Employers Embracing Flexible Benefits As Morale Booster and Business Strategy

Stay informed and ready to meet both everyday challenges and long-term planning and policy-making goals, with focused news, practical information, and strategic insights on all HR-related developments.


In an effort to boost profits and meet the changing needs of an increasingly diverse employee population, U.S. employers are offering flexible work benefits that go beyond telework, human resources managers and workplace consultants told BNA July 12-18.

HR and talent management directors at organizations that offer employees flextime, compressed workweeks, shift flexibility, job sharing, and sabbaticals, said they are proving to be cost-effective morale boosters that benefit company bottom lines.

“We definitely are seeing employers implementing many [flexible work options], though not all of them,” Lois Backon, senior vice president of the Families and Work Institute in New York City, told BNA July 13. “There still is a disconnect between what employers offer and what employees want.”

Myriad Types of Flexible Arrangements

There is no one-size-fits-all approach to what companies are offering, sources said.

“We do not think of flexibility as a set of options, or an employee benefit, or even a program,” Marcee Harris Schwartz, the New York-based director of BDO USA's Flex program, told BNA July 13. “We really see it as a business strategy—a strategy that can help employees manage their own working life but that also can be used as a tool to help teams and leaders run their business.”

BDO, which has 2,500 employees in the United States, is a professional services firm that provides tax, financial and consulting services to companies worldwide. In 2008, it officially launched its BDO Flex initiative, which is geared toward the company's U.S. workers.

Schwartz stressed that the BDO Flex initiative does not include a checklist of flexible work arrangements from which employees must choose.

“We say, ‘You can do anything—work where, when, and how you want as long as it works for you and it works for the business, your team, and your clients,' ” she said.

At Santa Clara, Calif.-based Intel Corp., which has 44,209 employees in the United States, workers who complete seven years with the computing technology company are eligible to take eight-week sabbaticals with full pay.

“It's their time,” Dana Vandecoevering, Intel's corporate work-life manager, said of Intel employees who participate in the program. “Some go on vacations. Some take a class. Some do volunteer work. The idea is, it's a time to get away and get renewed and reinvigorated.”

Margolin, Winer & Evens, an accounting firm in Garden City, N.Y., established its summer sabbatical program for the company's 200 employees two years ago, said human resources director Robert Micera.

“This program gives people time off to do whatever they would like—be with family, go on vacation, or whatever it is,” Micera told BNA July 12. “It also saves the company money on labor expense.”

Under the accounting firm's sabbatical initiative, employees must take a minimum of four weeks off work, Micera said. “They must use their vacation time first,” he said, “and then the remaining time off they are reimbursed for 20 percent of their salary.”

The sabbatical program is an option the firm embraces instead of laying off workers, Micera said, noting that “the summer is a slower time period for us.”

At Menlo Innovations in Ann Arbor, Mich., company leaders created an open office environment in which each week employees share a computer with a different co-worker.

“The open space keeps the information, ideas, mentoring, and cross-training flowing all the time,” Richard Sheridan, Menlo's president and co-founder, told BNA.

He also said Menlo's 20 full-time employees are required not to work more than 40 hours a week and have the option of bringing their newborns to work— and leaving them there all day in the open space that co-workers share. “We've now raised five Menlo babies in our space,” Sheridan said.

The Michigan-based company, founded in 2001, has garnered recognition nationwide for its business success and flexible workplace initiatives, according to its website. Sheridan said that Menlo, which provided 200 guided tours to other company leaders last year, has created a work culture focused on “the business value of joy.”

“I need a creative, imaginative workforce,” Sheridan said. “I can't do that with tired, worn out, burned out people.”

When Deloitte Services, which employs 51,000 workers at its U.S. offices, took an intensive look at its flexible work arrangements in 2005 company leaders in part learned that “men were voicing more needs for flexibility as well” as women, said Molly Anderson, the firm's director of talent. Also, she said, different generations in Deloitte's workplace were requesting more flexibility related to work arrangements and benefits.

“We needed to start to change this idea that there's a one-size-fits-all career,” San Francisco-based Anderson said. “So we superseded our flexible work arrangement with a next-generation approach to flexibility that we called Mass Career Customization.”

This concept focuses on four core dimensions tied to employees' career development: pace, workload, location/schedule, and role, Anderson said.

With “pace,” the company asks workers to consider how fast they want to grow and accelerate their career. “Workload” addresses whether they will work full- or part-time, while location/schedule focuses on when and where an employee works. “Role” addresses what kind of responsibilities an employee has or wants at work.

