Sep 01, 2014

Workplace Flexibility

Recently, a topic that’s been trending in the workforce is workplace flexibility. Various forms of workplace flexibility are being explored in research studies, public policy changes, and broad business strategies.

What is Workplace Flexibility?

The Sloan Center on Aging and Working at Boston College provides a commonly-accepted definition for workplace flexibility: “Flexibility is about an employee and an employer making changes to when, where and how a person will work to better meet individual and business needs. Flexibility enables both individual and business needs to be met through making changes to the time (when), location (where) and manner (how) in which an employee works. Flexibility should be mutually beneficial to both the employer and employee and result in superior outcomes.”

Types of Workplace Flexibility

Types of Workplace Flexibility

Source: Sloan Center

Current Status of U.S. Workplace Flexibility

According to the Sloan Center, in 2010, most U.S. workers were employed in traditional work environments, where they were expected to work a defined number of hours, with minimal control over when and where to work, and with few opportunities for time off. However, this model has evolved. A 2013 study of 500 full-time workers by the Flex+Strategy Group found that 97 percent of respondents reported having some form of work-life flexibility. Of those who had it, 55 percent said they used informal occasional flexibility, and 42 percent had a formal agreement.

However, the 2014 Families and Work Institute Survey shows that further progress in workplace flexibility is possible. Approximately 62 employers report not allowing some employees to work regular paid hours at home on a regular basis. And 60 percent report not allowing some employees to control which shifts they work.

In all private industry sectors combined, approximately one-third of employers feel that they have established options for workers to work in a flexible manner. Compared to all other sectors, retail organizations provide the greatest flexible work options. Meanwhile, in manufacturing, only one in five organizations have established options and policies that allow employees to work in a flexible manner. Some industries, such as healthcare and social services, are proactive in encouraging employees to discuss workplace flexibility with supervisors.

“The most common industries in which we see flexible and work-from-home job listings are medical/health, customer service, computer & IT, education/training, administrative and sales.” ~Sara Sutton Fell, CEO of FlexJobs

In general, the public sector offers more flexible workplace programs than the private sector. The federal government has been a leader in initiating and implementing flexible work options in many of its agencies. Employees of the federal government in many agencies have the option of flexible scheduling, compressed workweeks, and telework.

Prevalence of Flexibility Programs, by Industry

Prevalence of Flexibility Programs, by Industry

Source: Work at Work

Due to the economic recession, many employers increased their offerings of workplace flexibility in order to reduce labor costs. These measures included increasing telecommuting, shifting employees to contract work, offering buyouts or other inducements for early retirement, and encouraging phased retirement.

Benefits of Workplace Flexibility For Employers

With an evolved environment due to technology, social and work process changes over the last decade, labor experts have been building a case for increased workplace flexibility.  A 24/7 global workforce that is more diverse presents new challenges and opportunities to workforce planning and the design of the physical workplace. 

Organizations are engaging growing numbers of virtual and remote workers, and these employees and contractors may define ‘workplace’ as a home office, on site with clients and colleagues, on the road, or even a local coffee shop, or shared office lease space. This transforms the traditional definition of a workplace as a single, static location such as a corporate office to a dynamic, fluid combination of physical and virtual spaces with technology as a key enabler.

Employers increasingly report that the recruitment and retention of a skilled workforce is an important challenge. Research by labor experts shows that organizations with workers who are less stressed and more committed and productive are better able to recruit and retain talent.

Top Business Reasons for Offering Flexible Work Options

Top Business Reasons for Offering Flexible Work Options

Source: The Sloan Center

Studies have shown that workers with access to flexible work arrangements tend to be more satisfied, committed, and engaged with their job. This leads to increased innovation, quality, productivity, and market share. Research by the Corporate Leadership Council found a correlation between a culture of flexibility and a worker’s discretionary efforts, where flexibility has a direct impact on worker commitment. The study found that every 10 percent improvement in commitment can increase a worker’s level of discretionary effort by 6 percent and performance by 2 percent, and that highly committed employees perform at a 20 percent higher level than non-committed employees. Additionally, every 10 percent improvement in commitment can decrease an employee’s probability of departure by 9 percent.

From a cost perspective, providing workplace real estate is expensive for employers. Utilization data shows that workers are only at their desks 40 to 50 percent of the core working day, which provides the opportunity for businesses to use less space and reduce cost through a different approach. In the U.S., Aetna, the health insurance company, saw over $78 million in reduced real estate costs resulting from telecommuting workers.

