SMALL BUSINESSES HAVE a powerful weapon when it comes to recruiting and retaining employees: flexibility.
As large corporations struggle to figure out ways to offer alternative work arrangements, smaller employers are providing options such as flextime, part-time hours or telecommuting with relative ease. The latest research by the Families & Work Institute in New York found that small businesses with 50 to 99 employees are significantly more likely than bigger companies with 1,000 or more employees to allow workers to change starting and quitting times on a daily basis (17% vs. 4%); return to work gradually after childbirth or adoption (66% vs. 49%); and gradually phase into retirement (25% vs. 14%).
"It's the smaller companies where innovation is bubbling up," says Ellen Galinsky, president of the Families & Work Institute, which studies workplace issues. That's often because the business owner is a former corporate employee who dislikes rigid policies and wants to rewrite the rules, she says. Also, bosses at smaller companies often know their employees personally and trust them to work however they see fit, as long as the work gets done.
At NRG, an independent insurance brokerage in Seattle, employees are encouraged to work at home one day each week, and all staff members get an extra month of vacation for every five years they're employed at the company. Bailey Law Group, a legal firm in Washington, D.C., allows staff attorneys to set their own hours, work remotely, and move to part-time schedules without hurting their career prospects — a strategy that owner Kathy Bailey says has significantly increased productivity and the company's revenues. And at the Cat Doctor, a feline medical center in Boise, Idaho, staff can phase into retirement, with benefits pro-rated as they are for other part-time employees. All three companies have won Alfred P. Sloan awards , which recognizes companies that have successfully used flexibility to meet business and employee goals.
In surveys of employees' most-desired workplace changes, flexible scheduling invariably ranks right after higher salaries. Strikingly, younger employees who have grown up with the Internet and the ability to work anywhere and anytime "come in there demanding it," says Karol Rose, chief marketing officer for FlexPaths, a Hillsdale, N.J., provider of web tools for creating flexible workplaces. "They can't function without flexibility because they've been plugged in since they were born." (For more on managing millennials, or the generation born between 1980 and 1995, click here .)
By offering such flexible scheduling, a small business can gain a competitive advantage over its larger, deeper-pocketed counterparts. It's especially helpful during tough economic times when smaller employers may be unable to offer generous packages of traditional benefits, such as health insurance and retirement plans. Either way "those [benefits] might not be as valuable to folks," Rose says. In particular, employees who are caring for children or aging parents, or pursuing personal projects, might place more importance on flexibility. That should be "a real eye opener for small businesses," she says.
The costs of incorporating flexible scheduling vary by company, and sometimes include buying equipment (such as laptops, wireless devices or cellphones) for employees to work from remote sites. Many of the Sloan award winners said the expense was minimal compared to the cost of replacing employees, who might need to leave if they can't arrange an alternative set-up. Research from the Families & Work Institute also has shown that employees tend to be more engaged, more satisfied with their jobs and more likely to stay put when working in flexible work environments, according to Galinsky.
Here are the three main ways in which employers incorporate flexibility:
• Formal flexible work arrangements, including flextime, compressed workweeks, part-time hours, summer hours or job-sharing. For instance, a business owner might allow an employee to work two days a week at the office and three days a week from home (or some other off-site location) on a regular basis.
• Informal flexibility, such as allowing employees to occasionally change their schedules or work location for personal reasons, everything from taking a dog to the veterinarian to catching a child's afternoon soccer games.
• Career flexibility, allowing employees to shift in and out of roles and job responsibilities, typically as personal developments (everything from raising children to training for a triathlon) take on a greater role in the employee's life. Career flexibility would include a formal leave of absence or a sabbatical, as well as taking time off (without pay) with the ability to return.
Any arrangement, of course, has to benefit the company and its bottom line. It's important for a small-business owner to ask for accountability when giving an employee the freedom to set their own hours or schedule. They should discuss with the employee how work will get done, how deadlines will be met and how flexibility can improve business results.
"The big fear amongst naysayers is 'if we give it to one person, then everyone will want it, and no one will be there,'" says Cali Williams Yost, a consultant on flexibility strategies in Madison, N.J. "That almost never happens." Another concern is that flexible scheduling can hamper productivity. However, "most people don't want to work less," Yost says. "They just want to work differently."
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"Balancing Work & Life," a weekly column written by Colleen DeBaise for smSmallBiz.com, advises entrepreneurs on how to better balance their lives. Write to her at firstname.lastname@example.org.
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