Menu

10 Minutes
on updating flexibility strategies
November 2011

Approaches that meet real employee and employer needs

Highlights Not all flexibility policies are working well. Valuable employees, for one, are discovering that work anywhere, anytime approaches can lead to burnout. Diversity and innovation goals are increasingly linked to flexibility approaches. Companies where all employees look, think and work alike are disadvantaged in complex and competitive global markets. New approaches being tried by innovative companies are thought-provoking and encouraging, but more work needs to be done. PwC convened 600 business executives to discuss flexibility and talent management in June 2011. Six suggestions emerged to improve workplace flexibility. (See page 04)

Flexibility over time and place has long been one of the best incentives companies can offer to attract and retain employees. Yet even as these options near standard practice among top US companies, not all employees find they are able to participate. Some dont even think they can without damaging their careers. What many employers are discovering is that offering just one or two flexibility options no longer suffices. By definition, flexibility should mean taking a more comprehensive approach toward matching the business growth goals with employee capabilities and needs. The best of them recognize that all employees can benefit and that at times, many will need flexibility programs. Flexibility is not an added benefit, nor is it an entitlement. The workplace is changing, and so is the technology we use to work. Flexibility is thus about giving people the ability to accomplish tasks and goals in multiple ways with multiple arrangements.

Increase engagement and loyalty 1. Flexibility involves more than top-down setting of hours or work arrangements. Greater autonomy over time and tasks leads to better performance. 2. Broadening access to flexibility options for employees helps create a culture that focuses more on results and less on where or when the work is done. 3. Companies with right mix will find they are rewarded with greater productivity. Some companies are cutting turnover by allowing employees to design work hours with their managers. 4. Well-structured flexibility policies address rising talent challenges. Take the nearing retirement of many boomers as an example: Americans 45-64 years old represented 26.4% of US population in 2010, a 31.5% increase from the 2000 census.

 Menu

At a glance
Acknowledge the diversity of today's employees, and the diversity that they want Whos who at work Theyre women
Close to half of the workforce in the US are women

and working parents

48% of children are in households where all parents work full-time

and are increasingly with eldercare more diverse responsibilities

More than half of US population growth between 20002010 is due to Hispanic population increase Nearly 1/5 of employees currently provide care to a person 65 years and older

while more are nearing retirement age themselves

People 55 years old or older projected to reach nearly 25% of US labor force in 2018

And what they really think about flexibility Flexibility involves career trade-offs
41% believe they have to choose between job advancement or devoting attention to their family or personal lives

but its still important

55% of Fortune 500 executives said they're willing to sacrifice their income for more time outside of work

for men as well as women

74% of men are interested in flexible options

and the younger they are, the more they expect it

66% of recent graduates expect to work regular office hours with some measure of flexibility

especially as traditional retirement notions fade

75% expect to work for pay even after they retire

Sources: Families and Work Institute's "2008 National Study of the Changing Workforce"; White House Council of Economic Advisers' March 2010 "Work-Life Balance and the Economics of Workplace Flexibility"; Boston College Center for Work & Family's 2008 " Overcoming the Implementation Gap"; Pew Research Center's 2006 "Working After Retirement: The Gap Between Expectations and Reality", Bain & Company's 2010 "Flexible Work Models: How to bring sustainability in a 24/7 world"; Karen K. Myers and Kamyab Sadaghiani, Journal of Business and Psychology, 2010 June, "Millennials in the Workplace: A Communication Perspective on Millennials Organizational Relationships and Performance"; and, PwC's 2008 "Managing Tomorrow's People".

