The Economic Benefits of a Flexible Workplace

Flextime, compressed work weeks, and other flexible scheduling policies allow people to work outside of traditional nine-to-five office hours. The internet, smart phones, home computers, and other technologies have made telecommuting an option for many workers, including government employees at the federal level and in states like Connecticut and Massachusetts. Other innovative models include job sharing, where two people split one full-time position; temporary arrangements to work part-time; and phased retirement, where older employees leave the workforce gradually instead of all at once.

This article explores the business case for implementing flexible workplace policies and the role such policies can play in state efforts to attract and retain skilled workers. To understand the particular dynamics in Rhode Island, the article draws on surveys conducted in 2012 with several hundred University of Rhode Island employees. The survey offers insight into the experiences of Rhode Island workers with regard to work-life balance, work schedules, and workplace flexibility, and how these factors impact outcomes on the job. Such insights can help inform our understanding of the benefits and challenges of creating and maintaining flexible workplaces.

THE GROWING DEMAND FOR A FLEXIBLE WORKPLACE

The Modern Workforce

The American labor force is dramatically different than it was a few decades ago. As more women have entered the workforce, we no longer live in an era dominated by the “breadwinner and caregiver” family model, but rather – by a three-to-one margin – by dual-earner households.¹ Over 70% of mothers with children under age 18 are working or looking for work, including 64% of those who have children under the age of six.⁶ People are working longer hours and report more workplace stress than in the past. ^(a)

As the privilege of having one parent serve as a full-time, stay-at-home caregiver becomes increasingly rare, people feel more challenged by the competing demands of work and family.^(b) For example, in 2008 60% of fathers in dual-earner households reported work-family conflict, compared to 35% of fathers in 1977.⁷ The inability to find affordable, quality child care is a key barrier to employment, especially for lower-wage workers.⁸ A 2014 study found that over half of those unemployed but able to work cited family responsibilities as a reason they were not working. Many would consider returning to work if they found a job with flexible hours, the option to work from home, or child care benefits.⁹ 

One in four families has to “tag team,” or work different shifts, to manage child care, and these are disproportionately lower wage workers. As legal scholar Joan Williams notes, “When faced with child care emergencies, tag-teaming families must make difficult choices as to whether the mother or the father will face discipline or discharge for taking time off to care for children.”¹⁰ 

As our population ages, workers are also increasingly involved in caring for elderly relatives, a responsibility that can present unique challenges.^(c) Elder care is often less predictable than child care, there are fewer services available, and care may take place in a different geographic location, presenting management challenges. It can also have a different emotional toll, as caring for someone who is losing their health and independence can be frustrating to negotiate and is often a long-term commitment fraught with emotional turmoil. Compared to the hopeful and growth-oriented task of raising children, caregiver stress is higher for those caring for aging parents or relatives, which can be a sad experience.¹¹

The Benefits of Flexibility

In response to demographic shifts in the labor force, there is growing interest in workplace policies that better meet the needs of 21^st century workers. These include not only schedule flexibility and telecommuting options, but also assistance with child and elder care needs, paid sick leave and family caregiving leave, and support for career shifts as workers’ life and family responsibilities change.^(d)

Research indicates that employers who respond to the work-life needs of their employees experience significant bottom-line benefits in terms of enhanced productivity; increased retention and reduced absenteeism; improvements in worker satisfaction, health, and stress levels; and even energy savings and reduced overhead costs.^1,3 Based on this research, in 2014 the White House Council of Economic Advisers urged the adoption of flexible work practices on a wider scale as a means to increase productivity, improve worker health, and
lower absenteeism and turnover.²

Although many employers initially have concerns about abuse and lowered productivity, those who have implemented flexibility policies in spite of these initial fears have, in fact, witnessed the opposite.^4,5 Raytheon implemented a compressed work week and saw improvements in recruitment, retention, and employee satisfaction, as well as a reduction in Friday traffic.⁴ Employees at Bristol-Myers Squibb who use flexible work arrangements score 30% lower on measures of stress and burnout than those who do not.³ At Eli Lily and Dell, teleworking and virtual call centers have increased productivity, loyalty, recruitment, and retention, and resulted in cost savings.⁴ Intel’s “new parent reintegration program,” which allows employees to adjust their hours after the birth of a child, resulted in similar benefits, as well as a boost to the company’s image.⁴

