Five Reasons Why Flexible Work Options Are Good Business in a Bad Economy

Posted Wednesday, February 22nd, 2012  | Comments (9) rule

Kevin E. Cahill, PhD
Research Economist
Sloan Center on Aging & Work, Boston College
Phone: 617.552.9195

Early or late starting and quitting times, compressed work weeks, part-time and part-year employment, working off-site by computer, and phased retirement are just some of the flexible work options that companies can use to manage when, where, and how much employees work.

These time and place management (TPM) policies were daunting enough for employers to test-drive when the United States economy was on a fast track. Since December 2007, however, we have endured an 18-month recession, followed by a recovery that has been more sluggish than any other in recent memory. In the early 1980s it took seven quarters for the economy (i.e., Gross Domestic Product (GDP)) to “bounce back” and reach its pre-recession high, in the early 1990s it took five quarters, and in the early 2000s it took just one quarter. We are 16 quarters past the pre-recession high in 2007 and only now have we reached GDP levels that were achieved prior to the downturn. In such a business environment, employers are understandably nervous about making big workplace changes.

But is today’s lackluster economy really a signal to hold back on introducing or expanding a TPM policy? Here are five reasons why forward-looking managers see a green light where others see red.

  1. Improvements in productivity are always welcome. Most studies show a positive association between TPM policies and employee performance and well-being. Evidence suggests that a policy that is implemented well can benefit employers and employees alike, because the satisfaction that employees get from them can lead to increased productivity. More important, perhaps, these benefits are not dependent on economic conditions. They are valuable whether the macro economy is in recession or a boom.
  2. Attracting and retaining top talent is always a priority. Employees often cite flexible work options as being important dimensions of job quality. Employers seem to be getting the message. In June 2011, Bank of America Merrill Lynch reported the results of a national survey of chief executive officers, chief financial officers, human resources executives, and benefits administrators on workplace benefits. Half of the respondents said they use flexible or customized work schedules to retain older workers; 45 percent said they use these tools to attract younger workers. According to a report by Corporate Voices for Working Families, the role of flexible work arrangements on retention and recruitment is “one of the best-documented and most strongly argued aspects of the flexibility business case.” Like productivity, top talent is always in demand, regardless of the economic conditions of the day.
  3. Competition is alive and well. Firms compete no matter the economic climate. Innovation is a key part of this competition and innovations in the workplace are no different from innovations in a line of products or services. Firms that innovate not only what they produce but also how they do it have a competitive edge.
  4. Technology continues to advance. Economic growth may be slow, but new technology continues to move TPM forward, opening up options for employees and employers. Web-based self-scheduling software (for example, Stay Staffed and Celayix Software) helps full-time, part-time, and contractual employees manage their time in tune with the demands of the workplace and of their personal lives and lets supervisors plan and monitor effectively. Software for document sharing and virtual meetings allows employees in scattered locations to work collaboratively. Managers must stay up to date with innovations in TPM strategies. Options that might have been prohibitive — technologically or otherwise — recently could now be viable and valuable to pursue.
  5. The economy won’t be stuck in the mud forever. Business leaders are looking ahead to shape the way their companies will emerge from this period of slow economic recovery. Leaders know they must have a workforce positioned to respond quickly when the inevitable increase in demand takes place. Adopting TPM policies is one way to get ready.

There are at least two good reasons why managers might hesitate to adopt a new TPM policy or change one that’s in place. One reason is that more research needs to be done to determine the precise impact of TPM policies on business-relevant outcomes. (An innovative study launched in June 2011 by the Sloan Center is addressing this issue.) Another reason is that company-specific challenges, such as the process of obtaining buy-in among key decision makers, can make adopting a TPM policy difficult. These are valid objections. Our weak economy is not.

Comments (9) for "Five Reasons Why Flexible Work Options Are Good Business in a Bad Economy"

Flexible Work, Is It Really All That Available?

Posted Wednesday, February 8th, 2012  | Comments (9) rule

Stephen Sweet, PhD
Organizational Studies Expert
Sloan Center on Aging & Work, Boston College
Phone: 617.552.9195

Just because the personnel manuals of many — maybe most — companies in the United States profess to offer flexible work arrangements of some sort doesn’t mean that these arrangements really are widely available and improving people’s lives.

For one thing, there’s a difference between an option that’s on the books and one that employees can choose without adverse consequences. All too many flexible work arrangements impose significant career costs. Years ago, when my twins were babies, my employer would have let me scale back my hours. I didn’t do it, because my career would have died as a result. My experience marks the difference between an option that’s available and one that’s usable, with no catch-22s.

Even if we take the policies on companies’ books at face value and assume they’re at once available and usable, a lenient research standard has exaggerated the access to flexibility. Most studies of personnel practices give a company credit for a flexible work option if at least one person on staff can take advantage of it. By this standard, a company can appear to be a shining example of workplace flexibility even though the vast majority of its employees aren’t eligible for the options it offers.

Employee Eligibility for Flexible Work Options at Companies in the United States

Graph - Employee Eligibility for Flexible Work Options at Companies in the United States

Note: Although flexible work options appear to be common business practice in the United States, most companies across economic sectors don’t make them available to all — or even a majority — of their employees.

Source: Stephen Sweet, Elyssa Besen, and Marcie Pitt-Catsouphes. Talent management responses to the aging workforce: The case of American employers. Speech to Gerontological Society of America (annual meeting, Boston, MA; November 19, 2011).

According to surveys of U.S. companies in all sectors that Boston College’s Sloan Center on Aging & Work conducted in 2009, most flexible work options are of the “move work” variety — allowing employees to choose where or when they will do their jobs. These options rarely reduce workloads and only limited segments of the labor force have the resources needed to pause work — such as to take a temporary break from their jobs (to care for a family member, for example). That’s a big problem for many workers at stressful junctures in their personal lives, and leads to overwork, which studies show diminishes productivity. The types of flexibility that workers need most — cutting back on hours or going on leave — are least likely to be within their reach.

The availability and types of flexible work arrangements vary by type of job and type of business. When they’re in place, do they truly help employees manage work and family affairs? Do they make employees’ lives more manageable and, in so doing, benefit employers, too?

In sectors that employ highly skilled workers (such as law, medicine, and academe), the bright side of flexible work options is visible. Employers in these sectors use these options to attract and engage people whose specialized knowledge puts them in a competitive position in the labor market. These workers can demand some autonomy in order to balance the requirements of their work and family lives.

Workers laboring in sectors that rely on low-skilled jobs (such as accommodation and food services) commonly experience the dark side of flexibility. In these sectors, flexibility is not an option to be desired. Instead it’s a source of unpredictability, with work shifts and the number of hours on the job subject to change from week to week. For these people, the problem is not finding ways to reduce workloads but rather, finding ways to scrape enough work together to make a living on low wages.

The bright side of flexibility is unlikely to be the natural evolution of workplace design. Unions could push for flexibility, but it’s at best a secondary concern for them, and in any case their power to enact change has been greatly diminished. While some employers (particularly those in the high tech sectors) will clearly benefit from making flexible work arrangements more widely available and usable, others may find it hard to establish a business case.

The question today concerns how to expand the bright side of flexible work to wider segments of the workforce – especially the options to reduce work. Until we are able to do this, lives will continue to be reconfigured to match the workplace, rather than workplaces configured to match lives.

Biographical Note

Stephen Sweet is an associate professor of sociology at Ithaca College and a visiting scholar at the Sloan Center on Aging & Work. He is co-author of Changing Contours of Work: Jobs and Opportunities in the New Economy, published this year by Sage Publications (Thousand Oaks, CA).

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