintenance, doctor appointments, home maintenance, financial management, and last but not least child or elder care responsibilities require time to manage effectively. Dual income families are under tremendous pressure not only to make ends meet but to stay organized and accomplish household and family related tasks in a timely and effective manner. This pressure often causes significant stress. In addition, we know from research that the reduction of this pressure can result in a powerful barrier to exit in employees. For many of our employees, it is high on their list of priorities to establish flexibility that works well for their family unit. Once this flexibility is in place, it is a very strong and low cost employee benefit and barrier to exit.
Not only dual income family members are looking for flexibility. Other groups that are demanding flexibility in their career package are generation x & y, those moving toward retirement, those with increasing outside interests such as hobbies or educational goals, and those serving in the military and working in reserve units. There are more and more reasons why individuals require flexibility and our competitors are providing it. The size of the talent pool that will periodically require flexibility in their career is growing rapidly. The organization with a flexible work culture will be well prepared for the future. Flexibility is a competitive advantage in today’s marketplace.
In addition to the competitive need to provide flexibility, the bottom line is best served by preparation for flexibility as well. The loss and recruitment of replacement staff conservatively costs a Firm 150% to 200% of annual salary. By contrast, a full one year parental leave, or elder care leave costs only 32% of annual salary. Multiply the savings noted above by the number of employees likely to require flexibility in the future and bottom line impact is evident.
Increased Productivity
Flexibility, when well executed, will improve productivity within an organization in a variety of ways. Well executed flexibility requires improved communication regarding roles and expectations. Flexibility often reduces stress dramatically which can result in increased concentration, improved attendance, morale and improved performance. Each of these elements is a building block to improved productivity.
A 2007 CCH Survey shows that 66% of absence from work is related to other than personal illness. In addition, 35% of absence from work is related to stress and family needs with another 18% related to personal needs. [2] Similar surveys have shown that individuals will often not actually take the day off, but will come into work with these distractions pulling them away from work during the day. This lack of concentration directly impacts productivity because many individuals cannot use all of their vacation time for these needs yet the issues must still be dealt with using work hours to make calls, and keep appointments. Catalyst cites 76% of managers and 87% of employees reported that flexibility had a positive impact on productivity.
A recent study out of Cranfield School of Management suggests that workers given flexible hours by their employers tend to work more intensely than their counterparts who are keeping more rigid office hours. The researchers suggest that the reason for this phenomenon is a “kind of payment” to the employer from the worker in exchange for the freedom to choose where and when to work. [3]
Flexibility is not always about personal needs, often flexibility is requested for business reasons that directly increase productivity. Flexibility requests are increasingly about setting aside uninterrupted time to complete certain tasks , to accommodate urgent work requests and to address the business needs such as the following:
– To be available to colleagues and customers in other time zones
-To extend total hours of availability of a team
-To match uneven and/or seasonal workflows with proper resources
– To address needs put aside during periods of heavy workload
– To avoid long commutes of unproductive time[4]
In companies working on building flexible work cultures there are often questions about how to structure a pro-rata compensation and benefits package for those who have requested some type of flexibility. The main concern is often the protection of accepted organizational metrics and fairness. The mechanics of this effort are not the most challenging aspect of the implementation. Organizational cultures and unwritten rules about what is “normal”often increase the resistance to mainstream acceptance. However,as stated previously, many flexibility arrangements do not even involve an overall reduction in hours but involve other types of flexibility that do not impact compensation. However, complexities seem to remain when implementation is attempted. The only solution is solid communication of the business benefits to the organization.
Organizations should avoid removing individuals from advancement and promotion tracks as a result of flexibility. First and foremost the number of individuals who desire flexibility is increasing and these numbers suggest it is prohibitive to exclude the significant number of individuals from maximizing their potential. In addition, the lost of talent from reducing the growth of this talent pool is short sighted. It is critical that outcomes, experience requirements, and role responsibilities are not confused directly with hours worked or departure from cultural norms . There are positions that are very difficult to execute with less than a full time plus level of hours. In reality,however, many of these roles can be split or shared if viewed in a new light. In addition, as has been stated previously, many types of flexibility do not require a reduction of overall hours . Therefore there is no impact preventing access to full time plus executive roles. If the team perceives lack of advancement as a consequence of flexibility the competitive advantage and business case is lost.
Stay tuned for Part III in the series on The Business Case for Building Flexible Work Cultures
[1] Marriage.families.com
[2] CCH Absence Survey – 2007
[3] Discovery News, Feb 2010
[4] Building a Flexible Workplace, Catalyst July 2009
Mary L. Bennett
Organizational and Talent Development Consulting-Leadership Development, Sucession Planning, Diversity & Inclusion, Women's Initiatives, and Executive Coaching. Twenty Years as an executive in the accounting and consulting industry provides a foundation for a practical approach to real business solutions.
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Payment for productivity rather than how many hours a week you are sitting at your desk seems to be the way of the future.
I agree. Compensation based on results is the future for all organizations. Unfortunately so many organizations have not reached the point where they manage and compensate in this manner. Clear job descriptions, expectations and methods of measurement seem to be far away for some.