When the federal government expanded teleworking for its employees in 2010, it reaped similar benefits. The number of eligible federal employees who routinely telework doubled from 2009 to 2011.¹² A report from the Office of Personnel Management found that federal agencies involved in telework netted strategic value in terms of ensuring continuity of operations; reducing management costs, including cost savings in real estate, energy, and commuter subsidies; and improving employees’ ability to balance their work and life commitments.¹² The report also suggests increased efficiency, accountability, and a sense of empowerment among teleworkers.^(e) 

A flexible, family-supportive workplace can also serve as a strong recruitment and retention tool. It is the second highest priority for job seekers, right behind salary and benefits.³ How much control employees have over their work schedules has become recognized as a key indicator of overall employee satisfaction, and is correlated with positive indicators such as job satisfaction, organizational commitment, productivity, morale, and retention.¹³ One survey found that 76% of employees in organizations with more workplace flexibility and supervisory support for work-life challenges reported high job satisfaction, compared to 34% of those in workplaces with less flexibility and support. The same survey found that 76% of employees in workplaces with high flexibility and support plan to remain in their job for the next year, compared to 57% of those in organizations with less flexibility and support.¹⁴

Workplace flexibility can be especially beneficial for entry-level and low-wage employees, who tend to work in jobs that are more structured and offer fewer benefits and supports, and who often have limited resources for child care.¹⁵ Low-wage employees with fewer options and resources can be, in the words of Joan Williams, just “one sick child away from being fired.”¹⁰ In an analysis of low-income workers at 28 major U.S. companies, researchers found that commitment and engagement were 50% higher, stress and burnout were 45% lower, and intention to leave the organization within two years was 30% lower for workers with flexibility compared to those without.³

The Movement for a Flexible, Supportive Workplace

As major companies have begun to prioritize their employees’ needs for work-life balance, policymakers and economists are increasingly identifying a flexible, supportive workplace as critical to building a strong labor force and economy. The White House Council on Women and Girls launched a workplace flexibility initiative in 2010, hosting forums on the topic in Washington and across the country.¹⁶ In 2014, President Obama directed the heads of all federal agencies to implement comprehensive flexible work schedules and work-life programs.^(f) The Obama administration also dedicated more than $2.2 billion in fiscal year 2016 to support the development of state paid family and medical leave programs.¹⁷

There has been a groundswell of proposals in Congress addressing workplace flexibility and family leave. There are currently bills pending that would allow private-sector workers to accrue overtime hours to be used as paid time off; grant employees the right to request temporary or permanent changes to their work schedules (referred to as a “right to request” law); require employers to make reasonable accommodations for pregnant workers, just as they do for people with disabilities; establish a national paid family and medical leave insurance program funded by employee and employer contributions; and set a national paid sick days standard that allows workers to earn paid sick time.¹⁸ While these federal measures are not necessarily expected to advance in the short term, they represent a growing interest in this set of issues among lawmakers.

States and cities are also implementing policies to promote work-life balance. Rhode Island is one of three states in the country to implement a paid family leave program, which offers up to four weeks of employee-funded paid leave to workers to care for a seriously ill family member or a newly arrived child.¹⁹ While Rhode Island is not one of the 14 states that currently require employers to provide reasonable accommodations to pregnant
workers, it does have two of the five cities nationwide – Providence and Central Falls – that have enacted such legislation.²⁰ Several states, including Connecticut and Massachusetts, allow state employees to telecommute and those two states, along with California, also have laws enabling workers to earn paid sick leave.²¹ “Right to request” laws were passed in Vermont and San Francisco in 2014 and are being considered in New York City and Berkeley, California.²²

WORKPLACE FLEXIBILITY AT THE UNIVERSITY OF RHODE ISLAND

In an effort to better understand the needs of Rhode Island workers with regards to work-life balance and workplace flexibility, social scientists at URI’s Schmidt Labor Research Center (SLRC) conducted an extensive survey with URI staff employees in the spring of 2012. The survey covered topics such as caregiving responsibilities, work schedules, attitudes toward job and workplace, access to support for work-life balance, and perspectives on integrating work and life.

The 825 URI employees who responded to the survey (a response rate of 44%) represented a variety of income levels and job types, from grounds maintenance to faculty, dining services to school administration. The majority of the respondents were female (72%), white (93%), partnered or married (73%), and had at least a college degree (64%).

The perspectives of such a large sample of university employees can offer valuable insight into the experiences of Rhode Island workers as a whole. URI is a multifaceted organization spread across four campuses, with a large employee base representing wide ranges in income, education, skill level, and job type. Workplace flexibility policies vary across the institution, as each department and unit independently determines its own policies and practices in coordination with the ten different labor unions representing URI employees.

