According to Gallup, 70% of American employees are disengaged at work, costing their employers a shocking half-a-trillion dollars every year.
In a labor market that favors employee mobility, and a dominant workforce generation that doesn’t mind job-hopping, retaining employees by keeping them engaged is a business imperative, both in terms of workplace dynamics and productivity. Gallup estimates that replacing even a minimum wage employee costs $3,500, and the benefits of retention cascade past on-boarding and training.
On the other hand, engaged employees come to work motivated, innovative, and ambassadorial for their organizations. They are incredibly productive and contribute to a positive workplace culture. They stay in an organization longer and help the organization grow.
One of the simplest strategies to keep employees engaged is to demonstrate trust by allowing them to work during the hours and from the locations that best serve their personal needs without disrupting business.
In the information age, many tasks can be accomplished remotely and at any hour of the day or night.
Quantifiable benefits of flexible scheduling
A 2015 workplace flexibility study by Workplace Trends found that 75% of employees rated flexibility as their most important workplace benefit. Some of the elements of flexibility, like paid time off, incur associated costs, but many of them are free to the employer, or impose nominal expenses vastly outweighed by the benefits. Flexible scheduling and work-at-home policies may require different managerial techniques but they are cost neutral—at worst.
Companies adopting more flexible workplaces report impressive savings. For example:
Costco slashed the industry average turnover rate by two-thirds with flexible scheduling.
Deloitte & Touche saved $41.5 million in turnover costs after creating new flexible work arrangements.
UPS’s telecommuting program at corporate headquarters boosted productivity by 17%.
First Tennessee Bank reported saving $3 million in turnover costs after its move to more flexible scheduling, achieving a customer retention rate of 96% that far exceeds the industry average.
Winning hearts and minds of employees
Workplace flexibility has also been shown to reduce recruitment costs and contribute to businesses becoming an employer of choice among high-performing job seekers. A survey by WorldatWork found that 85% employers with an “established flexibility culture” reported improved employee engagement.
Gallup’s report says, “to win customers, and a bigger share of the marketplace, companies must first win the hearts and minds of their employees.”
It’s all about how we feel at work.
Empirically-validated research about the human brain tells us that our ability to work at close to our full capacity is based entirely on how we feel. Employees who feel distrusted by the company and stressed about their personal lives will never become fully engaged workers who give their all and then some. Flexible scheduling and telecommuting policies communicate to employees that the company respects their judgment enough to work productively without daily visual oversight.
In fact, fear of workers being distracted by household tasks, a comfy couch, or a favorite soap opera are not only unfounded, it’s the opposite of the truth. Employees free to handle a few personal needs at home are more dedicated and they are better able to maintain work-life balance. Research shows that employees who work remotely are 22% more productive than on-site personnel, and cost an average of $20,000 less as the company reduces office space and accompanying equipment.
Most of the cost savings are a direct or indirect result of what I believe is the single most important benefit of flexible scheduling: the way it makes employees feel. As long as it doesn’t interfere with the core functions of a business, offering employees the flexibility to work remotely and/or non-traditional hours signals to them that their interests matter. The bond that establishes with the organization is invaluable.
Don Rheem is a former congressional science advisor, CEO, and author of Thrive By Design: The Neuroscience That Drives High-Performance Cultures with ForbesBooks.