Online: www.bc.edu/wfnetwork E-mail: [email protected]Phone: 617-552-1708 Fax: 617- 552-9202 Flexible Work Arrangements: A Strategic Business Imperative in Any Economy February 2009 Judi C. Casey Alfred P. Sloan Work and Family Research Network at Boston College
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Flexible Work Arrangements - Sloan Work And Family Research Network
A presentation from the Sloan Work And Family Research Network about Flexible Work Arrangements by Judi Casey. This presentation outlines the benefits and pitfalls of implementing a flexible work arrangement at your company including real-life examples.
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• Constant change is the norm• Resilience is a differentiator• Must be nimble and responsive in any economy • How individuals, leaders and organizations contribute• FWA are a strategic business imperative in any economy
Down Economy • Alternative to Layoffs
and Rehiring• No/Low-Cost Strategy• Support Employees• Reduce Stress
• “Compressed Work Week: A work schedule that condenses one or more standard workweeks into fewer, longer days. (9/80)
• Flextime: A work schedule with variable starting and ending times, within limits set by one’s manager. Employees still work the same number of scheduled hours as they would under a traditional arrangement. (7 am-3pm or 10 am-6pm)
• Job-Sharing: An arrangement in which two or more part-time (or occasional) employees share the responsibilities of one full-time job at a pro-rated salary.
• Part-time Work: A work schedule that is less than full-time but is at least half of the regularly scheduled full-time workweek.
• Personal or Family Leaves: A block of time off while retaining one’s job. These leaves may be paid or unpaid.
• Telecommuting: …regularly work at home or at an alternative worksite during part or all of a work schedule (in office M/W/F, remote work T/Th).”
96% report that flexibility influences their decision to stay at the company; 73% say that flexibility is “very important” in that decision, and 23% say that it’s “somewhat important.”
Employees who use flexible work arrangements scored, on average, 30% lower on stress and burnout.
Bank branches with flexible work arrangements had retention rates 50% higher than other branches.
Corporate Voices for Working Families with WFD Consulting
• 73% of employees with high availability of flexible work arrangements reported that there was a high likelihood that they would stay with their current employer for the next year. Bond, J.T., Thompson, C., Galinsky, E. & Prottas,D. (2003). Highlights of the 2002 national study of the changing workforce. New York: Families and Work Institute.
• Studies indicate that the availability and use of flexibility and other work-family policies is associated with higher commitment, job satisfaction, loyalty, and lower intention to turnover. Kossek, E., Lautsch, B., & Eaton, S. (2006). Telecommuting, control, and boundary management: Correlates of policy use and practice, job control, and work-family effectiveness. Journal of Vocational Behavior. 68(2), 347-367.
• Organizations with higher employee satisfaction report larger than average annual returns to investors.
“…with respect to flexibility programs that enable workers to work from home, if the proportion of employees working from home increases by one percentage point, the firm’s profit rate increases by an additional six-tenths of one percent. For the average firm included in this sample, this equates to a profit increase of approximately $84 million.”
Meyer, C.S., Mukerjee, S., & Sestero, A. (2001). Work-family benefits: Which ones maximize profits? Journal of Managerial Issues 13(1), p. 40.
Effective steps to reduce obstacles at your organization:• Make managers accountable (raise-dependent) for creating a
work environment where employees can thrive at work/home• Help managers to measure important business outcomes • Try a “pilot” program• Train managers and co-workers about how flexibility can help
them to achieve their business goals• Train managers and co-workers about how to implement and
sustain FWA• Encourage communication about how work will get done and
the “rules of the game”• Use metrics and evaluation to demonstrate impacts, make
KPMG UK, German and Swiss firms: Flexible Futures. Asked staff to volunteer to work either a four-day week with a proportionate pay cut or take a sabbatical for up to three months.
“We learnt some painful lessons from the last downturn when we made redundancies and lost some real talent. When the upturn came, we were not positioned as well as we could be. So this time the challenge was clear. Could we create sufficient flexibility in our cost base that would allow us to react quickly to future events while retaining our people for the moment the market picks up?” People Management
Dell asked employees to take up to 5 days off without pay during the next 3 months. Although the leave is not mandatory, the company has indicated that layoffs may be necessary if not enough workers participate in this reduction of hours/pay.
Goal: Reduce workforce costs without severing ties to employees
FedEx cut salaries of senior executives and salaried-exempt employees by 5 to 20%, a $600 million savings. Brandeis University requested that faculty members give up 1% of their salary, and 30% have volunteered.
Cisco ordered a four-day year-end shutdown. Instead of a severance package, Cisco Systems offered the 8,500 employees it laid off in April, a third of their salaries, all benefits, and stock-option awards while working for one year at a not-for-profit group already associated with the company.
In Atlanta, an expected budget shortfall of $60 million meant that 4,600 city employees had their weekly hours and pay cut by 10%.
During their layoffs, founder Charles Schwab and his wife created a $10 million educational fund for these workers. The fund covers as much as $20,000 worth of tuition over two years at accredited academic institutions for re-training and new skill development.
• Megavolt (Springfield, MO) moved to a "shared work program" of three 10-hour days a week. While workers keep their jobs, the lost 10 hours each week is enough for them to be eligible for state unemployment benefits in Missouri.
• In 1984, the Maryland General Assembly established the Work Sharing Unemployment Insurance Program. This voluntary program provides employers with an alternative to layoffs. The principle behind Work Sharing is simple; instead of laying off a percentage of the work force to cut costs, an employer can reduce workers' hours by the same percentage and keep the entire work force on the job.
• 16 states allow workers with reduced schedules to collect unemployment
Carefully consider the impact of your recession driven strategies on employee morale, productivity and loyalty in the long run.
“So, as recession-inspired actions cross your desk, be sure to evaluate them not only for their bottom line impact today, but also know their impact on your employees and their level of engagement for tomorrow.” Allbusiness.com
• FWA can help you to achieve your business goals• FWA offer a wide range of business benefits• FWA provide an alternative to layoffs• Research data documents the significant ROI of FWA• Obstacles exist but can be overcome