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The Business Case for Implementing Work/Life Initiatives
Companies that expect to win against the competition require the best human capital and know-how to hire, coach and keep the finest people to create a consistent competitive advantage. Here is a compelling approach to cultivate talent and excellence in the workplace.
By Michael Morris, Ph.D.
Breaking Down the Walls
Corporate America is becoming increasingly concerned with assisting its greatest asset its employees to help them manage the complexity of their work/life issues. Companies have developed policies, procedures, and training programs to reinforce their concern for all aspects of an employee’s life not just work-related concerns. Being able to effectively integrate the work/life domains has become a leading employee concern. This is supported by research conducted since September 11 that suggests that more than 90 percent of employees fear that they spend too much time away from their families. Without doubt, today’s employees want and expect to have a life outside of work and smart companies know this.
Traditionally minded organizations who are insensitive to, or have ignored the need for work/life initiatives, erroneously believe that what goes on outside work is none of their business, that work/life issues are gender-based, or that they are too costly to implement. In stark contrast, progressive-minded companies that are sensitive to addressing their employee’s work/life issues are discovering that initiatives that are good for their employees are also good for them. Scores of studies examining the impact of work/life initiatives on employee performance have found outcomes such as stronger employee loyalty, increased productivity and profitability, and a reduction in operation costs. Progressive-minded companies consider work/life initiatives a “lever of change” for producing higher-ordered effectiveness.
Business and Workforce Changes Influencing the Need for Work/Life Initiatives
Change is occurring rapidly in the corporate landscape and this has influenced the need for work/life initiatives. First, the number of corporate layoffs, spin-offs, acquisitions, and mergers has increased dramatically over the past 10 to 15 years. Employees have faced incredibly stressful experiences such as downsizing, restructuring, leadership changes, and relocation. While the initial corporate intent of these change efforts was to bolster competitive and economic advantage, many organizations painfully realized that employees’ morale, motivation, loyalty commitment, and productivity have been compromised as a result.
A second change has been the increased corporate dependence on and expansion of sophisticated work processes requiring technology and a pool of skilled workers. Contrary to employers’ expectations, employees are not able to update their knowledge, skills and attitudes at the same pace of technological change. Compounding this is the overall decline of skilled and knowledgeable talent. The U.S. Department of Labor has indicated that the “lack of skilled labor is no longer just an inconvenience for business.” Companies are recognizing that a shrinking pool of talent means that gaining or maintaining a competitive advantage in the 21st century will be considerably more challenging. For example, studies indicate that by the year 2020, more than 80 percent of U.S. jobs will be service-oriented and 20 percent will be manual. Over the past 100 years, these percentages have inverted with today’s workers being expected to perform in six months what employees used to perform over a lifetime. Clearly, technology has expanded employee capacity, but it has also produced enormous demands.
A third change is the accelerated push toward globalization to achieve competitive advantage. Companies are going global in an effort to reduce costs, enhance profit and productivity. The highly effective global organization recognizes that globalization centers primarily on “how” to do business, not “where” to do business. The emphasis on “how” is process-oriented, and the expectations for workers have drastically changed. For example, employees must expand their capacity to work in heterogeneous environments (e.g., virtual teams), situations (e.g., multiple time zones) and with diverse stakeholders (e.g., co-workers, management, customers). Within the globalization context, work is conducted everyday, 24/7.
A final shift, and possibly the most compelling one influencing the need for work/life initiatives is the growing diversity of the workforce. Over the past 25 years, radical shifts have occurred in workforce demographics: decrease in the ratio of traditional families (i.e., husband as breadwinner, wife as homemaker) to dual-income families; more well-qualified women in the workforce; increase in the number of women returning to work post-pregnancy; increase in the percentage of families expected to provide care-giving to both children and aging parents; and the internationalization and aging of the workforce.
Five Business Case Reasons
Why Companies Should be Committed to Work/Life Initiatives
Over the past 10 years, companies have gotten smarter about the importance of offering creative work/life solutions. Pacesetting companies have clearly understood the strategic importance of these initiatives in contributing to their bottom-line.
1. Productivity Increases
The presence of work/life initiatives results in significantly increased corporate productivity through reduced absenteeism, tardiness, and turnover. Non-work-related issues such as community/civic involvements, children, marital situations, child- or elder-care issues influence a high percentage of absenteeism, tardiness and turnover. For example, absenteeism due to emergency care giving can cost employers, per year, (U.S.)$4,000 per employee with child-care responsibilities and (U.S.)$1,200 per employee with eldercare responsibilities. Proactive companies have boosted productivity by offering employees services such as temporary back-up/emergency care-giving centers, consortium centers, information and referral call centers (sometimes called Work/Life Resource Centers), and flex-time schedules to help them manage their non-work areas of concern.
2. Improved Recruitment and Retention, Reduced Turnover
In 1950, the average longevity of an employee with an organization was approximately 22 years. Today, the average tenure of an employee with an organization is just over three years. With the shrinking workforce talent pool, the need for companies to implement strategies to recruit, retain, and reduce turnover of their best-qualified talent has mushroomed. Becoming recognized as an “Employer of Choice” has become a strategic initiative for most work/life pacesetters. Studies have shown that companies with innovative and diverse work/life initiatives are extremely successful in finding and retaining the best talent. One nation-wide study found that scheduling flexibility was the single most important factor influencing new talent recruitment.