 Menu

01
Flexibility is a productivity tool, not a benefit
Common flexibility options Percentage of employees with access to flexibility options
in order of popularity

Offering some form of flexibility in the workday for at least some employees is nearing standard practice. Over a third of employees, for example, are now able to exert some control over their workday schedules. Most employers recognize that flexibility matters to an overwhelming majority of employees. Yet not all policies are equally effective. In fact, the opposite can be true. Valuable employees are discovering flexibility can create a fast path to burnout. Employers often reward good employees with more work, and the very tools that allow workplace flexibility to flourish are perversely binding some employees to their virtual desks at all hours, and in the end impacting productivity. How then can businesses become more responsive to the people in their organizations? Appreciate that when it comes to flexibility, people will take a lot of their signals from how their business leaders talk about flexibility policies, whether as a way to better performance or as a cost. How leaders behave matters a lot too. Employees will not unplug if their superiors are unable to show the same discipline. A vice president who routinely contacts subordinates over the weekend shouldnt be surprised to find that behaviour cascading down the organization. Solutions dont have to be complex for an outsized impact. One executive we know delays sending offhours emails, creating a queue instead for delivery during the business day. What hes really doing is setting a clear demarcation between work and family time, freeing employees to focus accordingly.

Linked to performance goals Integrating aspects of flexibility with the performance management system will enable effectiveness. Some companies are tackling turnover rates by allowing employees to design their work hours directly with their managers. The policy is thus not treated as a top-down benefit that managers then have to schedule around, but an important part of an open dialogue centered around the business goals, employee productivity and employee needs. It is the kind of bold thinking about flexibility policies and a culture of flexibility that can differentiate a workplace. Work-life fit over balance If flexibility is not integrated with performance, managers will sense a loss of control and employees may fear punishment and decide not to make use of the options. Poorly-executed programs abound with such unintended consequences. To Ellen Galinsky, President of the Families and Work Institute, flexibility policies should not expect to perfectly balance work and family demandsa tall orderbut rather, to recognize that there needs to be a work-life fit, and that at times in their lives, employees will seek more flexibility. Recognize that the work-life fit is part of the talent agenda and make sure that you value the persons whole agenda when youre doing a performance review.

Paid vacations for full-time employees Change daily schedule on short notice Traditional flextime Move between part and full time Compressed work weeks Employees able to job share Reduced time Flexplace Work from home at least one day a week Work from home nearly all the time
3% 18% 45% 44% 36% 33%

86% 84%

16%
15%

Source: Galinsky, E., Sakai, K., and Wigton, T. From research to action in workplace flexibility: Lessons in bringing about workplace change. The Future of Children, 21(2), 109-129. (in press, Oct. 2011)

 Menu

02
New approaches improve participation, foster commitment
Four generations in the workforce. Rising multinationals from emerging markets doing business in the US. Non-traditional families becoming the new majority. All these spell a more diverse make-up of the workforceand demand updated flexibility strategies that work for employees and employers. Diversity and flexibility goals are merging. Reliance on traditional flexibility approaches means not getting the best out of everyone in your organization. Part-time approaches for retirees The age shift in the US workplace is of considerable concern: 52% of US CEOs believe employee retirements are creating a key challenge for their business.1 To mitigate the loss of expertise, The Dow Chemical Company set up a program to allow employees to transition into retirement by telecommuting, job sharing or adopting a parttime schedule. Importantly, the employees kept their benefits. The flexibility program, along with some other work-life measures, have increased engagement and attracted strong candidates.2 Families are changing Its important to get inclusivity right. The American family is changing: everyone needs flexibility, not just working mothers. In fact, non-traditional families are the new majority. Meanwhile, traditional flexibility approaches have not always made everyone in the organization feel they have the same rights to the programs. A recent global survey found that 25% of employees in developed countries do not make use of any flexible work arrangement.3 Men can fall readily into this camp, as can employees without children. Bain & Co. recently tried to quantify demand for flexibility and found that while 74% of men are interested in flexible arrangements, only 21% have used those options.4 Perhaps the best way to break this cycle is for men in leadership roles to recognize they are important role models to improve participation in and relevancy of flexibility. If flexibility is seen as non-inclusive, the focus can shift away from empowering people to take responsibility over their work. And the company sends the wrong message about what constitutes high performance and organizational commitment.

