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.