Schedules & Worker Satisfaction

Just over half (53%) of the survey respondents worked a regular, fixed schedule, while the remainder had some type of flexibility built into their schedule. When asked what type of schedule would best meet their needs, only 6% chose a regular fixed schedule (for an explanation of different schedule types, see Figure 4). This mismatch between actual and desired work schedules affects worker satisfaction: those who worked a regular, fixed schedule were significantly less satisfied with their schedule and felt they had less control over their schedule than those with some type of flexibility. Employees who worked a daily, as needed flex schedule were the most satisfied.

Most employees indicated that they had little intention to leave their jobs in the next year. When asked what factors might give them reason to consider leaving, the top responses were increases in salary, benefits, or job advancement. Inadequate workplace flexibility ranked eighth out of eighteen factors, which may reflect the fact that nearly half of respondents already have some flexibility in their jobs. Employees with a fixed work schedule were significantly more likely to indicate that inadequately flexible work options might lead them to consider leaving their job.^(g)

According to the survey, URI employees in higher income brackets are more likely to have flexible work schedules. About two-thirds (65%) of those making under $40,000 a year worked a fixed schedule compared to about half (51%) of those earning over $40,000. The higher earners reported greater job satisfaction and supervisory support for work-life challenges, while the lower earners reported higher levels of stress and were more likely to leave their jobs because of inadequate flexibility options (all of these findings were statistically significant).

Statistical analyses controlling for income indicates that those on some type of flex schedule –regardless of their income level – reported greater job satisfaction and organizational commitment, more control over their work schedules, higher satisfaction with their work schedules and child care arrangements, and a work climate that is more supportive of their work-life needs (see Figure 5).

What Workers Want

In order to learn more about what policies and practices would be most beneficial to workers, survey respondents were given a menu of 15 work-life supports and asked which would be helpful to them as individuals and to URI employees as a whole. The list included options related to schedule flexibility as well as other work-life balance programs, such as paid family leave and financial assistance for caregiving.

Schedule flexibility options were ranked as most helpful for URI workers, with daily and regular flextime coming in first and second and a compressed work week fourth on the list. When asked about their own personal needs, fully 89% of respondents agreed or strongly agreed that daily, as needed flextime would be helpful to them personally, with women agreeing to this significantly more than men. Three-quarters of respondents agreed or strongly agreed that regular, scheduled flextime and compressed work weeks would be helpful to them personally, and 63% agreed or strongly agreed that telecommuting would be helpful (again with women significantly more likely to agree than men).

WORK-LIFE BALANCE AMONG DIFFERENT KINDS OF WORKERS AND CAREGIVERS

Gender

While flexible work options are valuable to all employees, they can be particularly salient for women, who still shoulder the majority of caregiving responsibilities. Women who responded to the survey were more aware of the workplace flexibility options available at URI, and were more interested than men in options like daily flex time and telecommuting. When asked what factors might lead them to consider leaving their job, women were more likely than men to point to work-life balance issues such as difficulty finding quality child or elder care, conflicts between work and family, inadequate flexible work options, and relocation for their partner’s job.

Though women reported more concern about work-life balance and interest in workplace flexibility options, both men and women reported feeling pressure to balance work and family. When asked what issues had been a source of stress over the past two years, the most common response from both genders was challenges balancing work and family responsibilities. In fact, this was the only source of stress that was more commonly reported by men than women. Women reported several other sources of stress that impacted them significantly more than men, including managing household responsibilities, caring for an elderly relative, children’s problems, lack of personal time, and being part of a dual earner couple.

Overall, women in the survey expressed greater job satisfaction and organizational commitment than men. While they were somewhat more likely to feel overworked, women did not report more work-life conflict than men. This reflects national findings that men are increasing their participation in family care, and experiencing a corresponding increase in levels of work-life conflict.¹

Union Membership

Ten different labor unions are represented at URI, and access to flexible schedules and other worklife balance policies varies significantly depending on the union to which workers belong. About half of employees in the survey were members of Council on Postsecondary Education unions (the Professional Staff Association (PSA) or Professional Technical & Administrative Association (PTAA)) or were not affiliated with a union (mostly employees in administrative positions). In addition to having access to six weeks of employer-provided paid parental leave, over half of these employees report having a flexible work schedule.^(h) In contrast, among employees who belong to other unions – the most common being Council 94 (the Association of Federal, State, County, & Municipal Employees) and ACT/URI-NEA (the Association of Technical-Clericals, National Education Association) – less than a third have flexible schedules and none have access to employer-provided paid parental leave.

