The Department of Labor forecasts a nearly 50% increase in the number of workers reaching retirement ages from 2004 to 2014 while 22 million workers over the age of 55 will leave the workforce during this time period. This will have a significant impact on your company’s ability to attract and retain talent. Companies will want to find ways to re-engage two sources of talent that are relatively untapped today: parents leaving the workforce to care for family and retirement age Baby Boomers wanting more time off. This article defines and provides case examples for using flexible work arrangements and on-ramp recruiting as a means to engage these talent pools.
Benefits and Flexibility Defined
A key tool for retaining and recruiting employees is flexible work arrangements. According to a Families and Work Institute report, 67% of employees report high levels of job satisfaction in organizations with high levels of workplace flexibility. Higher flexibility in turn leads to improved company performance, higher shareholder valuation, and higher job engagement and retention. Lack of flexibility is also one of the top cited factors why people leave a job.
Flexibility can mean many things to different audiences. Most people think about women leaving the workforce for work-life balance. Flexibility applies to other audiences as well: men find flexibility important though see taking advantage of flexibility as a stigma, Generation Y workers highly value their personal life, and aging Boomers enjoy the challenges found from working but are at a point in their careers where they want to make room to enjoy life. Flexibility can run the gamut in terms of structure. Options include flexible full time schedules, telecommuting, job sharing, seasonal schedules and part time and consulting arrangements. Donna Klein, President of Corporate Voices and previously Vice President of Workforce Effectiveness at Marriott says that the challenge in setting up flexibility programs is not seeing this as an accommodation or a solution for women, but seeing this as a core business practice for retaining talented, trained workers and setting a culture of flexibility.
Flexibility impacts three areas of a company’s performance: human capital outcomes, talent management and financial performance. First, flexibility increases employee satisfaction and commitment to the organization, and decreases stress, often a component in health related costs. Second, studies show that flexibility programs help retain and attract employees. Third, flexibility increases productivity and financial performance.
For example, IBM found that work-life balance was the second leading reason cited why employees leave; for mothers, it was the top reason. A client of mine has learned that they can best recruit experienced domain expertise by being open to hiring remote employees that telecommute, an arrangement that offers the candidates a great deal of flexibility. Deloitte quantified the costs of turnover of employees who would have left if they did not have flexible work and determined the company saved $41.5 million in one year alone by keeping seasoned talent. Additional examples of flexibility as a driver for improved company performance include Ernst & Young. They found that business units in the top quartile of People Commitment scores (more often those with flexible work programs) had revenue per person 7 percentage points better than the middle half and 20 percentage points better than the bottom quartile. First Tennessee Bank implemented focused cultures of flexibility in several branches and found employee retention was 50% higher in these branches, resulting in a 7% increase in customer retention which translated to $106 million profit over two years. These numbers clearly support the simple tenant that rewarding performance, not schedule, is good business. For more information on a business case and studies sharing qualitative and quantitative impacts of real workplace flexibility programs, visit the Corporate Voices website.
While president of a non-profit targeting development of women in technology, I often met with human resources departments of leading technology companies in Silicon Valley. I often was asked, “How do we attract and retain more women?” One major corporation wanted to change their culture which they described as not conducive to women. The HR executive then shared an example of one department with over 50% women that they were trying to replicate in other groups. To my question of what worked in this one group she said, “The manager, a man, has kids and is a ‘soccer Dad’. He is very in tune with the needs of parents and lets them have flexibility to take children to doctors’ appointments, care for them when they are sick, or attend soccer matches. The group is extremely productive and loyal, with high retention.”
Setting a culture for flexibility starts from the top. It includes empathy and mutual respect, management for employees and vice versa. The CEO and executive team needs to not only set the policy but also set the example. In moderating a group of senior level executives, one of the panelists was a Vice President of a Fortune 100 company leading a division with over 1,000 employees, and a single mom. She shared that in executive level meetings she would say, “I have to leave; it is 5:30 and I need to pick up my son/go to his game. It was hard to do the first few times but people got used to it.” In the audience, after the discussion, I talked to a woman from this executive’s department who said that this was much more difficult to do at the Manager level. The culture needs to be clearly established at the top and then replicated at each level to become accepted throughout the organization.
One key to flexibility is having a results-oriented environment where results are valued above schedule, meetings or face-time. It is not the time you put in; it is what results you achieve. Best Buy developed a methodology for Results Only Work Environment (ROWE) to combat high turnover from dissatisfaction with work life balance and career control among employees. Departments chose their own timeframes for training leaders and teams in the new program. The company saw 35% increase in productivity on average and a decrease in voluntary turnover from ROWE teams. See “Throwing Out the Rules of Work” by Patrick J. Kiger for more information.
There are many programs for increasing flexibility in the workplace, with a 2000-01 Hewitt Associates survey showing 73% of US employers offer flexible work arrangements. Employers in Silicon Valley have embraced flexibility in many forms. Here are a number of different programs to consider:
- Telecommuting
- Flexible work day start/end times
- Phased return from maternity leave – This allows an employee to start work on a reduced schedule. For example, reduce the schedule to 50% for the first 2 months after maternity leave and 75% the following 2 months. I personally know many hard working, loyal mothers who worked on reduced schedules at Silicon Valley companies including Google, Cisco, Accenture and Verisign.
- Job share – One executive shared that her job at Fleet Bank required 60 hours per week. By doing a job share, two people shared the one position and worked 25-30 hours each – and productivity soared. Hewlett-Packard and BEA have experienced great success with job shares, including at the executive levels.
- Part time roles – Flexperience Staffing is a newly formed staffing firm based in Silicon Valley working with companies to fill part-time and job share roles with talented workers.
ON-RAMP RECRUITING
On-ramp recruiting is the practice of recruiting people who have previously stepped out of the workforce, whether because of a family need for flexibility to care for children or parents, a retiree wanting to travel, or other reasons. This month I spoke on a Re-Entry panel addressing questions of Stanford Graduate School of Business women out of the workforce force for 2-20+ years. The audience included executives at the Vice President level reconsidering the workforce. How do you develop recruiting programs to target talent that has previously opted out of the workforce? What were reasons they opted out in the first place and how do you set a culture of flexibility to address the concerns?
Here are examples of programs that allow companies to reach out to employees who have opted out:
- Alumni networking and consulting programs – Companies recognize the value of trained employees and keep in close contact. Deloitte and Touche has a Personal Pursuits Program and Booz Allen Hamilton offers an Adjunct program. At a low cost, these programs allow companies to communicate with valuable former employees and keep the door open if they would like to return.
- On-ramp recruiting – Lehman Brothers, with Goldman Sachs and others following their lead, has a program targeting top women who have opted out of their careers. They hold regional events, inviting women to learn about the latest trends and network. Women interested in returning to work are invited to interview and others are connected through an Encore alumni group. In less than a year, Lehman hired 15 senior women through this program; Goldman Sachs hired 5 through a similar program.
Increased flexibility, beyond telecommuting and flexible hours, are powerful tools to effectively attract and retain talent in today’s changing workforce. Studies show that both men and women are increasingly following non-linear career paths. Developing ways to help careers progress with flexibility and along non-linear career paths, results in improved job satisfaction, recruiting and retention, and overall company performance.
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Sources for this article include the Flexibility Alliance, Corporate Voices, Family & Work Institute, the US Department of Labor, and Flexperience Staffing. Thank you especially to Amy Schlupp Nassisi of Flexibility Alliance and Sally Thornton of Flexperience Staffing for their insight, examples and editing. For additional information, data and examples of what companies are doing to promote flexibility in the workplace, please check out the websites of these companies or give me a call.