WHY SOCIETY NEEDS WORKPLACE FLEXIBILITY
Content prepared by the Sloan Center on Aging & Work at Boston College

The changes in the demographics of the American and global workforce are affecting the economics of work and retirement. Workplace flexibility offers options that allow workers to continue as productive participants in society throughout their lives. The societal benefits associated with policies promoting workplace flexibility are described below.

 

RETAINING THE TALENTS OF OLDER WORKERS

Many surveys have shown that workplace flexibility is an aspect of work that is important to the recruitment and retention of older workers. The proportion of the labor force that is composed of older workers will continue to increase, while younger workers will make up a smaller proportion. According to 2009 Bureau of Labor Statistics projections, "the share of youths [age 16-24] in the overall labor force is estimated to be 12.7% in 2018, roughly half of that for the [55 and older] age group," which is estimated to be 23.9% in 2018. The 24-54 age group is projected to be 63.5% of the overall labor force in 2018. (86) In order to maintain high levels of skills and productivity in the workforce, employers will have to find ways to recruit and retain older and more experienced workers. "At the national level, the rising numbers of retirees relative to workers will result in a decrease in economic growth and productivity, higher taxes, and a decrease in living standards-unless people can be persuaded to work longer." Workplace flexibility, in the forms of schedule and hours flexibility, as well as workplace location, are ways in which retirement-age people can be persuaded to stay in the workforce longer. (27)

  • According to a 2008 AARP survey of older workers, "nearly two-thirds (65%) of older workers say they are 'looking for ways to better balance work with my personal life.' This desire is expressed by a slightly larger proportion of boomers (67%) than workers ages 62 to 74 (56%)." (43)
  • In a 2009 multigenerational survey of participants in work-based retirement plans "in response to a question regarding the balance between work and leisure in retirement, 70% wanted to include at least some periods of work in their retirement; 43% of respondents envision going back and forth between periods of work and periods of leisure, 22% working part-time, 5% working full-time." Only 30% of the respondents envision never working for pay again after retirement. (2)
  • According to a 2008 survey of recent retirees, "retirees are most likely to say that being able to work seasonally or on a contract basis (38%) or to work part-time instead of full-time (36%) would have been extremely or very effective in encouraging them to delay their retirement. Thirty percent each feel that being able to take time off for extended periods and being able to work a compressed workweek would have been effective, and almost as many believe a telecommuting option (28%) and receiving additional paid time off (27%) would have been successful. Fewer think that being able to shift their work hours from week to week (20%) or being able to take a paid sabbatical (19%) would have encouraged them to delay their retirement."(48)
Effectiveness of Schedule-Related Opportunities in Employee Retention / Postponing Retirement
Source: Helman, R., Copeland, C., VanDerhei, J., Salisbury, D. (2008).
 

PROMOTING FAMILY-FRIENDLY POLICIES

The White House recently noted in its 2010 Executive Summary, " Work-Life Balance and the Economics of Workplace Flexibility," that today "children are increasingly raised in households in which all parents work in the labor market (for single-parent households, this means that the one parent works; for two-parent households, both parents work)." With men and women both performing nonmarket and market work, often one or both of them need the ability to attend to family responsibilities such as taking children and parents to doctors' appointments. (26)

Workplace flexibility is needed to address increased participation of parents and women in the workplace, the greater share of household duties by both parents, and the increased need for provider elder care. Today, however, employees most likely to be in need of family-friendly policies, such as single mothers in low-paying jobs, are less likely to perceive that they have access to the workplace flexibility, while those least likely to need these policies, such as middle-aged males with high incomes, perceive the most flexibility. (13)

 

PROMOTING CONTINUING EDUCATION & IMPROVEMENT OF WORK SKILLS

The job skills required in the modern workforce require employees to obtain post-secondary education and additional job-related training. "The labor market in America today faces a paradox. Although the United States is experiencing high unemployment and joblessness, employers widely report difficulty finding qualified and skilled workers." (24) Recent industry sector analyses conducted by the Sloan Center on Aging & Work find skill shortages in all industry sectors. For example, one-quarter of employers in [the construction] sector reported skill shortages in one or more areas...management and legal skills shortages were especially pronounced. (82) Similarly, in the finance and insurance sector, 37.8% of employers report that both sales/marketing skills and management skills are in short supply to a moderate or great extent, while 31.8% report a shortage of legal skills. (83)

