Flextime in the Workplace

Friday, March 29, 2013

Columbia University defines “flextime” as:”…a scheduling arrangement that permits variations in an employee’s starting and departure times, but does not change the total number of hours worked in a week.” Columbia goes on to define variations in flextime schedules which include: fixed and variable starting/stopping times, variable workday lengths, workweek compression, customized work schedules, and even part-time employment. All of which are more or less focused on assisting the employee to balance their personal and work-life needs. An addendum to the more tradition flexible work arrangements is, of course, telecommuting. The Mid-American Regional Council based in Kansas City touts flextime as a competitive advantage for employers to increase their operational hours without adding staff while reducing traffic congestion.

While flextime sounds like a win-win for employers and employees, however, not every job situation or employee can accommodate a high degree of flexible work arrangements. Some positions and employees are tied to a customer’s operating hours, locations which are in different time zones or demands that changing shifts must overlap. For hourly workers under the Fair Labor Standards Act and state-local equivalents, tracking hours worked may become more complex. If accrued paid-time-off benefits are tied to daily hours worked, policy changes may be required. Employees who did not opt for flextime may feel resentment towards those who elected a flexible schedule. Business cycles and emergencies may require the cancellation of some or all flextime schedules thus disrupting employee commuting and dependent care arrangements.

A 2010 study by Brigham Young University of 24,436 IBM employees located in 75 countries, found that telecommuting employees were able to average the equivalent of two additional work days per week before their work interrupted their personal and family lives. The study’s primary author, E. Jeffrey Hill, found that most flexible work arrangements often include both traditional office time as well as telecommuting from the worker's home or other remote location.

As the US economy continues its slow recovery, organizations are gradually adding jobs. However, many smaller employers are faced with the uncertainty of the cost of additional workers in light of the 2014 deadline that mandates health care coverage for most employees. While flextime will not eliminate this uncertainty of future costs, it is a tool that may assist organizations in attracting, retaining, and motivating top talent. Faced with small to nonexistent salary budgets, flextime can add to a specific employer’s attractiveness to the top performer it will need to grow and prosper. Increasingly, young workers entering today’s labor force are seeking flexibility in their relationship with their employers. Many new graduates simply do not buy into the traditional 9 to 5, Monday - Friday, corporate cubicle work style that is found in many of today’s organizations.

Immediate Supervisors Are Key to Employee Engagement

Friday, March 22, 2013

In a recent study by Dale Carnegie Training, respondents reported that their immediate supervisor played an essential role in their engagement with organizational values, initiatives, and goals. The study conducted between February 2012 and April 2012 by MSW Research at the request of Dale Carnegie Training included 1,500 employed participants ages 18 and above.

The study’s significant finding was that an employee’s supervisor has a direct and determinate impact on the engagement level of the employee. A strong correlation was seen between an employee’s level of “satisfaction” and their level of disengagement. In summary, 80% of employees who were found to be Very Dissatisfied were also found to be disengaged; furthermore, employees attributed this lack of engagement to their relationship with their immediate supervisor.

     • 80% – Very Dissatisfied

     • 54% – Somewhat Dissatisfied

     • 52% – Neutral

     • 18% – Somewhat Satisfied

     • 13% – Very Satisfied

It is axiomatic; employees don’t leave organizations they leave people, i.e., immediate supervisors. A simple Internet search will find dozens of articles from the likes of Forbes, Robert Half, Wharton, and others, which cite the inter-relationship between the employee and their manager as pivotal to talent management and retention. All relationships, whether professional or intimate, are personal.

While many employees want to be employed by a well known and well respected employer, e.g., Apple, Google, Amazon, Coca-Cola, Starbucks, IBM NY, Southwest, Berkshire Hathaway, Walt Disney or FedEx; an employee ultimately reports to an individual. Immediate supervisors are often gatekeepers, dolling out assignments, giving directions, rating performance, and evaluating future organizational potential. In such a role, immediate supervisors have the ability to motivate mid-level talent to be a top performer and de-motivate top talent to be an under-performer. Immediate supervisors can be a coach, mentor, and teacher or they can be a stumbling block, an impediment or obstruction to the employee.

Employee turnover costs both in monetary terms and customer goodwill are significant to source, recruit, hire, train, and retain the talent organizations need to be successful. The Society for Human Resource Management (SHRM), American National Standards Institute (ANSI), and the International Organization of Standardization (ISO) have jointly worked to develop a standardized cost model for employee turnover. At an estimated turnover cost range of one to three times base salary, replacing even a small number of employees becomes burdensome to any organization. Furthermore, if that turnover is directly linked to supervisors and managers who lack employee management skills, the potential for litigation and its costs become unacceptable.