Where CEOs are changing strategies to retain more retirees US Canada Mexico Brazil UK Germany Russia China India Australia
No change 73% 75% 71% 50% 40% 40% Some/significant change 73% 40% 51% 38% 27% 23% 29% 46% 53% 60% 27% 60% 49% 63%

Source: Responses in answer to: "To what extent do you plan to change your people strategy to... increasingly recruit and attempt to retain older workers? Base: 1,201 surveyed in PwC's 14th Annual CEO Survey, 2011

1 PwC, 14th Annual Global CEO Survey, 2011, shows 56% of US-based CEOs concerned over limited supply of candidates with the right skills 2 Families and Work Institute/SHRM, The 2011 Guide to Bold New Ideas for Making Work Work 3 Linkow and Jan Civian, Men and Work-Life Integration, a Global Study, WFD Consulting with WorldatWorks Alliance, May 2011 4 Bain & Company, Flexible Work Models: How to bring sustainability in a 24/7 world, October 2010

 Menu

03
Flexibility is about creating a culture of opportunity
As the contours of a truly flexible work environment are better understood, leading companies realize that flexibility is about accommodating how people can do their best work, and that can mean allowing more control over the substance and scope of their work, and even who to work with. These approaches get much closer to what motivates people to work hard and work well. Competitive pay is important, but not enough to keep good employees and attract needed talent. In todays market, most top candidates, for example, are not going to relocate just for the money, Tom Moran, managing partner for Insurance Americas and co-managing partner for Financial Services NA at Heidrick & Struggles, told us. People will take a risk for a company where there is a proven culture of opportunity, specifically those that offer the flexibility to pursue alternative career paths that result in advancement and overall retention of top talent. Pay more to take money off the table
48% 35% 65%

business? At the outset, flexibility programs should be crafted to deliver the end result. For example, companies where innovation is significant in driving new growth know that innovators perform better with more control over their time and projects. Thus Google and 3M have each embraced policies that allow employees to spend some of their time harnessing their passion. One idea that is spreading like wildfire, according to Pink, adopts what Australian software company Atlassian calls FedEx days, where employees are given a day to tackle a problem and have to present the solution to peers by the next day. A similar strategy at Intuit resulted in seven employee-created mobile apps before the software company started formally funding any mobile projects, according to Pink . Innovative companies have had a head start on true flexibility, but more work needs to be done. We are in the early stages, and different industries are moving at different paces. Law firms, for example, have long struggled to balance flex options with the demands of the partner track. Recently, a senior partner tasked with studying flexibility in the legal profession warned, we are in danger of seeing law firms evolve into institutions where only those who have no family responsibilitiesor worse, who are willing to abandon those responsibilities can thrive.5

Where CEOs are changing strategies to retain more women US Canada Mexico Brazil UK Germany Russia China India Australia
No change 84% 80% 53% 62% 63% 51% 58% 58% 59% 16% 15% 38% 38% 49% 43% 42% 39%

Some/significant change

Source: Responses in answer to: "To what extent do you plan to change your people strategy to... increasingly recruit and attempt to retain more women? Base: 1,201 surveyed in PwC's 14th Annual CEO Survey, 2011

High-performing companies pay above market wages, releasing people to focus on the work and not the money, notes author Daniel Pink, author of Drive: The surprising truth about what motivates us. In his view, enduring motivators are created when employees have more autonomy over their tasks, more opportunity to master their field and find purpose in their work. So how do companies create such conditions while enhancingand not losingthe focus on the

5 Lauren Stiller Rikleen, From Here to Flexibility in Law Firms: Can It Be Done? MIT Workplace Center Seminar Series, 2004

 Menu

04
Business works when life works
The very way we work is changing. We know this intuitively as we juggle the demands of a 24-hour, hyper-connected world at work and in our personal lives. This culture didnt start in the office, but it is changing the business workday irrevocably. With turnover rates for high performers up to 4.3% in 2010, and reversing a trend that began in 2007, improving employee engagement can be an organizations best ally.6 Research shows, and our experience confirms, that deeper employee engagement is related to improved retention, customer loyalty, revenue, sales and profit.7 Effective flexibility policies are important to recruitment strategies today too. Among senior executives the need for flexibility has increased by an order of magnitude over the past ten years, Al Delattre, managing director for technology at talent management group Korn/Ferry, told us. The topics that get included in the compensation discussion continue to grow over how people will work, what their role is and how to balance that with other things. For younger recruits, flexibility discussions more often involve how companies can help them develop their skills and embark on a meaningful career path. Making over approaches to flexibility is thus about lifting barriers employees face to their progress as well as responding to modern approaches to work. There are barriers employers can abate with wider use of technology, such as those related to long commutes to and from the
6 PwC, US Human Capital Effectiveness Report 2011/2012 7 PwC, Workforce inclusion: maximizing business performance June 2011