Many employees try to advance their education while work ing part-time or even full-time. The ability to participate in educational opportunities requires time and flexibility in employees' schedules. In a 2009 study on access to flexible work options, 67.5% of employees reported that they are able to take paid or unpaid time off for education or training. (68) However, while many companies offer flexible work arrangements related to education or training, employees may not take advantage of this option. For example, according to a 2009 MetLife survey of workers and job seekers aged 55-70, "overall only 36% of respondents have pursued additional skills or training that are required for their jobs or might benefit them in their jobs or their future employability." (63)

Employers who provide flexible scheduling or workplace arrangements to employees as they seek to work and earn a degree or credential may find that they can address their own skill shortages as they improve the qualifications of their employees. In a 2009 survey conducted for The Conference Board, "only 25.3% of respondents [report that they are] satisfied with their organizations' educational and job training programs." (35) Many workers seek to improve their skills by attending community colleges outside of their work hours. A 2010 report indicates that "Among the 84% of young community college students who worked in 2007-08, 66% worked more than part-time (more than 20 hours per week) and nearly a third worked full-time (35 hours or more)." (24)

 

ENHANCING TAX REVENUES THAT SUPPORT SOCIAL SECURITY AND SOCIAL PROGRAMS

Adopting flexible practices encourages labor force participation among those workers that would otherwise find it too "costly" to work, such as parents or older workers who have caregiving responsibilities. Flexible work policies also promote investment in improving workplace skills, increasing employability. Taxpayers and society as a whole benefit from having productive individuals in the workforce because they are more likely to make contributions in the form of taxes (and conversely are less likely to use the social safety net). (46)

The growing percentage of older adults in the population while birthrates are decreasing means that there are fewer people to pay for the Social Security benefits of retirees. Encouraging older people to work longer by implementing workplace flexibility will increase the tax base and economic growth while reducing the number of people utilizing Social Security. (27)

Workplace flexibility can play an important role in preparing the U.S. economy for the future because "when more people work, more people contribute to taxes and social insurance and thus provide funds for those who no longer can work." (46)

 

BENEFITS TO THE ENVIRONMENT

Business leaders are aware that shareholders, employees, and consumers are calling upon industries and employers to improve their environmental performance. "Not only is it ethical for a company to improve its environmental performance rather, it is sound business practice." (74) While there is no direct evidence that flexible work arrangements have a positive impact on the environment, some indirect effects have been suggested, such as:

  • Reduce the use of energy in transportation, by allowing the employee to work in a location closer to home or at home.
  • Allow for more efficient use of existing office space and reduce the need for new construction.
  • Allow employees to commute at off-peak times, resulting in less fuel consumption.

CASE EXAMPLE

In 2007, the city of Houston, Texas, sponsored the Flex in the City program as an opportunity for Houston area employers to try flexible work options. Employers were asked to adopt an additional flex option that eliminated at least one peak commute between September 17-28, 2007, during which time employers measured the effect on productivity—when the right employees, in the right jobs, practice the right flexible work option(s). At the same time Houston measured the effects on mobility. By moving a relatively small number of cars off the roads during peak congestion periods, a measurable improvement in mobility could be realized. A savings of 906 peak-commute hours were experienced as a result of the 2006 Flex in the City on both the North and Southwest Freeways. This time saving translates into $16.8 million annual user cost savings. (26)

"...allowing workers to work during atypical hours can reduce the commuting time for other workers that may not be taken into account by a profit-maximizing manager. One study found that in 2005, peak-period drivers spent 38 extra hours a year in traffic as a result of highway congestion, up from 14 hours in 1982. Moreover, over a third of drivers report that traffic congestion is a serious problem in their community."

 

ENHANCING GLOBAL COMPETITIVENESS

Some industry observers regard workplace flexibility as a talent management policy that is no longer an option, but an essential or mandatory practice to enable organizations to compete in a global economy. As companies become multinational in their scope of services, suppliers, and products, the ability to interact with customers and clients all around the world requires a workforce that can operate flexibly in terms of hours and locations.

"Patchy progress towards more diversified work arrangements is pushing workers out of the labor market altogether, or into jobs that are below their skill levels and potential. Few economies can afford such a waste of human resources in view of changing demographics, reduced labor force growth, and global competition for knowledge." (46)