Can Small Businesses Do Better By Treating Their Workers Better?

Joan Blades's comfortable house in a leafy, sun-dappled neighborhood in famously liberal North Berkeley might seem like the stereotypical place to launch a campaign encouraging employers to grant employees more flexibility. But Blades, a serial entrepreneur and author of The Custom-Fit Workplace, quickly confounds expectations. It's not just about helping workers, she insists -- it's also about helping companies be more successful.

To Blades, there's no contradiction in those positions. "You can't be a good business without thinking of the employees," she says. But what does that actually mean in practice? According to The Custom-Fit Workplace website, it's pretty simple.

Flexibility Is Worth It

"Everyone deserves a job that fits. Workplace practices that honor workers' responsibilities both on the job and off create a win for employees and employers alike," Blades explains.

In practice, that boils down to workplace qualities like flexibility, virtual or remote work (telecommuting), contract work, and other practices that build what Blades calls "High-Commitment Workplaces" based on trust and results.

In some cases, it could mean giving hourly workers additional notice of their schedules -- say, 80 percent certainty about hours one week in advance -- and concentrating overtime requirements to one week per month. Or it might mean allowing workers to telecommute or work from home one or two days a month.

"Different jobs have different opportunities," Blades concludes, "but every job can do something." Employers should "look to create that small amount of flexibility that makes a huge amount of difference. Employees are happier, more reliable, and more resilient. And it doesn't cost a penny."

More Than Just Elite Perks

Though trained as a lawyer and mediator, Blades earned her entrepreneurial and managerial stripes in the real world as cofounder of Berkeley Systems (maker of the After Dark screensavers) and MomsRising.org. "I grew a business from a few people in an attic to 150 people, and cofounded another organization and grew it to 40-ish people," she says. She's also involved in liberal causes as a cofounder of both MoveOn.org and MomsRising.org. But she bridles at the notion that Custom-Fit Workplaces are only for liberal companies hiring high-end knowledge workers.

At the high end, executives live irregular lives, Blades notes, and that is "conceptually understood" and accounted for in the workplace. But workplace flexibility can have an equal impact for firms with lower-wage retail, food service, and health care workers. Turnover in those industries can hit 400 percent, she points out, "and you gotta know that's expensive" to hire and retrain employees constantly.

As an example, Blades cites employee retention trends at Costco Wholesale, which uses higher pay and one-week advance notice of worker schedules to hold its turnover rate to just 30 percent of competing retailers' rates. Similarly, JetBlue has no call centers, instead employing reservationists who work from their homes.

Flexibility Doesn't Have to Be Expensive

Blades recognizes that many companies face cost pressures and tight margins that discourage them from offering workers this level of flexibility. That's why it's both important and necessary to demonstrate the value of this approach with tangible, bottom-line results. Many workplace adjustments are essentially free, and while some might entail marginal up-front costs, they're more than made up for by savings in other areas.

"It's really kind of sad," Blades laments. "People get so focused on the front-end costs that they don't think of the back-end costs."

Just as important, finding ways to accommodate workers' needs can improve productivity and performance -- and thus lead to greater success for the company as a whole. Who's the first person you meet when you visit a company, Blades asks? The receptionist is probably the lowest-paid person on the payroll. But if that person is obviously unhappy, it may not be the kind of place you'd want to go back to.

Similarly, flexible companies that invest in cross-training can empower team members to swap schedules to make sure business is always covered. Telecommuting can also save money on office space, transportation, and child care for both employers and employees.

And while Blades won't go so far as to claim that flexible companies can get away with paying employees less, she does acknowledge that "employers that are able to do this are able to attract talent that they couldn't otherwise."

Tips for Getting Started

In many cases, though, companies can be very resistant to moving toward a more flexible workplace. "I've learned it's incredibly hard to change work culture," Blades says. Fundamentally, people hate change. It's dangerous, and "a little scary."

Many companies don't want to allow flexibility for some workers because they don't want to be unfair to others. Blades says they worry that "if we let you, everyone will want to," so "too often, change doesn't happen until there's a crisis."

What usually happens, she says, is that "someone in an organization has to do something, like help a parent or a child. That person is accommodated, and the company finds that it works and can be expanded." In family businesses, she adds, "the change often happens because an owner or top manager has an educated, talented daughter who runs into barriers" in the workforce.

For workers who want to bring change, Blades suggests they go to their employers with a plan that would be both more profitable for the company and better for employees. It's also helpful to suggest starting with a month-long pilot program that lets the company get a feel for implementing changes while minimizing risk.

The Custom-Fit Bottom Line

Not surprisingly, workplace flexibility is often easier to achieve in small companies. "Big employers are all about metrics/policies/reasons," Blades explains, "and an individual who needs something different really throws that off track. Small employers can see that this is not all that discombobulating."

The underlying problem, she says, is that many business policies are designed to deal with the 5 percent of people who are screw-ups, not the 95 percent of employees who are responsible. But she suggests that instead of treating everyone like a screw-up, companies should give freedom to the responsible 95 percent and "get rid of the 5 percent." It doesn't hurt to stress teamwork and responsibility as part of the hiring process, either.

Again, it's all about finding the right path for your company and your workers. As Blades puts it, "Not every practice fits every workplace, but every workplace can benefit from some of these strategies."