In comparison to the PSA, PTAA, and nonunion employees, those who belong to Council 94, Local 528 and ACT/URI-NEA tend to have more structured jobs that allow for less schedule flexibility. Not surprisingly, they reporting feeling less control over their schedules and less support from their work environment for work-life needs. However, these same employees feel the least overworked and report the least work-life conflict. It is possible that workers without many options for workplace flexibility and work-life balance may, paradoxically, experience less stress about these issues simply because they do not have the ability to choose anything different.

Elder Care

As our population ages, more workers are taking on the responsibility of caring for elderly family members, particularly in Rhode Island, which has an older population than most other states.⁽ⁱ⁾ One-third of URI employees in our survey had assumed elder care responsibilities in the past year. More striking, nearly half reported that it is likely they will have to take on elder care responsibilities within the next five years (see Figure 9).

The responsibility of caring for elderly relatives is less likely to be shared among family members. While 54% of survey respondents indicated they shared child care responsibilities equally, only 23% shared elder care responsibilities equally. While a third of those with child care responsibilities took on most or all child care alone, fully half of elder caregivers did so.

It appears that the needs of elder caregivers may be less recognized by employers, who have traditionally focused on working parents. Survey respondents caring for elderly relatives reported receiving less organizational support for their caregiving and work-life challenges than those caring for children. Compared to child caregivers, elder caregivers had less control over their work schedules, though this may be because older workers – who are more likely to be faced with caring for a parent or other elderly relative – are generally more likely to be in less flexible jobs.

Interestingly, elder caregivers experienced certain negative outcomes at higher rates than non-caregivers, while child caregivers were not more likely to experience these negative outcomes than non-caregivers. Elder caregivers reported higher levels of work-life conflict, stress, and feeling overworked; lower satisfaction with their work schedules; and less organizational support for work-life balance. Because elder care may be more difficult to arrange, oversee, and evaluate than child care, there is less certainty about the quality of care. In our sample, 28% of elder caregivers were not sure whether they were satisfied with their care arrangements, more than twice the share that were unsure about their child care arrangements.

IMPLICATIONS FOR RHODE ISLAND

As Rhode Island has struggled to fully recover from the economic downturn, state leaders have identified building and retaining a skilled workforce and attracting businesses to the state as key goals. While many economic initiatives in the state prioritize the need to build a strong employee base, they almost exclusively focus on bringing in, training, and retaining skilled employees, and do not address a parallel need to retool workplace policies to attract workers and keep them happy and productive.

Our survey of a broad swath of URI staff presents a compelling picture of the importance of workplace flexibility to Rhode Island workers. Survey respondents expressed a clear preference for flexible work schedules and those with greater flexibility were more satisfied with their jobs, felt more support from their employers, and reported greater satisfaction with their child care arrangements. These findings align with national and international research demonstrating the value of work-life balance for employees.

Rhode Island businesses have begun to take notice of employees’ needs for a more balanced workplace. Hasbro, a major employer in the state, offers workers half-day Fridays, competitive paid time off and family leave policies, and a variety of flexible work schedule options. Six Rhode Island-based businesses have been awarded the Alfred P. Sloan Award for Business Excellence in Workplace Flexibility, including the local offices of multinational corporation KPMG, as well as small businesses like Embolden, a Pawtucket-based digital communications firm with under 25 employees that is a three-time winner of the award.

As a state, Rhode Island has historically shown a willingness to lead on issues related to equitable workplace policies. Rhode Island was the first state to enact temporary disability insurance (in 1948) and among the first to enact breastfeeding-in-the-workplace legislation (in 2003)^23,24 At the same time, however, Rhode Island lags behind neighboring states Connecticut and Massachusetts when it comes to telecommuting and comprehensive sick leave laws.

What can the state do to continue being a leader in policies that foster positive workplaces and satisfied, productive workers? Options include a “right to request” flexibility law, a telecommuting policy for state workers, union contract modifications that broaden the definition of a work-week, a comprehensive sick leave law, or broader support for child care subsidies^(j) Rhode Island’s forward-thinking paid family leave program could be expanded to state workers, who make up approximately 20% of the state’s workforce but are currently ineligible for this benefit.^(k) State agencies might also consider offering work-life education and training initiatives to employers about how to provide work-life supports to employees and tailor policies to meet particular organizational and operational needs.