According to DruckerPhilosophy.com, “The role you have as a manager does define power within the corporation; however, it is not this power that manages people. It is the task of leading people.” As any new military officer will tell you, you lead through motivation and not intimidation. The talent in today’s workplace must be lead and the role of the immediate supervisor is to provide that leadership. Leadership is gained through the respect that others bestow; respect is given, not demanded from today’s talent.

Teleworkers: Are They Connected or Disconnected?

Friday, February 15, 2013

By now everyone knows that Marissa Mayer, the new CEO at Yahoo, has directed that Yahoo’s teleworkers are going to be recalled to the office. Returning to the office cubical may require some Yahoo teleworkers to choose between keeping their jobs and relocation. Mayer believes that recalling teleworkers to the office will increase the “collaboration” among Yahoo’s some 11,000 plus workers. This increase in collaboration is part of Mayer’s plan to rejuvenate Yahoo in the face of other competitors. Like many others firms, telework has proved to be a tool to attractive, retain, and motivate workers to choose between employer “A” and employer “B”. After all, the best talent for an organization may be living in a remote cabin somewhere in Idaho with laptop and a satellite dish.

Certainly working remotely has both advantages and disadvantages, like most things in life. The key to a successful telework practice is how it is implemented and the policies which are or are not designed to support a remote work environment. Giving an employee a laptop, a security key, and remote log-in and telling them to work from home may not be productive for either the organization or the employee. Policies, written or otherwise, must address expectations around phone and e-mail responsiveness, productivity, performance measurement, and the need for regular visits to the office (once a week, once a month, once a year), and security of company and client information. Failure to provide for the organizational, employee, and security aspects of telework will invite a host of issues most organization may not have anticipated.

Security issues along are enough to deter many organizations from attempting telework. Consider the exposure to organizationally sensitive information such as financial and performance records, business plans for new products and markets, client order, credit, and purchasing data. Access to employee and employee benefit information brings another level of risk with the potential for Personal Health Informational (PHI) and Personal Information (PI) exposure. Lost and stolen laptops and storage devices have found many organizations looking at millions of dollars in fine and penalties.

One of the most difficult areas of telework is selecting those employees to work remotely. Not everyone either wants to work from home nor is everyone suited to work away from an office environment. Organizational policies around performance expectation are key to a successful remote work arrangement. How will the teleworkers be measured on their productivity? Can their work be accurately and reliable measured? Are there hours and days that a worker must be available online, by phone, by e-mail, by IM? What are the work products for which the employee is responsible? How is attendance at staff and organizational meetings handled? How are pay, time, and attendance records maintained for someone working from home? Are paid time off policies for teleworkers the same or different than for office workers? When is an accident in a remote location covered by Workers Compensation?

Only history will tell whether or not Marissa Mayer’s recall of teleworkers will aide in the recovery of Yahoo or whether it will hasten its decline. As CEO she is held accountable for both the success and failure of the organization. While CEO’s have much to do with an organization’s growth and decline, having the right talent, with the right skills, at the right time, and in the right place is equally important.

Taxing Deferred Compensation Benefits-A Balancing Act

Friday, March 01, 2013

Within The Revenue Act of 1978 was an obscure section of the law which included a provision that has become known as Internal Revenue Code (IRC) Sec. 401(k), which obviously became the basis for most private sector employer’s sponsored, deferred compensation retirement plans in existence today. The Act formalized provisions allowing the use of pre-tax employee salary reductions as a source of plan contributions. Since that time, 401(k) and similar plans have found their way into government, health care, educational, and non-profit employers in the US and in many foreign counties. Generically known as deferred compensation or “DC” plans, benefits are based on employer and employee contributions plus investment gains/losses. Although often referred to as savings and profit sharing plans, they are a major component of the retirement plan space. The key to the employer popularity of 401(k) like plans is due to their simplicity and low relative cost for employers to operate. For employees it’s the availability of pre-tax contributions, self-directed controls, and portability.

