October, 2009

Workplace flexibility has long been seen as mainly the province of middle and upper wage workers, but a recent report by Corporate Voices for Working Families looked into the potential benefits of flexible scheduling for lower-wage employees (those who earn $10 per hour or less than $20,000 annually, which they estimate at more than 25 percent of the US workforce and growing).

This report surveyed managers and lower-wage employees who do and do not have access to flex time (such as compressed work weeks, employee control over scheduling to accommodate personal preferences or family responsibilities, and periodic unscheduled leave). Service industries, manufacturers, and customer care services all were shown to potentially benefit from adding flextime programs. The following case studies presented some interesting findings:

• Bright Horizons Day Care Centers’ managers needed to be flexible themselves in creating flexible schedules for employees and still cover the 10-12 hours centers are open and state mandated teacher-to-child ratios. But instituting such programs improved retention and recruitment. Management found that employees were more willing to cover for each other due to feeling empowered by their ability to have some control over their own schedules; posting everyone’s schedules prominently was helpful in managing scheduling.
• Procter & Gamble allows many customer relations employees to telework, resulting in more motivated employees and savings for the company. The programs started when satisfaction surveys reported problems non-exempt employees had balancing their work and non-work schedules, coupled with the company’s desire to retain talented female employees after maternity leave. Employees cite the ability to go to appointments without using vacation time and the money they save commuting as benefits. The program has allowed the company to staff up when call volumes are expected to be higher, and deal with emergencies such as inclement weather because employees are working from home.
• A consumer goods manufacturer with continuous operations needed to institute flextime as a result of its around-the-clock production schedule. The flextime policy allows employees to add 2 hours to the end or start of a shift in exchange for that time off later. Swapping happens within a work team and cross training allows for creation of a ‘relief pool’ to cover absences, saving the company overtime expenses. The report notes that manufacturing may not be thought of as a workplace conducive to shift-swapping and flexibility, but the upfront investment management made to work with employees to implement it has paid off.

The researchers found that formal flexible time arrangements, policies that give workers access to a variety of time off options and schedule control, and creating a work culture that is supportive of occasional flexibility can yield impressive results. One important aspect of such programs is that they are not one size fits all – allowing employees to create their own strategies to manage their time necessarily means that outcomes will differ. But, as the report argues, the payoffs in better recruitment and retention, better engagement and customer service, and higher financial results are worth it.

The report’s survey helps illustrate where employees were feeling crunched for time, and what they would like to see their management due to address it.

Taking personal time during the work week is not uncommon:

• 1/3 of respondents take time off during the work week to attend to personal or family matters, take time without pay, or trade shifts with co-workers
• Employees with children are more likely to use flex time
• Women are more likely to use flex time than men

Flex time is desired:

• Having access to types of flexibility, such as compressed workweeks, can impact employee satisfaction
• 9 in 10 employees would use flex time if it were offered without penalty

Flex time isn’t always within reach of employees:

• Vacation is easier to access for some employees than taking breaks when they are desired, taking time off during the workday, and taking added time off without pay
• 1 in 5 respondents is expected to work overtime without notice

The report argues that when managers offer a variety of flexible scheduling options to lower wage employees it can be an effective management tool, lead to productivity increases, and control costs. In fact, flex time options, the report found, made companies more desirable to younger workers and helped retain top performers at high turnover jobs such as sales.

Tips for effective implementation:

• Help workers to view flex time as a business tool, not an entitlement. Recognizing the hidden costs from unscheduled absences, managers can increase productivity and avoid overtime costs if flexible options are implemented.
• Cross training employees is one way to help ensure that customer service is seamless in spite of employees’ schedules.
• Flex time should not lead to poor performance. Employers should address performance problems one-on-one rather than put the flex program at risk for other employees.

Other resources around workplace flexibility include Workplace Flexibility 2010 and the US Chamber of Commerce’s Institute for a Competitive Workforce.

SJF Advisory Service’s Beyond Paycheck-to-Paycheck report (currently being updated) describes the ways that innovative companies create and promote asset building opportunities for their employees through such initiatives as profit sharing, broad based stock options, and providing access to financial literacy or savings programs.   When we came across Bainbridge Graduate Institute Professor Mark Anielski’s writing on “genuine” wealth, it provided a potent reminder of what we meant by moving beyond paycheck-to-paycheck.  On one hand, we hope that employers can see their role in helping their employees become better stewards of their financial lives as they build wealth and move out of poverty.  But at a more philosophical level, our report echoes some of Anielski’s powerful themes.  For example, he writes that the etymology of the word “wealth” is “the condition of well-being.” True wealth, he concludes, is that which make life worthwhile, and encompasses both “productive work time” and “time for reflection and personal development.”   His piece Genuine Wealth and the Good Life goes on to explore parts of the world, such as the Emilia Romagna region in Italy, where a cooperative economic model supports over 15,000 business, and boasts one of the highest GDPs in Italy, and at the same time is “concerned with reciprocity, redistribution, equity, public welfare, strong relationships, social entrepreneurship and cooperative enterprise.”  Similarly, UNC Department of City and Regional Planning Professor Meenu Tewari showed how the Ludhiana region of India’s bicycle part, sewing machine, and woolen hosiery manufacturing firms create interdependencies that conserved capital and, despite being remotely located, could out-compete others to “dominate national markets in their sectors.”

As these international examples illustrate, innovative and competitive firms will be those that create interdependencies, engage employees, appropriately reward productivity, create opportunities for employees to set goals, and allow collaboration to achieve those goals. To return to Anielski’s thesis, moving beyond paycheck-to-paycheck should also mean that employers help give employees enough workplace security to pursue the other things outside of work that they value.