Will Perks and Wellness Benefits Alone Enable You to Compete in a Tight Labor Market?

A recent survey from Robert Half shows that while Chief Financial Officers want to expand health and wellness benefits, employees prefer additional vacation days, telecommuting options, and non-traditional work hours[i]. CFOs and employees do agree, however, on the popularity of perks, such as free breakfast and get-togethers. Robert Half’s Information Graphic

With the recent surge of job growth and hiring in December and a 5% unemployment rate, U.S. employers are facing tough competition for critical, skilled employees. Companies are finding that they need to differentiate their brand in the marketplace, and offering the same perks as everyone else isn’t enough. While I encourage executives to look for ways to slow the growth of health care costs and promote wellness, they need to also listen to what employees want in this tight labor market: exciting employer brands with engaging talent management practices.

Rather than focus only on the “P” for perks, I recommend that executives think more thoughtfully about the talent management “Ps”: Purpose, Principles, Positive Environment and being Performance Based.

The employers who will flourish are the ones able to attract, motivate and retain the best talent with their purpose, principles and commitment to investing in the development and desires of their workers.  The best workers—the ones who contribute the most to the bottom line—embrace a positive and performance-based work environment that intellectually stimulates them, excites their intrinsic motivators, develops, recognizes and rewards them for their good performance, and accommodates their complex lives with flexible work options.

Life for your employees is fast, digital, and complex.

According to the U.S. census bureau, the average commute to work takes 51 minutes round trip. The average exempt employee works 49 hours a week and spends 18 hours on household chores.[ii] Busy, busy, busy.  According to the Staples Advantage 2015 Workplace Index report, over half of the employees surveyed felt burned out from long hours. One-third of the burned out employees would like a flexible work schedule.[iii]

No wonder that flextime and work location flexibility have long been on the list of popular work environment features for employees! I call them work environment features and not non-monetary benefits because executives need to change their thinking about flexible work environments. A flexible work environment provides employees and teams with the time, space and technology to work when and where they are most effective, and that isn’t necessarily the 9 to 6 everyone-in-the-office environment that is favored among two-thirds of executives.[iv] Many executives resist flexible work environments and telecommuting because they believe they will lose control, suffer productivity losses, or lose their unique culture.

Nothing could be farther from the truth. Let’s look at the numbers.

Flexible work environments can improve productivity and employee morale, reduce real estate costs, and provide a high return on investment. 

I implemented a flexible work environment in a business unit of a Fortune 100 company that allowed 25% of the workforce (including 40% of the national sales force) to work from home three to four days a week, depending on their job function. If most of an employee’s work was conducted via computer, and they were not required to be physically in the office because they worked in a lab, in manufacturing, or needed access to on-site files, they could work from home. To make this arrangement successful, their managers needed to provide clarity on goals and expectations for communications and operating norms.

The outstanding results the company achieved are listed below. Please note that the return on investment was made in 1.6 months!

ROI included the cost of re-designing the office environment to accommodate a flexible work environment. We increased the number of huddle rooms, high definition videoconference rooms, and upgraded the office furniture, carpets and paint.

Satisfaction

  • Home-based workers reported 98% satisfaction with their work style
  • Management became 20% more confident that they could attract qualified candidates
  • Turnover was kept low at 4.5%

Productivity

  • Overall productivity increased by 2.3%
  • All workers reported an average of 21 minutes/day of improved productivity due to the re-designed work environment. Highly credited was the increase in conference rooms and “flex rooms” along with improved meeting agendas and etiquette
  • Home-based workers reported a 22% increase in productivity
  • 59 minutes of added work time/day
  • 38 minute of added personal time/day

Environment

  • Commuter miles reduced by 6,750 annually
  • Carbon emissions reduced by 408 tons annually

Asset Utilization

  • Reduced 69,000 square feet of leased space
  • Reduced recurring costs by $1.2 million/year
  • Reduced need for future floor space due to fewer worker relocations

Return on Investment (ROI) in 1.6 months? The results we achieved are not unique. Many companies experience similar improvements after implementing flexible work environments, based on research by Global Workforce Analytics[v] and Workflex: The Essential Guide to Effective and Flexible Workplaces.[vi]

What is your view? Should telecommuting and flexible work environments be part of your employer brand so that you can distinguish yourself in a tight labor market? Or, do you believe it is simply too complex to manage?  I would love to hear from you.

Victor Assad is a Managing Partner of InnovationOne.US and the CEO of Victor Assad Strategic Human Resources Consulting. He works with key decision makers and human resources leaders on talent management, innovation, accelerating change, leadership development, executive coaching, and other strategic initiatives.  Please e-mail Victor at victorassad6@gmail.com or visit Victor’s website at www.victorhrconsultant.com to download his free case study on flexible work environments, “Form Follows Function.”

[i] “40 Percent of CFOs More Willing to Negotiate Perks. CFOS in Chicago, Washington, D.C. and Boston Increasingly Open to Negotiating Nonmonetary Benefits,” Dec. 10, 2015. Found at http://rh-us.mediaroom.com/2015-12-10-40-Percent-of-CFOs-More-Willing-to-Negotiate-Perks

[ii] Lydia Saad “The ’40-Hour’ Workweek Is Actually Longer – by Seven Hours.  Full-time U.S. workers, on average, report working 47 hours weekly.” (August 29, 2014). Found at www.gallup.com/poll/175286/hour-workweek-actually-longer-seven-hours.aspx; and Kim Parker and Wendy Wang (March 14, 2013) “Modern Parenthood: Roles of Moms and Dads Converge as They Balance Work and Family.” Pew Research Center Social and Demographic Trends. Retrieved from http://www.pewsocialtrends.org/2013/03/14/modern-parenthood-roles-of-moms-and-dads-converge-as-they-balance-work-and-family/.

[iii] “Staples advantage 2015 Workplace Index: A Comprehensive Study of Workplace Trends,” Staples Advantage. Developed in partnership with Redshift Research. Found at http://go.staplesadvantage.com/rs/896-JNU-907/images/Staples%202015%20Workplace%20Index.pdf?aliId=781184

[iv] Lemery Reyes, “Workplace Perks” San Francisco Business Times, Jan. 1, 2016, pp 29.

[v] Kate Lister and Tom Harnish, (2010) Results-Based Management. The Key to Unlocking Talent, Increasing Productivity. Global Workplace Analytics. PDF downloaded from http://www.globalworkplaceanalytics.com.

[vi] Workflex: The Essential Guide to Effective and Flexible Workplaces, (2012) Families and Work Institute and Society of Human Resource Management. ISBN 978-1-58644-282-8.

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