“Companies are at a point where they recognize flexibility is something they have to invest in,” Anderson said. “They just can't invest using the old models, tools, and approaches. You really have to change your thinking and move to a much newer model if you are going to get the results you're after.”

Fewer Employers Offering Flexibility

Despite the enthusiasm of employers that offer flexible arrangements, recent studies have shown a decline in the number of companies embracing such strategies.

The Society for Human Resource Management's 2011 Employee Benefits research report said that “the United States must have a 21st-century workplace flexibility policy that meets the needs of both employers and employees” (29 HRR 725, 7/4/11). The report noted, however, that “[e]ven as technology has improved and the standard 40-hour work week has become dated at many companies, the number of organizations offering many forms of flexible working benefits has not changed much in the past five years.”

The number of employers that said they offer options such as flextime and ad-hoc telecommuting actually decreased from 2007 to 2011, the SHRM report stated.

It concluded that “perhaps cultural change will be needed more than logistical change if flexible work is to become more widespread in the U.S. economy.”

Meanwhile, a recent survey by Grant Thornton International found that the United States ranks ninth globally in terms of the percentage of companies offering flexible work arrangements to their employees (29 HRR 805, 7/25/11). Seventy-nine percent of U.S. companies allow flexible work arrangements, the survey revealed.

Telework 2011, a report released in June by WorldatWork in Scottsdale, Ariz., said that the total number of individuals who worked from home or remotely for an entire day at least once a month dropped to 26.2 million in 2010, from 33.7 million in 2008.

The report said this decline likely was because there were “fewer Americans in the workforce overall due to high unemployment, higher anxiety surrounding job security, and a lack of awareness of telework options.”

Best Practices

Experts on flexible work arrangements interviewed by BNA offered the following advice:

• Change the culture, not just the tools. “Recognize that you absolutely need the technology but you also need new management and leadership skills,” Anderson at Deloitte said. “For example, a lot of managers grew up learning to manage by walking around in an office, which works well when everyone is physically located there. But it doesn't hold up in a virtual world.” As a result, she said, supervisors and managers who oversee employees who are not physically located in an office must learn to “manage to results.” This, she said, involves focusing on the goals and accomplishments the business wants to achieve, and assessing employee performance based on the results produced.

• Build a business case for workplace flexibility. “Make sure line leaders are sponsoring and championing your work and working in partnership with HR and IT and other groups that were part of the change, so the business case and business benefits are really clear,” Anderson said. The SHRM report said, “Options like telecommuting and compressed workweeks may go a long way toward boosting workers' job satisfaction levels, but they will not succeed without executives and supervisors who buy into the plans.”

• Pay attention to generational differences. Across generations, various sources said, flexible work benefits are key to attracting and retaining talent. “Gen Y is dual centric; they see both career and work as important, and having a life outside career and work as important,” Anderson said. Meanwhile, she added, “the [baby] boomers want different career options and life options, too.” They are looking to remain in the workforce longer, Anderson said, or because they are living longer they want to continue making contributions in the workplace. Anderson described Gen X workers as “the sandwich generation” because “they are dealing with elder care and child care simultaneously.”

• Train managers. “One thing we hear from employers is every relationship in an organization is between the supervisor and the subordinate,” Backon at the Families and Work Institute said. “Therefore, management training on how to manage employees with flexible work arrangements is a huge challenge. Educate managers to implement work options that work for the team, the organization, and the individuals,” she said.

• Encourage different approaches. “A huge challenge organizations face is that flexibility [at work] is not always equitable,” Backon said. “Sometimes organizations get stuck in that madness in a need to ‘be fair.' What we have seen is some of the most innovative, best ideas are coming out of organizations that let the work group or team come up with a solution together.”

• Start small.“Companies feel like if they start with flexibility they have to really start with flexibility,” Backon said. “We really encourage small pilot projects with clear-cut assessments of objectives and outcomes you're looking for. You want to be able to measure something on a pilot or temporary basis before you roll out a large strategy.”

• Offer long- and short-term options. Schwartz at BDO USA said, “We try to distinguish and emphasize there are formal flex plans, which are structured and reflect long-term types of flexibility, but also there is day-to-day flexibility, like coming to work late if you've had a late night conference call or working from home because the plumber's coming over.”

• Allow some autonomy. “With formal flex plans, there's a set process and forms,” Schwartz said. “For the day-to-day flexibility, we have checklists of things to think about, like communicating with the relevant people when you are not in the office and letting them know how they can contact you if needed. But we try not to legislate too much and really let individuals, their bosses, and their teams do what makes sense for them.”

By Rhonda Smith