Tuesday, February 26, 2013

Are Flexible Work Policies Bad For Business? A Reading List for Managers

The new CEO of Yahoo, Marissa Mayer, has been making the news in the last few months for her strong work ethic.  Her decision to take a two-week maternity leave after being at the company for only a few months (and perhaps as a new employee she was not entitled to full maternity leave) left many mothers concerned that she was setting back progress for women in the workplace, while others cheered that at least a woman was showing that it's possible to be a new parent and CEO of a major company.  Fortunately for her, she was able to build a nursery at work at her own expense so that she could be with her newborn at work, a luxury few, if any, of her Yahoo colleagues likely have the option to enjoy.

Just this past weekend, we find out that she is now eliminating the option of working from home for Yahoo employees.  This is already setting off a firestorm of reactions among bloggers, including Julie Ryan Evans at CafeMom who says the move is "a big slap in the face of working parents."  On FastCompany, Cali Yost describes the move as "raising the expose and challenge the misguided, faulty reasoning many leaders follow when they decide to revoke their support for flexible work."  She argues that companies that pull the plug on flexible work policies are really responding to their own lack of foresight into setting up work-from-home programs with appropriate support and monitoring, and may be passing the blame for the company's failing onto work strategies that have nothing to do with their woes.  Still others raise the point that working from home may negatively impact one's chance of a promotion.

When setting up work policies, it is important for leadership to be aware of the characteristics of their workforce.  If everyone at the company has a very high paying job and can build their own work-nursery, then perhaps working from home does not make sense.  But for the majority of people, having the flexibility to work from home, even part time, can make an enormous difference in their lives, leading to lower turnover, higher job satisfaction, and less distraction on the job.  Not to mention higher productivity.

Here is a reading list I'd recommend for learning more about the right way to do flexible work policies, which is really what this debate should be about.

  1. The Time Bind: When Work Becomes Home and Home Becomes Work by Arlie Hochschild.  This is a classic book that describes the work/life balance experiences of employees at a large national company.  The company had a very generous flexible work policy that no one was using, and Hochschild explains why.  This book illustrates the importance of company culture as well as the crucial role of upper management in supporting such policies if they are to be successful.
  2. Workforce of One: Revolutionizing Talent Management Through Customization by Susan Cantrell and David Smith.  This book helps managers understand the value of customized work policies that take into account the specific motivations of their employees as well as business demands.  It also offers tools to develop one's own customized workforce strategy that conceptualizes employees as customers.  It's a nontraditional way of thinking about human resources management that values people and productivity.
  3. The Time Divide: Work, Family, and Gender Inequality by Jerry Jacobs and Kathleen Gerson.  Another great book on work/family tensions and workplace structures.
  4. Opting Out?: Why Women Really Quit Careers and Head Home by Pamela Stone.  Stone interviews women who have chosen to leave the workforce to understand how workforce policies can be problematic for working parents.  She offers solutions for organizations seeking to retain these high-performing employees.
What do you think of this list?  What other books would you add?

Monday, February 4, 2013

Workers May Feel the Pinch from Health Reform

Employers play a critical role in the Patient Protection and Affordable Care Act (aka Obamacare) as the primary providers of health insurance coverage to working adults.  A recent Gallup poll shows that over half of employers say that healthcare costs are hurting the operating environment of their business a lot, while three-quarters say it's hurting a little or a lot.

Health Reform Is Expensive for Employers

In 2014, small businesses will have to start paying for health insurance if they have 50 or more employees.  If they don't, they pay a $2,000-$3,000 fine, which is well below the cost of paying for the average employer-sponsored family health insurance premium of $15,022. Even including the average amount employees pay, about $4000, employers are still left with an average of $11,000 to pay towards health insurance premiums.  Multiply that by 50 employees (at a minimum) and we're talking an annual extra expense of $550,000.  This is not a trivial amount of money.  A half a million dollars is enough to bankrupt many small businesses, regardless of how much the owners of the business may want to provide health insurance for their employees.  Even owners of large fast food franchises like Wendy's and Taco Bell have announced they will reduce employee hours so they will not have to pay for employee health insurance.

Employees May Feel the Pinch.

That means people working for already low wages will not only be missing out on employer-sponsored health insurance that they can pay for with pre-tax dollars, but they will also be bringing home less money to pay for premiums out of pocket with post-tax dollars.  Even if employers do not cut back on the number of hours their employees work, they may cut wages, as some professors at the Wharton School suggest.  They argue that employers may keep total compensation per employee the same by reducing wages and increasing compensation in the form of health insurance premiums.

Regardless of exactly how employers will choose to address the increased cost of providing health insurance, someone has to feel the pinch.  Either the business takes the hit, or the cost is passed along to workers.

For a great visual on how health reform is projected to affect employers, check out this infographic at Entrepreneur.