Benefits of Workplace Flexibility For Workers

Workers report that they are more productive and engaged when they are able to balance the demands of their work with other aspects of their lives. A study of over 19,000 employees at nine companies in various industries found that stress and burnout were lower among workers engaged in workplace flexibility arrangements.

Telework, especially, has been linked to increased loyalty and productivity. A survey by Staples Advantage found that 96 percent of telecommuters said that they feel better and more productive when they work from home. When asked to draw comparisons, they said that their stress levels had dropped 25 percent on average and overall happiness had increased 28 percent. And without the commute to the office (an average 77-mile round trip for respondents), 76 percent were more willing to put in extra time on work. More than 80 percent said that they maintained a better work/life balance with telecommuting. Some telecommuters (40 percent) said they would be willing to take a pay cut rather than stop telecommuting.

The need for workplace flexibility is especially high for low-income workers. Over 57 percent of low-income families are headed by single parents, of whom the vast majority work at least one job.

The Challenges of Workplace Flexibility

Often employers and workers resist implementing workplace flexibility due to challenges that arise. Some of the reasons for resistance to flexible work arrangements are:

  • Less effective communication and collaboration
  • Some flexible arrangements are not appropriate for all people, jobs, or industries
  • Unintended impact to organizational culture due to dispersed workers
  • Worker burnout due to feeling constantly “plugged in”
  • Difficulty in building effective working relationships among dispersed teams
  • Negative impact on productivity
  • Perception of loss of control by managers and supervisors
  • Time lag in responding to emergencies
  • Lack of technology availability for workers to have flexible work arrangements
  • Abuse of flexible work arrangements
  • Low support or direction from HR
  • Ambiguous or unclear policies and guidelines
  • Distractions from a non-traditional work environment
  • Limited social interaction for telecommuting workers

“Right to Request”

In 2013, Vermont passed an “equal pay” law that provided employees with the right to request flexible working arrangement or predictable work schedules. San Francisco, in October 2013, became the first city in the U.S. to pass a similar law where workers can request changes to their work schedules to care for family members. Montana and Oregon have also passed similar legislation.

These “right to request” laws are becoming a step towards workplace flexibility by providing a formal mechanism for workers and employers to discuss workplace flexibility options. While these do not mandate a right to workplace flexibility, they do give workers the right to request flexibility.

Other countries have implemented similar laws that are considered to be successful. In the United Kingdom, a right to request policy went into effect in 2003 for workers who had children who were disabled or under six years of age. It was expanded in 2007 to include caregivers, in 2009 to include parents with children under 17, and in 2011 to include parents with children under 18. Over this time, the number of workers with flexible schedules in the U.K has increased. While employers have the discretion to deny requests, only 10 percent have been turned down. In a survey, 70 percent of employers say that the flexibility has helped them recruit better workers and keep employees engaged and motivated. In July 2014, this legislation was expanded again so that every company in the U.K. was required to offer and consider a request for flexible working arrangements from any employee (not just parents and caregivers). The law motivates and encourages employers to offer flexibility, with nine specific business reasons detailed for which an employee’s request might be turned down.  New Zealand and Australia also have similar “right to request” policies.

In June 2014, U.S. President Barack Obama issued a Presidential Memorandum directing every federal agency to expand access to flexible work schedules and give their employees the “right to request”. Within 120 days, federal agencies have to understand the new policies, comply, communicate and be ready to offer the program with its clearly defined process to their entire workforce. This will impact over four million federal employees.

“Most of our days consist of work, family, and not much else, and those two spheres are constantly interacting with each other.” ~Barack Obama, President of the United States

Similarly, New York City Comptroller, Scott Stringer, issued a 20-page report in June 2014, recommending “right to request” flexible work legislation for both the public and private sector in New York City.

“For New York City to remain an economic engine, it must actively compete with other global cities for top talent and business investment. Central to that effort is a collective realization that employers and employees benefit from policies that see family and work as complementary, rather than competitive parts of a balanced life.” ~Scott Stringer, Comptroller of New York City

“It’s time to do away with workplace policies that belong in a ‘Mad Men’ episode. By exploiting technology and acknowledging the many overlapping responsibilities workers face, businesses can boost productivity, improve employee morale, and act as model corporate citizens.” ~Barack Obama, President of the United States.