Retaining the best and brightest employees has been called a crisis, a talent war, a shortage and a talent drain. Whatever the definition, it’s not going away anytime soon.
Attracting and retaining talent continues to top the priority list of organizations of all sizes and industries. It’s the difference between success and failure, reaching quarterly targets—or not. High attrition cripples innovation, and customer service goes AWOL.
Recruiting the best and brightest is only half the game; retention is the other half. Competitors face the same issues. Gaining a competitive advantage is the key.
Inflexible work arrangements are a primary reason top talent leaves an organization.
"It used to be that an employee’s relationship with their manager was the No. 1 reason for employees voluntarily leaving an organization," says Kate Martiné, senior vice president, human resources and corporate communications for the Trustmark Cos. in Lake Forest, Illinois. "Now it’s a lack of employer work schedule flexibility. That’s the No. 1 reason."
Demographics paint a picture of a workforce in search of flexibility. A 2005 Merrill Lynch survey indicated 16 percent of the baby boomer workforce was looking for part-time work, and 42 percent would only take jobs that allow periods off for leisure.
A 2007 Pew Research Center survey notes that more than 50 percent of working mothers, committed to fulfilling their domestic responsibilities as well as contributing to the family income, prefer part-time work. And many Gen Xers and Gen Yers, while passionate about their careers, won’t sacrifice family and leisure for their career, according to the book When Generations Collide, by Lynne Lancaster and David Stillman.
Flexible work arrangements can be difficult to implement. The authors of this article surveyed six firms to discover how they are applying flex strategy. What follows are some key insights into what makes this strategy so successful.
Understanding your environment
Size doesn’t matter; it could be a small or large organization. The company’s age doesn’t make a difference. Corporate culture—entrepreneurial or traditional—doesn’t matter either. Yet several conditions seem to prompt organizations to reconfigure their work plans:
There’s a revenue or market-share crisis in the business; that is, the top and/or bottom line is thinning.
Organizational transformation is under way.
There are chronic shortages of qualified talent.
Outside organizations are "plundering" the incumbent employee population.
The organization realizes the high cost of turnover.
It’s the "natural" next step, given the underpinnings of the family-friendly culture.
While there may be many reasons for an organization to embrace more flexible work situations for employees, common arrangements include flex scheduling that accommodates doctor appointments or school visits.
Other arrangements include telecommuting one or more days per week; compressing workweeks from five days to four or three days per week; and job sharing.
Companies also are allowing more part-time scheduling. Employees may work full time a majority of the year and then work few if no hours during a portion of the year—like the traditional school year.
At Edward Hospital and Health Services, flexibility takes many forms. According to Betsy Roche, director of staffing of the Naperville, Illinois-based health care provider, employees’ work schedules range from 0.1 FTE (full-time equivalent) to 1.0 FTE and everything in between, particularly in those areas that require 24-hour shift work, such as nursing.
"We’ve been doing this for 20 years," Roche says.
Nine factors for success
If your organization operates more traditionally, you may wonder if flexible work arrangements can work for you, and how difficult they are to implement and manage. The authors identified nine factors for success in implementing alternative work arrangements.
1. Find your fit. Any alternative work arrangement (and for that matter, any talent management strategy) must make sense for the organization and the organization’s clients/customers. Does it fit? At Takeda Pharmaceuticals North America Inc., in Deerfield, Illinois, an employee seeking one of the organization’s five available work paths must be employed in a position suitable for an alternative work arrangement and must have demonstrated to their manager that they can manage such flexibility. It’s also important that the proposed work path won’t interfere with the effectiveness of work relationships.
"Flexible schedules are not a right—they’re a privilege," says Kelly Parr, work/life coordinator for First National Bank of Omaha in Omaha, Nebraska. First National was a winner for the sixth consecutive year in Working Mother magazine’s 2007 list of the "100 Best Companies for Working Mothers." Not every position is suited for an alternative work path. Some personalities can’t handle it either. Setting up sensible criteria will help organizations distinguish those who are fit for flexibility.
2. Focus on retention. Champions of flexible work arrangements need to keep their eyes on the "big picture" of employee retention: individual satisfaction. "If you have a high-potential employee requesting a flexible or reduced-hour work schedule, it makes sense to find a solution rather than stick to rigid rules," Trustmark’s Martiné says. "I would rather have 30 hours a week of a high-potential employee’s time than lose him or her and get zero hours. In cases like this, we prorate pay accordingly with the employee’s knowledge and understanding."
If you want high levels of employee satisfaction, your organization needs to recognize the overlap between life and work.
"If you want employees to bring both their heads and hearts to work, you can’t expect them to check their lives at the door," Martiné says.
Nicole Nehama Auerbach, partner and attorney at Katten Muchin Rosenman in Chicago, agrees. The law firm was a first-time winner in Working Mother’s 2007 list of the "100 Best Companies for Working Mothers."
"Employees are affected by life challenges, such as child care and elder care issues. You lose an enormous talent pool if you don’t face those issues head on," Auerbach says. "It’s not work life then home life. It’s life."
The old world is an organization telling employees how good they have it—in a sense, setting up the system and then doing a public relations campaign to convince employees how good it is. The new world, which focuses on the needs of the individual, takes into account what employees are really saying—what their needs are.
3. Clarify responsibility. In some cases, HR executives coach, counsel and monitor managers as they decide on eligibility for flexible work arrangements. In other cases, HR sets the guidelines, and department managers are responsible for appropriate implementation.
Whatever the chain of command, managers and HR should work together to develop and implement a plan. Involving HR helps managers gain perspective on how a flexible plan will benefit the organization.
