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The Future of Flex

January 27, 2010
Employees who opt for flexible work arrangements have traditionally coped with the stereotype that they are not as committed to their jobs as their counterparts who go to the office every day.

This became eminently clear once again in June when Jack Welch, the former CEO of General Electric, told attendees at the annual Society for Human Resource Management conference that “there’s no such thing as work/life balance.” “There are work/life choices, and you make them, and they have consequences,” he told attendees.

While this kind of thinking has dominated many workplaces, that has changed during the recession, work/life experts say.

In an effort to reduce costs, a number of companies and public-sector employers have either mandated or allowed reduced workweeks, telecommuting and other flexible work schedules, experts say.

As a result, these experts predict that employers may realize the business case behind offering flexible work arrangements and keep these programs in place after the economic recovery.

In a recent survey by the Families and Work Institute, 81 percent of employers said they were maintaining their flexible work programs during the recession, while 12 percent had increased these programs and 6 percent were cutting back.

“This says to me that employers are increasingly seeing flexibility as something that can help the organization,” says Ellen Galinsky, president and co-founder of the Families and Work Institute.

In researching her recent book, Top Talent: Keeping Performance When Business Is Down, Sylvia Ann Hewlett, an economist and president of the Center for Work-Life Policy, found that at many organizations, flexible work programs are being repositioned as a cost saver rather than as an accommodation for their staffs.

“Companies are seeing these programs as something central to the business strategy and fully endorsed for both men and women,” she says.

In her book, she cites KPMG in the United Kingdom as a case study of a company that reaped the benefits of offering flexibility. In January 2009, the company needed to reduce costs and decided to use flexible work options as a way of doing it, launching Flexible Futures. Hewlett interviewed Rachel Campbell, head of people for KPMG Europe and the architect of Flexible Futures.

The program gave employees four options to choose from in principle: Elect to go to a four-day workweek and take a 20 percent salary reduction; take a two- to 12-week sabbatical, depending on their role and needs, at 30 percent of pay; sign up for both of those options; or continue with their regular schedule.

Eighty-five percent of the 11,500 U.K. employees agreed to the reduced-work plan. Half of that group signed up for both the sabbatical and the four-day workweek.

“Professional staff were time-starved, and the same percentage of both men and women opted for that choice,” Hewlett says.

Since so many people agreed in principle to the plans, KPMG was able to cap the salary cut at about 10 percent for the year in most cases, says Mark Hamilton, a spokesman in the London office of KPMG. So far, about 2,000 employees—20 percent of the firm—have gone onto the plan, Hamilton says. As a result of the plan, which gave the firm the capacity to cut staff costs by around 15 percent if fully implemented, KPMG didn’t have to conduct large-scale layoffs.

KPMG plans to offer the program until September 2010, but hasn’t decided whether it will be offered after that, Hamilton says.

“Companies have had success with reducing costs by offering flexibility, so this might be part of a reality going forward,” Hewlett says.

It will be interesting to see whether employers look back at the recession to develop the business case behind flexible work arrangements, says Laura Sabattini, director in the research department of New York-based Catalyst.

    “Some companies may look at what they did during these tough economic times and realize there is no reason to go back from offering these programs,” she says.

Workforce Management, January 2010, p. 19 -- Subscribe Now!