The Money is Not Enough

silver and gold coins
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Whilst we often avoid the cliché’ it is generally recognised that the combined knowledge, skill and talent of your workforce is the engine of corporate success. Attracting and Retaining talent is a relentless task that will become even harder as employment levels continue to rise and competition for talent becomes greater.

However, I suggest that simply offering Money is not enough nor is it a sound strategy for attracting or retaining the talent of today.  The first reason is obvious; money isn’t unique or special. Any company can simply match or exceed your offer. The second reason is just a reflection of our times; The 80’s dream that students would retire in their 50’s and live a life of leisure for the following 40 years has disappeared. Today they can expect to be working for 50+ years and want to do something meaningful and rewarding not just in work but outside of work. They value time as much as they value money.

The problem may seem daunting but the solution is very much alive within the public sector where pay is often very limited and they have no option but to explore other means of attracting and retaining staff.  Their solution is Flexitime – providing staff flexibility around what times they work during the week. This popular approach helps attract and retain staff who otherwise might be attracted elsewhere through the promise of extra money.

Flexitime is a “integrated” solution because staff can blend their work patterns and home patterns, and this is more beneficial than simply a pay rise elsewhere that would disrupt their home patterns (whether that be dropping the kids off to school, going to the gym or a myriad of other activities). It fully integrates staff to the organisation whilst providing the work-life-balance they value.

THE NUT IS BIGGER THAN YOU THINK

This will often lead into a discussion about whether the solution is a sledgehammer and the problem being just a nut. Staff turnover varies from organisation to organisation but the average is 15%. In general, you feel the pain less because attrition occurs over a year – imagine the pain if 15% resigned in a single week!

In general, it will cost you one year’s salary to recruit and train a new member of staff. This does not allow for all the knowledge lost that cannot be quantified though figures. But the numbers add up.

Of course, not all attrition is due to conflicting work patterns which is why staff exit interviews and surveys are important so you can assess the issues and impact of solutions.

But what if you could decrease attrition by a third? What impact would that have on productivity, reduced recruitment and training costs?

Then there is staff recruitment. Do you survey those that decline a job offer? Are you losing the best candidates because of inflexible work patterns? Does when people work matter more to you than how well they do their work?

How many staff take sick days because of personal diary conflicts? Almost impossible to measure but almost certainly it occurs in every organisation with inflexible work patterns.

THE VALUE OF TIME

The final discussion is often about how valuable flexitime is to staff. The answer of course is that depends on the individual, but only by extent not by absolute.

An employee on £10 per hour will earn about £19,500 per year (gross) and spends 2 hours a day commuting to work during rush hour. By working flexibly, he can cut his journey time from 2 hours to 1 hour a day by avoiding the rush hour. That’s worth (deducting his holiday time) £2,400 per year NET. The equivalent in gross salary would result in an 18% increase.

In another example, an employee that commuted by train to work could save between £500 and £1,500 a year by traveling off-peak.

So, benefits for staff are not just about fitting in personal plans but also saving time and in some cases saving money.  And in these examples, many companies would struggle to match the cash value that translates into flexitime.

ITS ABOUT TIME

Whether the discussion is about how to reward staff when times are commercially tough or how to attract and retain staff when times are good, it’s about time to start discussion now.

Some tips to get you started;

  1. Analyse the figures for staff turnover and categorise the reasons. Your exit interviews need to be carefully constructed to gain genuine and informative information.
  2. Similarly, you need to follow up your application rejections to gain insight.
  3. Get a deeper view of sickness. Not just occurrences but durations.
  4. Implement the Bradford Factor to get another layer of detail.
  5. Identify the staffing groups that easily map to flexitime
  6. Be clear about what times are flexible and what are not.
  7. Create a policy with clear and transparent rules.
  8. Ensure you have a system in place that eases administration, provides transparency and helps demonstrate the benefits.

