As I contemplated what to write about in my post for National Work and Family Month, an interesting piece of research crossed my desk entitled, “Are Family-Friendly Workplace Practices a Valuable Firm Resource?”
What caught my attention was the ironic disconnect between what the study intended to conclude and what the findings actually proved (and the authors missed):
- Intended Conclusion: “Family-Friendly” work practices (FFWPs) are not valuable to organizations;
- Actual Unintended Conclusion: “Family-Friendly” workplace practices are very valuable to businesses and people…as long as they’re implemented well and you know what you are talking about. Unfortunately, too often that’s not the case.
How does a gap like this happen? The researchers made the same mistakes that many stumble over, and these common oversights are what suck the value out of “Family Friendly” work practices.
The authors didn’t consider the importance of effective implementation and what that looks like in action. And they didn’t position and talk about the practices in a broad, strategic, business-oriented way. When FFWPs are effectively implemented and strategically positioned, the value that they provide to the business in terms of financial performance is proven and measureable.
So, how do you reconcile these two radically different conclusions?
Let’s start with a real-world example of how strategic flexibility helps a business run better, smarter and save money
We’ve been working with a multi-national company that wants flexibility in the way work is done to become a more visible and consistent part of their day-to-day business (the authors of the study consider all forms of flexibility “Family-Friendly” work practices). As we interviewed leaders and employees, they shared numerous examples of how flexibility in the way work is done has allowed the business to run smarter and better:
- Because people were able to work from home, the company was able to stay open and operational on a number of days when snowstorms would have, otherwise, halted business.
- By shifting and staggering the times people on the team started and stopped working, the business was able to expand customer service hours without paying overtime to the non-exempt staff.
- Because their job requires absorbing and analyzing large amounts of complex information, people will often work remotely either from home or another quiet location to get more done efficiently and productively.
- As the company has grown, office space is a premium. By coordinating days worked at home, and in the office, it limited the need for additional office space.
- Because many of the employees at the company have long commutes through heavy traffic, by shifting hours to avoid the worst traffic or working from home periodically the level of employee stress has been reduced.
And when asked, “What do you think the role of flexibility will be in the organization five years from now?” Every person, no matter what level, said, “There will only be more of it” for all of the reasons listed above and more, because they know that flexibility, informal and formal, helps the business run more productively and saves money.
“Family-Friendly Work Practices…do not affect firm performance directly or indirectly” Say What?!
This client came to mind as I read the “Are Family-Friendly Workplace Practices a Valuable Firm Resource? study by Nick Bloom from Stanford University, Tobias Kretschmer from University of Munich and John Van Reenen published in the Strategic Management Journal (June, 2010).
Normally, I give research a quick review and move on. But, in this case, I’m felt compelled to respond to the study’s conclusions for two reasons.
First, Freek Vermeulen, an Associate Professor at the London School of Business, wrote about the results in an article on Forbes.com entitled, “Are Family-Friendly Workplace Practices Worth Their Money? New Evidence.” This means that the results have entered the mainstream press, and are potentially influencing the decisions of business leaders who may be considering whether or not to support a work+life initiative.
Second, the study’s rather emphatic conclusion that Family-Friendly workplace practices don’t positively affect the financial performance of a business is, in fact, wrong.
Here are the study’s official conclusions in more detail:
“In this paper, we studied the impact of Family-Friendly Workplace Practices (FFWP) on firm performance, and found that increased provision of FFWP is only (weakly) positively correlated with better firm performance if we omit management quality. Once we control for general management quality, there is not significant association between FFWP and performance measured in different ways.”
And it goes on:
“Our results support the conclusion that FFWP are neither a value-creating bundle of activities nor a lever for existing resources they do not affect firm performance directly or indirectly.”
“FFWP have implications different from other SHRM practices, as they affect employee well-being rather than firm financial performance.”
“Therefore, FFWP should be treated as policies that improve firm performance in terms of satisfaction of a particular stakeholder group—the firm’s employees—but that financial performance should not be the primary goal of implementing FFWP.”
“This calls for recasting FFWP as a non-market strategy affecting other outcomes than financial performance.”
Wow! Can’t get much clearer than that. Now, let’s look at how they are wrong… (Click here for more)
(This post originally appeared in the HuffingtonPost.com)