Report: why flexible schedules benefit businesses

Flexible work options make for happier employees, but managers often need more than personal anecdotes to be persuaded that flexibility won't harm the bottom line.

A new report finds that, in fact, it does help profitability, based on internal data drawn from 28 major firms. The companies - members of Corporate Voices for Working Families (CVWF), the nonprofit partnership that published the report - were willing to go public to show how various flex programs positively affected everything from employee retention to customer service.

A few examples from the report released Tuesday:

• Professional services firm Deloitte saved $41.5 million in employee turnover costs in 2003, based on the number of professionals who said they would have left if they didn't have flexible work hours.

• Pharmaceutical company AstraZeneca found that "commitment scores" - measures of employee attitudes that affect their effort and performance - were 28 percent higher for employees who said they had the flexibility they needed than for those who said they did not.

• A pilot program at a PNC Financial Services Group operations center compressed each employee's workweek into four 10-hour days. Because of employees' cross-training and staggered days, customers were served for an extra hour and a half each day, and the time for completing certain transactions was cut by 50 percent or more. Absenteeism and turnover declined.

"Flexibility does have a direct link to productivity and financial performance," says Donna Klein, CVWF's president and CEO. "For the first time, this really significantly challenges the misperception that flexibility is an accommodation."

Rather than treat it as an opportunity only for employees who need adjustments because of personal circumstances, Ms. Klein says, companies should see the creation of a flexible work environment as a core management skill.

That shift is under way at PNC, says Kathleen D'Appolonia, a senior vice president who oversees corporate recruiting at the Pittsburgh-based firm. Some 2,000 employees out of 23,000 work a compressed week, and more than half use flexible hours or other options increasingly available at PNC in the past 10 years.

During that time, she says, there's been a dramatic change in attitudes. Flexibility used to be referred to as "alternative work arrangements," but now the language reflects that it's mainstream.

Ms. D'Appolonia also sees more accountability among workers. "Employees are now educated about their responsibility in making this work.... [They] know it doesn't matter why they want flexibility. For the business, it just matters that employees are best able to contribute and be productive so that the customers and internal shareholders are served."

In PNC's pilot program, for instance, most of the employees had long commutes, so the manager told them that they could work four-day weeks if they could train one another and figure out how to meet objectives with their new schedules.

"That caused the employees to have ownership in the business results, and that's really where the productivity increases came from," D'Appolonia says.

Despite such evidence supporting flexibility, "changing a whole corporate culture is like turning a giant ship in the ocean," says Carol Evans, CEO of Working Mother Media.

Fewer than half of all companies in the United States offer flextime plans, and two-thirds of working mothers say there's a stigma attached to using flexible work options, according to Working Mother magazine. "There is still a lot of internal debate," Ms. Evans says. "Companies are conflicted, and working mothers are very rightly reading those conflicted messages."

Her hope is that businesses see incentives for flexibility through efforts such as the magazine's annual list of the 100 best companies for working mothers, published in October. This year, the survey gave more weight to flexibility scores, Evans says, because working mothers say it's a top issue.

CVWF is planning a congressional briefing on its findings and intends to circulate a set of guiding principles for implementing and monitoring workplace flexibility.

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