 

Flexitime – The new normal

 

Historically flexitime was niche perk in a few large – mostly public sector – organisations that perhaps couldn’t offer the cash incentives offered by other – more commercial – organisations. In the private sector it might be the butt of a joke or twisted as an expectation that staff would stay until the job was done regardless of their contract hours but most certainly not some “new age” work-life-balance arrangement. For most though, the traditional 9 to 5 was the social norm. It had always been like this and there was never a need to change.

However, over the last 30 years so much has changed in terms of demographics and in the political, financial and social sphere that has created a tipping point and we see flexible working accelerating and filtering through into every organisation.

In the 1980’s there was a vision – if not a promise – that as countries got wealthier and our pensions bigger we would be retiring in our 50’s. The so called “Bucket List” of things to do when you retire became a favourite pastime; after all, with life expectancy increasing you had to make plans for a long retirement.

The bucket list remains today, but the dream of retiring at 50 is all but gone for the majority. In 2011 the Government removed the default retirement age (DRA) and have plans to increase retirement age to 68 with some forecasting it could raise to 75 by 2064. Pensions are not what they used to be and even without government initiatives some people just can’t afford to retire.

A student starting work today will be looking forward to 45+ years in work rather than the 30 that the 80’s tantalisingly promised and, when they retire, it is unlikely they will be able to cross many items off their bucket list. The conclusion for many is that if you want to achieve anything on your bucket list you need to be doing it during your working life not waiting until it is over. Our Flexible Survey hinted at such with 31% of those asking for flexible working gave a reason of outside interests/lifestyle.

Another major impact on flexible working has been the increase of women both in work and in leadership positions. In 1976 only 55% of women were in work compared to 93% men, by 2016 that had reached 70% (80% men).

The impact is felt in several ways; historically flexible/part time roles were largely fulfilled by women, but the more women in work, the more this has been normalised and this has been accelerated by women who have subsequently taken on leadership positions and embraced it. In addition, the historical gender bias that the mother is the primary care-giver has been replaced with shared parental responsibility. Now men are asking for for the same flexibility as their spouse to share that responsibility.

Whilst the government has various child care schemes and tax breaks, the fact remains that childcare remains expensive and often inflexible leaving the parents to pick-up the slack. This alone would be sufficient for a tsunami of requests for flexible working, but now we must also consider an aging population and that parental responsibility covers not only looking after your young children, but now also looking after your aging parents.

With the government predicting 1 in 12 people will be aged over 80 by 2039 this additional responsibility outside work is only going to increase and employees are demanding solutions.

So, we have a backdrop of gender equality to – and at work – putting pressure on both parents to take responsibility for their children and their parents which – in the absence of massive state intervention – can only be met by the relatives working flexibly.

We have more women in work normalising flexible working, female leadership endorsing such approaches and equality laws ensuring that men should not be treated any differently.

The ever-increasing period people are expected to work before retirement is forcing people to think differently. The 30-year work sprint followed by 30 years in retirement is over. Employees want to pace their 45+ years at work and cross of some of their bucket lists along the way.

The flexitime “perk” that became a “request” is now becoming a demand even in the private sector with 55% of candidates (according to our latest 2018 survey) basing their decision on this factor.

Organisations are having to adapt to this new norm very quickly; Competition for talent is heating up with unemployment levels the lowest since 1975. With Brexit looming and lack of easy access to European talent, organisations will have to work hard to attract and retain talented staff.

But there is good news too; Often flexible working enables staff to reduce their time and costs (childcare, peak-time travel) which outweighs an increase in pay. Various studies show that flexitime workers are absent/sick less frequently too saving the organisation disruption and costs. In terms of staff retention, flexitime uniquely integrates the employee working and non-working time, making the employee much less likely to leave. Finally, with 55% of candidates including flexible working in their decision, promoting such a policy is likely to increase both the quantity and quality of recruits.

Therefore, in terms of increased productivity, reduced costs, staff engagement, retention and attraction a move to flexible working can provide an organisation with a significant competitive advantage. Whilst managing flexible working might have historically been a headache, new cloud-based systems remove all the pain and provide additional real-time information, transparency and integration into HR and Payroll.

Contact us for more information on flexitime