office, for example. Less obvious is how flexibility relates to changes in how people work and plan their careers. Where to begin Employers should think about what new kinds of conversation theyll have with employees, long-time and newly hired; about career progression. The established career ladder is no longer in place in many professions or even expected. And yet, people want to understand what theyll need to do to get ahead and what options they can make use of over the course of their careers. Being flexible about how employees can advance and become more valuable to the organization is important when the next levels are no longer well-recognized steps. Naturally, each organization will need to adopt flexibility policies that work for its people and its business, but there is common ground. On the left are some ideas to improve workplace flexibility. We gathered these insights from our guest experts at PwCs Diversity Leadership Forum in June, as well as from our own experience with clients.

Ideas to improve workplace flexibility 1. Shift to a global mindset: Recognize how cultural differences will influence the expectations of both employees and customers. 2. Design work-life solutions for the future: Avoid assumptions by bringing more people into the conversation, such as fathers and other care givers, gay and lesbian professionals and millennials. 3. Motivate with more than carrots and sticks: Tap into peoples need for autonomy, mastery, and purpose. 4. Set the tone from the top: Treat workplace flexibility as a critical part of talent management. Be a visible role model by sharing your trade-offs. 5. Reclaim attention and unplug: Continuous partial attention reduces productivity. Establish boundaries to reduce multitasking. 6. Make the economic case: Flexibility is a tool to recruit and retain the best talent. Monitor the return on investment of your organizations work/life practices.

 Menu

Upcoming 10Minutes topics

Growing by understanding your customerbetter Businesses now realize that consumers do not necessarily rely solely on rational analysis when they make decisions. Rather, many factors like emotions play a significant role. This 10Minutes focuses on how businesses can use behavioral economic principles to better understand their customers particularly relevant now, when companies are making big bets on customer-centric growthstrategies. Medical innovation: smaller, faster, cheaper As health care costs shift to consumers, how is medical innovation responding to demand for more value at lower cost? 10Minutes discusses how innovation in medical devices in developing countries is leading the way. This illustrates the kind of reverse innovation happening in several industries that signal a needed change in US business models.

Managing water risks Businesses have to compete for freshwater with a burgeoning global population that is consuming more food and energy; both are inextricably linked to water. Missteps in managing water can lead to political and legal snafus that halt production in farflung global operations. 10Minutes discusses how companies can find creative solutions to managing water risks by taking the long view.

 Menu

How PwC can help

To have a deeper discussion about flexibility and talent, please contact: Sayed Sadjady Principal, People and Change, Talent Management and Organizational Design Leader PwC 646.471.0774 sayed.r.sadjady@us.pwc.com Sonia Alvarez-Robinson Director, People and Change, Cultural Transformation Solutions Leader PwC 678.419.1899 sonia.m.alvarez-robinson@us.pwc.com Maria Castan Moats Chief Diversity Officer PwC 646.471.3884 maria.c.moats@us.pwc.com Reggie Butler Managing Director, U.S. Office of National HR Operations-Transformation PwC 813.222.6228 reginald.f.butler@us.pwc.com

Tell us how you like 10Minutes and what topics you would like to hear more about. Just send an email to: 10Minutes@us.pwc.com. Download and experience the 10Minutes series with enhanced multimedia on your iPad. Look for PwC 10Minutes in the iTunes App store.

2011 PwC. All rights reserved. PwC and PwC US refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 10Minutes is a trademark of PwC US. MN-12-0002