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.

9 responses to “Five Reasons Why Flexible Work Options Are Good Business in a Bad Economy”

  1. Jean Beattie says:

    Thank you for this information. I wonder if you are working at all the the folks in HR here at BC on any type of job flexibilty.

    Thank you,

  2. The link between well-being and access to flexibility has also been fully explored. Having the ability to take care of what is important (at work and in life outside of work) without being penalized is essential to a healthy society. Oh! and it also leads to greater business outcomes.

  3. Kathie Lingle says:

    This is an important topic, and the 5 reasons are valid as an opening gambit to a much larger discussion. There are even more compelling reasons why business leaders are and should be embracing workplace flexibility in bad times as well as prosperous ones: it’s green, highly motivating, and has no direct costs. What is curious (and limiting) about the framing of this essay is the label “time and place management policies.” I’m guessing this is because the author is an economist, which is a perspective much needed in the discussion of the impact of intrinsic motivation in the workplace. However, I find the TPM label unfortunate, because it smacks of Taylorizing – “scientific management” – which has contributed about as much to the understanding of human motivation as “home economics” has to the advancement of economic principles. The ultimate goal of workplace flexibility is to maximize autonomy and unleash energy. That’s about as far away as it gets from the linear dimensions of time and place.

  4. Thank you for this information Kevin. Another reason why some managers hesitate to adopt TPM policies is that they feel if they give an employee the flexibility to work remote, then they will “slack off” and not be productive. I am a firm believe that if that happens, then the manager has an employee with a performance problem, not a “inability to work remote” problem. If someone is a slacker, they will be so in the office as well.

  5. Flexible work scheduling, by whatever name, is what the workplace has always needed. When women lobbied for fair wage and changes in the workplace, one of the issues we addressed was the fact that the typical workplace design actually worked against family and community because the time structures and work expectations were so rigid. It is sad that after all these years we are still trying to get this changed, but at least we now have a wider variety of tools (thanks to technology) to support the concept. I work with an agency that is devoted to assisting older workers who want to stay in the workforce, but after a lifetime of 40 hour weeks many prefer a reduced schedule. If more companies were willing to adopt flexible work and shared work models it would go a long way to enahncing job opportunities for our clients and all age groups. How nice it would be if young people starting out could be matched with an older adult in a shared work environment, with the employer benefiting from the broader skill base they would bring to the job.

  6. Kevin E. Cahill says:

    Hi Everyone,

    Thanks so much for the comments.

    I would like to follow up on a couple of points. I certainly agree that the benefits of flexible work arrangements extend beyond things like business outcomes and work-family conflict. As noted above, other benefits may be very important as well, like autonomy and motivation (Kathie) and well-being (Andrea), even if they are not easily quantifiable (which, as an economist, I gravitate toward). That said, I do think there’s value in the term “Time and Place Management,” as it describes a set of management policies well – – those that pertain to time and place. That is, TPM describes policies, not objectives.

    I also agree that workers generally, and older workers in particular, stand to benefit from increased flexibility. In fact, with the aging of the workforce and projected job growth, I think employers will have no choice but to adapt to our changing demographics, and workplace flexibility is a part of this. A key question is, in light of our aging workforce, how can we as a society move forward most efficiently?

    Thanks again, everyone. I truly appreciate your comments.


    – Kevin

    PS: I know several economists who could learn a lot by taking a home economics course!

  7. I completely agree with Patrice and it’s such a good point to make – the main reason that employers shy away from flexible work arrangements is the issue of trust. The ability to trust that your employees will be just as productive (and perhaps more so, according to studies by Stanford and the U of Minnesota) when they’re not under a constant, watchful managerial eye is a difficult skill to master, but employers who understand how the workforce is evolving are sure to adopt this skill.

    Telecommuting jobs are especially important for the aging workforce because many older professionals live in areas that were once thriving, but have seen businesses moving away or closing up in recent years, and the availability of quality jobs is diminished. Telecommuting opens people up to employers and job opportunities thousands of miles away. I’ve heard this called “Rural Sourcing” and “On-Shoring,” and either way, it’s a fantastic thing to see!

  8. Removal says:

    Flexible work options is really good when the economy is in a bad state though I think you can benefit from it in other times also. However, it can be a life-saver during a crisis such as this one.

  9. Adell Yusi says:

    I’ve just recently began a site, the information you present on this website has been helpful to me tremendously. Thank you for all your time & work.