Is flexible working the magic bullet for U.S. employers?

Nov 21 2005 by Brian Amble Print This Article

As a raft of recent figures suggest that U.S. employers are headed for a retention crisis, a new report has highlighted the key role flexible working can play in stemming the flow of staff not to mention its impact on the bottom line.

Despite the increasing acceptance of flexible working policies in many European organisations, many managers and workers in the U.S. still view flexible working as a special benefit or exception for particular employees.

But in a new study released by the Washington-based non-profit Corporate Voices for Working Families (CVWF), 28 large American businesses report that flexible working - far from being a 'nice to have' employee benefit - is becoming a key management strategy that positively affects employee performance and can improve an organization's financial performance.

The study, "Business Impacts of Flexibility: An Imperative for Expansion," is the first to assemble quantitative data from independently-conducted studies in corporate America to demonstrate the impact of flexibility on business outcomes.

Using data from employee and customer surveys, profitability studies, flexibility studies and pilot programs, the study proves that flexibility does have a significant impact on critical business outcomes such as employee productivity, customer satisfaction, cycle time, and employee turnover.

Employees with access to flexibility have significantly higher engagement and retention with lower burnout and stress

In addition, the study consistently found that employees with access to flexibility have significantly higher engagement and retention with lower burnout and stress than employees without access to flexibility.

The study examined data from flexibility programs in 28 large American companies and found a direct relationship between flexibility programs and the bottom line.

"Effective flex programs increase employee commitment, impact employee satisfaction, and reduce stress, which in turn have a direct impact on financial performance," said Donna Klein, President and CEO of CVWF.

"Additionally, flexibility was shown to have positive effects on productivity, cycle time, customer retention, and response time."

Among the more eye-opening examples cited in the report, professional services giant Deloitte calculated that it saved more than $40 million in employee turnover costs in 2003, based on the number of its staff who said they would have left if they were not able to work flexible hours.

Ernst & Young discovered similar benefits. "A culture of flexibility is essential to helping our people at Ernst & Young to succeed personally and professionally. It is a key to retaining our people, and it is just as important to our financial results," said James S. Turley, Ernst & Young's CEO.

"In fact, we have found a direct correlation between a flexible workplace and financial success."

With such unequivocal support from corporate heavy-hitters, it is little wonder that Donna Klein described the study as marking a turning point in the discussion on flexibility in corporate America.

"The study uses internal research from these businesses to show that flexibility is not just a program that benefits the individual, it is a proven management strategy and critical tool in the fight for a competitive advantage in the global marketplace," she said.

The research demonstrated that flexibility has a positive impact of flexibility on talent management, especially retention of key talent, she added.

It also found that that individuals who have even a small measure of flexibility in when and where work gets done have significantly greater job satisfaction, stronger commitment to the job, and higher levels of engagement with the company. These human capital outcomes translate into innovation, quality, customer retention, and shareholder value.

What's more, she said, organisations find that flexibility is a driver of financial performance and productivity and is correlated to increased revenue generation and stock price, as well as having positive impacts on cycle time and client service.

In another case-study, PNC Bank put in place a seven-month compressed working week pilot program.

At the end of the experiment, it found that exceptions in bond settlements reduced by 50 75 per cent, bond inquiries answered the same day as opposed to a two-day turnaround, absenteeism dropped from 60 to 9 days in a similar work period and reduced turnover of employees with access to flexibility compared to other employees saved $112,750 in turnover costs.

"We know from our studies that flexibility can result in higher productivity among salaried and hourly workers," said Bill Rosner, PNC's Chief Human Resources Officer.

"Flexibility has helped us to retain valuable talent and reduce turnover costs. That impacts the bottom line."

Older Comments

Flexibility is one of those bandaid fixes because it does not address the key issue of frustration and stress from being treated more like a slave than a valued team member.

Humans naturally bridle at being ordered around because they interpret that as gross disrespect. The also react negatively when they can't put in their own 'two cents'. And the same is true for many other of their workplace experiences. They start out eager and ready to excel, but soon find out that no one cares about them or even wants them to participate.

The solution is relatively easy, but requires mafor changes in the way bosses treat their subordinates, changes which remove the obstacles, the stress and the frustrations employees normally experience. I personally proved the solutions in four successful turnarounds including a nuclear powered cruiser and a 1300 person unionized group in New York City. I am aware that Peter Hunter, author of 'Breaking the Mould' has done likewise.

Best regards, Ben Simonton Author 'Leading People to be Highly Motivated and Committed

Best regards,

Ben Simonton