Turnover is expensive and seriously erodes the bottom line. Depending upon the exempt/non-exempt status of the employee, worker shortages can cost companies up to 350 percent of a position’s annual wages. Work/life initiatives such as telecommuting, rapid reimbursement plans for travel and educational assistance, care-giving subsidies, relocation services, and flexible work schedules have been hugely successful in securing and keeping the best of the best.
3. Improved Job Satisfaction, Commitment, Motivation, and Engagement
Every company benefits from employees who go the extra mile paying attention to minor details, correcting small problems before they become bigger, and exerting that last ounce of energy to please the customer. Happy, fulfilled, committed, motivated, and engaged employees exemplify this kind of effort. For the past 30 years, the Washington D.C.-based Gallup Organization has examined the U.S. workforce and determined that a majority of companies are not fully benefiting from the strengths and talents of their existing workforce. Gallup’s studies show that most companies are not implementing strategies to emotionally engage and compensate their workforce. Gallup has determined that while 30 percent of the U.S. workforce is engaged, another 20 percent is actively disengaged, costing the U.S. economy nearly $400 billion annually. Smart companies realize that one of the best ways to improve the bottom line is to assist employees to maintain their levels of engagement by being able to integrate their outside/non-work roles into their working roles through programs such as job-sharing and shift-swapping, educational and time-management workshops, e-newsletters that publicly recognize employees’ community service, and performance evaluations that award merit for employees’ extracurricular efforts.
4. Improved Corporate Image, Attracting Investors, and Enhancing Customer Satisfaction
Corporations benefit from the image associated with being sensitive to employees’ needs. Work/life initiatives allow corporations to put a “human face” on their corporate image, leading stakeholders to believe that if the company is good to their employees and communities, its code of conduct and value systems must be properly aligned. In today’s world of corporate scandal, investors are looking for signs within the workplace that point to corporate character, responsibility, and respect for others. Numerous studies have shown that when companies treat their employees well with progressive human resource programs such as work/life initiatives, stakeholder investment increases along with the long-term profits of the organization.
Pacesetting corporations who are committed to work/life initiatives also report higher customer satisfaction scores because their employees are not as distracted with the worries, anxieties, and turmoil of their non-work obligations. Engaged employees are better able to convert one-stop customers into satisfied customers, thereby bolstering profits per customer up to 100 percent. Employees greatly benefit from access to work/life initiatives such as elder-care services, after-school creativity camps, convenience services (e.g., dry-cleaning delivery, grocery shopping), and emergency/back-up transportation services that allow employees to be fully engaged in their work-related roles.
5. Retaining Women and Re-enlisting Aging Workforce.
Pacesetting companies have grasped the concept that work/life initiatives address “everyone’s issues.” demographically, the workforce is comprised of numerous groups, many of whom are seeking career development and advancement opportunities. Two examples include women and older workers. Nearly half of the U.S. workforce is female with a significant percentage of women transitioning into pivotal leadership roles. The glass ceiling effect that causes talented women to make career-limiting decisions is not good for business. A recent 2004 Catalyst report indicates that companies that have been reluctant to recruit, retain, and actively promote women are already experiencing negative bottom-line effects. The Catalyst study suggests that there is a positive correlation between bigger profits and the number of women found in senior leadership.
The number of older workers (18 million over age 55, or 20 percent of the workforce) will appreciate over the next decade. Progressive companies have recognized the significant intellectual capital being lost through retirements and, therefore, hedged their losses by initiating work/life initiatives such as gradual - or phased-retirement plans, mentoring programs, and flex- and part-time scheduling to accommodate the needs of later-life workers who remain interested in making valuable workforce contributions.
Pacesetting companies also utilize work/life initiatives to re-enlist workers who might otherwise exit the workforce. For example, when a major life/family transition arises, such as the birth of a new baby or expanded elder-care responsibilities, workers may believe that they are unable to maintain their former work schedule and choose to diminish that role to accommodate a greater non-work role. Employees who can access work/life initiatives such as telecommuting, concierge services, information through community service expos or fairs, long-term care insurance, assistance services (e.g., legal, mortgage, retirement, medical), and elder-care case management services, are better able to negotiate and integrate the competing interests of work/life demands.
In summary, work/life initiatives go far beyond the notion of being a “good or nice thing to do” for employees. They can be a strategic emphasis that aligns with the corporation’s values, norms, and culture. Work/life initiatives can enhance productivity; improve talent recruitment and employee retention; reduce turn-over; improve job satisfaction, employee commitment, motivation, and engagement; improve corporate image; attract investors; enhance customer satisfaction; encourage female loyalty; and re-enlist older employees. Employers and employees who partner to recognize and respond to the call of the “dual-agenda” (i.e., addressing work and non-work needs as equally important for employer and employee) are visionary leaders in unlocking corporate growth. They have learned that they can unleash the highest forms of performance potential from their human capital.
Work/life initiatives go beyond our former notions of just being a benefit, policy, procedure, or program. They advance how, where, and when world-class corporations are doing business…. and from all business indicators, they are doing it extremely well.