Over the last 30 years, the aggregate accrued balances of US held 401(k) plans have grown to $3.5 trillion as of the 3rd quarter of 2012 according to Investment Company Institute. In recent days those balances have come under a closer review as the nation attempts to management its need for revenue in efforts to balance the budget. If those balances had accrued on a post-tax basis, similar to the Roth 401(k) after tax plans, the US government would have collected billions in additional tax revenue. It is not that this revenue is lost; it is merely differed until monies are withdrawn either during retirement or at some other time.

The Brookings Institution released a study on “15 Ways to Rethink the Federal Budget”, number 6 is titled “Better Ways to Promote Saving through the Tax System” authored by Karen Dynan, vice president, co-director of the Economic Studies program, and the Robert S. Kerr Senior Fellow at the Brookings Institution. Dylan proposes to, “Cap the rate at which deductions and exclusions related to retirement saving reduce a taxpayer’s income tax liability at 28 percent.” This, she believes, “would reduce the benefit associated with contributions to … the higher-income tax payers …”

In response to Dylan’s proposal, Brian Graff, Executive Director/CEO of The American Society of Pension Professionals & Actuaries (ASPPA) stated. “Because the tax incentive for retirement savings is a deferral, not a permanent exclusion, the proposal would more accurately be described as double taxation of contributions to retirement savings plans for anyone with a marginal tax rate of over 28%.” Graff’s concern is that if business owners are penalized, they will be less likely to implement and/or maintain 401(K) plans for their employees. Expanding 401(k) access is one of Dylan’s additional proposals as a means to boost employee savings.

401(k) plans are especially attractive to new and small businesses due to their relative low cost of implementation and ongoing operations and attractiveness to employees. Other forms of employee retirement plans are not only more costly, but are significantly more complex to operate and communicate to employees. 401(k) plans are often the only cost and administrative practicable means of providing retirements benefits for small and medium sized businesses. The curtailment of such means could hamper a small business owner’s ability to compete for and attract, retain, and motivate the top talent and skilled workforce required for it to survive and grow.

Organizations Share Top Talent with Non-Profits

Friday, March 01, 2013

It is hard enough to keep projects and project teams on track, on time, and in budget. So why would any organization loan some of their best talent out to philanthropic and non-profit organizations in the competitive environment most employers find themselves today? Certainly, there is a degree of good-will, community relations, bragging rights, and some free publicity to be sure with any organization who would engage in lending their talent.

Xerox, the business process and document management company, has granted fully-paid leaves in 2013 to a number of Xerox employees to work for non-profits inside their communities. Established in 1971, Xerox’s Social Service Leave program has loaned over 500 employees to support local community non-profits. Xerox employees provide a wide range of organizational and fund raising skills to numerous private community non-profit social welfare enterprises.

Campbell’s Soup, IBM, Exxon Mobil, HP, Microsoft, Bank of America, Marriott, Dominion (energy generation), Lockheed Martin, Bridgestone (tires), Georgia-Pacific, GE, and Ford are a sampling of organizations which have employee volunteer programs which support employees who share their time, talent, knowledge, and skills with philanthropic and non-profit organizations. While various organizations have a diverse range of purposes to support these efforts, one often stated reason is employee attraction and retention. Many employers recognize that the kind of employee, who can benefit their organization, is also the kind of employee who is engaged with their community.

Employee volunteer programs (EVP) have its own acronym B2C, “Business to Community”. EVP’s often require external support, so a business infrastructure has developed to support it. Causecast, HandsOn Network, Cause Capitalism, and CorpsGiving are among EVP support organizations which have as their goal to improve the performance of an employer’s EVP experience. The common theme with these organizations is employee attraction, retention, motivation, engagement, reward, and recognition. However, in an era of limited salary budgets, reduced staff resources, and increased competition; allowing the organization’s best talent time off to volunteer in local public schools (Georgia-Pacific) seems to be counter-productive.

Many organizations have discovered that employee volunteer programs provide a means for employees to develop job related skills and to improve those which they already process. Working in teams by installing insulation (Dominion), employees acquire both leadership and team skills which may later be used in an organizational setting. Stocking and organizing food at food banks (Ford) is one to engage and integrate summer interns into an organization’s culture. Support for Distributive Education Clubs of America (Marriott) is one way to introduce high school students into the business world and lays the grand work for potential future employees.

Top performing employees, by their very nature, are interested in a robust work-life experience. They are looking for more that an 8-5, check-in check-out relationship with their employer and their community. Whether large or small, innovative organizations are able to take advantage of their top performers’ level of engagement to the benefit of the organization, clients, community, and the employee.