"When you add up the cost of turnover—which includes the cost of talent acquisition, the cost of training and the decrease in productivity of a brand-new employee—and add that to the increased effectiveness of those on flexible work arrangements, you step back and say, ‘Doing this is a win-win,’ " Martiné says.
4. Invest in communication. Successful implementation of flexible work arrangements takes a commitment to communication. It’s important that both employee and manager have clear expectations for the new role. Managers must listen to what an employee’s underlying hopes are for a flexible plan: Better job productivity? More time with their family? Time to pursue their passions outside of work? Less stress from a decreased commute?
Mike Foutch, senior vice president of human resources at First National Bank of Omaha, says a key reason the bank’s organization has successfully implemented flexible work arrangements is a commitment to honest, two-way feedback.
To stay in touch with employees, many organizations conduct regular employee satisfaction surveys. Others set up one-on-one meetings with employees. During these meetings, manager and employee can review both sides of the flexible work plan and refine goals to ensure the plan continues to benefit the employee and employer.
5. Secure C-suite buy-in. No substantive initiative can be sustained without the buy-in of the CEO and executive management team.
Executive support demonstrates to the employees that the organization will do what it takes to make sure they are satisfied with and successful in their jobs. Managers will more willingly embrace and implement a flex schedule if the executive management team mandates it.
Foutch says that at First National Bank of Omaha, flexible work arrangements are accepted because "support for it comes down from the very top, including the executive management team and Rajive Johri, the president of the bank."
Katten’s Auerbach agrees. "The initiative has to start at the top, and it has to be sincere," she says. "You must be respected and valued, period."
Widespread organizational support for any flexible work initiative hinges on the value perceived by company executives.
6. Equip employees. Employees who opt for a flexible work arrangement need specific technology (like laptops, cell phones and PDAs) to do their jobs effectively, stay engaged with their team and be monitored by their manager.
One of the benefits of a flexible plan is employees can work nontraditional hours. But employers must make sure employees can be reached during work hours.
When Foutch started working a flex schedule, he and his manager set joint expectations—one of which was being reachable.
"I work very hard, but I work some odd hours," Foutch says. "When I need to attend a graduation or a ballgame, I do. But if something at work needs attention, I can be reached."
Some employees don’t know when to turn off their technology and are overwhelmed by being accessible 24/7. Managers need to set expectations for when they expect an employee to be reachable. A manager must also respect the employee and not place absurd demands simply because they work flex hours.
"Balance in employees’ lives must continue to be valued," Foutch says. "At the bank, we understand employees had downtime before flex scheduling was implemented, and they still need downtime now."
7. Employee self-management. Adjusting to a flex work schedule can take time.
According to Erica O’Malley, partner at Grant Thornton in Chicago, a first-time winner in Working Mother’s 2007 list of the "100 Best Companies for Working Mothers": "The person on the flexible work arrangement is typically their own worst enemy. It takes about three years to adjust to a flexible work arrangement. You need to learn what you should and should not do by going through it. It’s hard to be on a flexible work arrangement; you have to make a lot of decisions all the time."
Employees who choose a flexible work arrangement must be responsible for their work and be regularly accountable to a manager. To be eligible for flexible work schedules at Katten, employees have to be flexible themselves. An employee may be working 80 percent overall, but they may need to work at 120 percent on a particular project when a deadline is imminent, and then take a week off. Working 80 percent doesn’t necessarily ensure a set schedule of every Wednesday off, for instance.
Organizations might also consider having employees who want to participate in flexible work arrangements be responsible for reviewing the published guidelines and then submit a proposal for the arrangement.
8. Withhold value judgments. Organizations need to realize that working a flexible schedule isn’t "wrong"—nor is it a reflection of a person’s competency or dedication. Yet some corporate cultures take a dim view of employees who work nontraditional hours. They might be viewed as "lazy," "uncommitted," "lacking in direction" or "having misplaced priorities."
It takes corporate commitment to not make value judgments of employees who choose to work flexible hours. According to Patty Berman, director of talent management at Takeda Pharmaceuticals, a flexible work arrangement is to be considered "without judging the employee’s personal priorities."
If, for whatever reason, a flexible work schedule doesn’t work out, there shouldn’t be repercussions. Employees who lobby for flex schedules can find those schedules are difficult to manage. And many may even return to more traditional hours. Managers need to help smooth the transition back into more traditional roles.
9. Embrace the whole employee. Many organizations are realizing their success depends on the satisfaction of their employees. Takeda’s culture recognizes that "for its company to succeed, their people need to succeed—not just at work, but in all areas of their lives." To this end, the organization has permitted a variety of alternative work arrangements, such as job-share options.
One job share was created for an employee who, after becoming a mother, wanted to cut back her time at work. She proposed a job-share situation in which she and another part-time employee would split the job 50-50. They each work a set part-time schedule with one overlapping day for staff meetings and face-to-face interaction.
"These types of work arrangements made good business sense and are critical if you want to attract and retain the best talent," Berman says.
According to Tara Goff Kamradt, partner and attorney, "The leaders at Katten use the term ‘connectedness.’ "
"When you have a happy workforce that is connected and cared about and treated fairly," Katten’s Auerbach says, "then that workforce tends to go the extra mile naturally."
As with any new HR initiative, success takes time and experimentation. Listen to employees and respond accordingly, adjusting and adapting until getting it right. Once a successful program is in place, continue to mold it to meet the demands of the business and its employees.
This kind of flexibility begs an openness and willingness to work with the "whole person" for the good of the business, the customer and the employee.