EFFECTS OF THE ECONOMIC RECESSION
ON WORKLPACE FLEXIBILITY
Content prepared by the Sloan Center on Aging & Work at Boston College

The current economic recession has prompted employers and employees to reevaluate the advantages of workplace flexibility. For many employers, flexible work arrangements have been used as a method of cost savings, enabling them to keep workers employed at a reduced level while waiting for the economy to rebound. For some employees, such measures may have lowered their incomes but preserved their jobs and their benefits. An August 2010 survey by StrategyOne, a polling company, found that 51% of employees have experienced no change in their work-life balance as a result of the economic recession, while 38% report that their work-life balance is worse, and 10% report that it has improved. (77)

In a recent survey of 400 U.S. employers, most reported that they are either maintaining the workplace flexibility they offer (81%) or increasing it (13%) during the recession. While more than a quarter of employers (28%) have turned to involuntary reduction in hours, a comparable percentage (29%) have used voluntary reductions in hours, and 22% report increasing use of compressed workweeks.

Other flexible work options used for reducing labor costs include:

  • increasing telecommuting (19%);
  • outsourcing or moving employees to contract work (11%);
  • offering buyouts or other inducements for early retirement (7%); and
  • encouraging phased retirement by working reduced hours (7%).

Among employers that have encouraged employees to choose flexible work arrangements (such as telecommuting, compressed workweeks, voluntary reduced hours, and phased retirement), the majority (57%) of employers give employees a great deal or some input into decisions about using those arrangements. In addition, fully 81% of employers have maintained existing flexible work options during the recession and 13% have actually increased those options, while just 6% have reduced them. Finally, 26% of employers have specifically used flexible workplace options to minimize the need for layoffs. (38)

Even though workers may be experiencing involuntary reductions in hours, 27% of employees worldwide say the economic recession made them feel more loyal to their employer, while only 10% feel less loyal and 63% say it has made no difference (56). However, while some employees have found that such reductions in hours provide them with unexpected benefits, such as more time with family, a 2009 Pew survey found that "nearly four-in-ten (37%) of all part-time employees younger than 65 would prefer to be working full-time, compared with 13% of part-timers 65 and older." (66)

A 2010 survey of 40 employers in Australia found that "one in three reported that they used flexibility as a strategic response to manage the downturn in work volume and still retain staff during the global financial crisis. Organizations offered a broader range of flexible work options (e.g., 41.7% enabled staff to work reduced hours, 53.3% to purchase leave, 21.4% to take sabbaticals, and 33.3% extended leave)." (10)