Global Economic Reality

3 Reasons Why Card-Carrying Capitalists Should Support Paid Family Leave

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In business school, we were taught that a solid strategy recognizes the exogenous (external) and endogenous (internal) challenges facing your business and addresses them. Employee child care and eldercare responsibilities are not only two major external business challenges, but they become internal issues the minute an employee walks in the door or signs onto his or her computer.

In the U.S., we pride ourselves on our capitalistic, profit-oriented savvy; therefore, given the growing magnitude of employee caregiving realities, you would assume that employers would support a clear, consistent uniform strategic response.  One that minimized business disruption and kept employees engaged and productive over the long-term. Unfortunately, the reality is the exact opposite.

Status of Paid Family Leave in the U.S.

Out of 178 countries worldwide, the United States is one of three that does not guarantee new mothers paid leave. The other two countries are Papua New Guinea and Swaziland. Nationwide, in March 2011, only 11% of the private sector workers and 17% of public sector workers reported having access to paid leave through their employer.

Only two states in the country, California and New Jersey, offer six weeks of paid family leave to men and women who are caregivers.  Even in the face of state budget challenges, both programs are healthy and successful. Unfortunately, the state leaves are not job-guaranteed which makes the time difficult to take. (New Jersey Paid Family Leave Fact Sheet / California Paid Family Leave Fact Sheet)

Yes, there are 12 weeks of job-guaranteed FMLA, but it is unpaid and employers with fewer than 50 employees are exempt which eliminates a large percentage of workers.

In terms of private paid leave offered directly to employees by employers, 58% of mothers who gave birth and were offered leave by their employer received some form of maternity disability pay, but only 14% of men on paternity leave received any replacement income (2012 National Study of Employers). That means 42% of mothers and 86% of fathers with employer supported leave received no income at all.

A Brief History

Historically, a coalition of labor, women’s, child and health advocates have promoted paid family leave. They’ve emphasized the well-documented public health benefits, the peace of mind of employees, benefits for children and eldercare cost savings. While valuable and important, these rationales haven’t withstood the “job killer and “anti-business” arguments used by groups like the Chamber of Commerce to fight approval. (Note: at the end of the post, you will find new information that could indicate the Chamber’s position on caregiving as an important business challenge is evolving, at least in their organization.)

Why?

There are workplace and public policies that plan for time off and income replacement in case of illness or injury. There are 401Ks and social security for when you retire and can no longer work. Why isn’t there a coordinated, uniform workplace and public policy that offers time off and at least partial income replacement when people, inevitably, have babies or an aging parent needs care? Why?

I wanted the question “why” answered when I attended last month’s Paid Family Leave Forum at the Ford Foundation sponsored by the National Center for Children in Poverty, New York State Paid Leave Coalition and A Better Balance. What I learned reinforced my long-held belief that every card-carrying capitalist should support paid family leave public policy because:

  • Paid family leave acknowledges and addresses a reality that directly impacts every business and, therefore, should be planned for strategically, uniformly and deliberately;
  • Paid family leave is NOT a tax, but income replacement insurance program funded by employees at minimal cost and
  • We are paying for a cost for caregiving already, albeit indirectly and inefficiently.

But, First, Don’t Shoot the Messenger

Before we dig deeper into each of the reasons listed above, I have to establish my business credibility, or “cred.” Too often when someone tries to engage the business community on issues that they consider “soft” or societal in nature, the messenger is dismissed as “not understanding business.” This, in turn, dismisses the message. I’m a messenger who can’t be easily dismissed with that argument because I do “get” business.

I was a banker for seven years, specializing in lending to closely held companies and I graduated, with honors, from Columbia Business School. I can rock a balance sheet and cash flow statement with the best of them, and I’ve even been known to find a strange joy in deciphering the “story” within the notes at the back of an annual report. I am a flexible work strategy consultant who works inside of organizations regularly, and I believe that both people and the business must benefit if flexible work is going to succeed.

As advocates for paid family leave found in California, I am not alone. Many business people support a uniform, public policy to address this challenge, but their voices were drowned out by the groups lobbying against it.

3 Reasons Every Card-Carrying Capitalist Should Support Paid Family Leave

My knowledge of and respect for business is why I think every card-carrying, profit-oriented capitalist should support paid family leave policy (or at least not stand in its way):

Reason #1: Paid Family Leave acknowledges and addresses a reality that directly impacts every business and, therefore, should be planned for strategically and deliberately.

The truth is that we are all potential caregivers. We may not end up having children, but all of us have parents and aging relatives who will very likely at some point require care.

Most mothers and fathers have to work and will be in the workforce when they have children. According to studies by the Center for American Progress, “in 2010, among families with children, 49% were headed by two working parents and 26% by single parents.” In 2009, employed wives of dual-earner families contributed 47% of total family earnings. In most cases, the income of both parents is critical to a family’s financial well-being.

With regard to eldercare, in 2010, 45% of employees surveyed said they had eldercare responsibilities over the past five years, and 49% expect to have responsibilities in the next five years. As the population ages, the eldercare challenges are expected to grow and many of those caregivers—men and women–will be in the workforce.

Paid family leave as public policy acknowledges the reality of caregiving by creating a uniform, clear response. Disruption is minimized because everyone knows the rules of the road. Business can plan in advance how the work will get done should an employee take leave for the prescribed six week period of time. This is especially true for maternity leave where, usually, you have months to plan. For example, perhaps the business can use the wages not paid to the employee on leave to hire a temporary worker, or to pay exist staff to take on the extra work during the leave.

It’s worth noting that a follow-up study of employers in California found that a majority felt paid family leave had either a positive or neutral impact on their business.

Reason #2: In the case of California and New Jersey, Paid Family Leave is NOT a tax, but an income replacement insurance program funded by employees.  In fact, some advocates feel a more accurate name is Family Leave Insurance. (Click HERE to go to Forbes.com for more)

6 Ways to Promote Work Flexibility Culture Change

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Our client, the professional services firm BDO, recently produced a short video about their award-winning approach to work and life flexibility.  Here are the six lessons every organization can takeaway from the clip to help better position flexible work as part of the culture, or the way the business and people operate every day:

Lesson 1: Language matters. BDO Flex is a “strategy.”  It’s about getting work done, serving clients, and managing people.  It’s not a program or policy.  There are policies to support various aspects of the strategy (e.g. compensation, telework equipment) but “flexibility” itself is not a policy.  There are programs that use BDO Flex, but “flexibility” is not a program.

Lesson 2: The employee AND the business must succeed for flexibility to work. All of the stories and key themes in the video reinforce the point of “dual” benefit and impact:

  • ReThink–The possibilities are endless
  • ReFresh–You work hard. Use Flex to recharge
  • ReDefine–Don’t accept business as usual
  • ReDiscover–Don’t lose sight of your dreams
  • ReAssure–Small changes can make a big impact

Lesson 3: Take the time and invest the resources to create a shared vision of success that anchors the strategy. It took months for the firm to create the “BDO Thrives on Flexibility” vision statement, but that process changed hearts and minds and created a shared understanding which moved the culture.

Lesson 4: Flexibility is not just about formal flexible work arrangements. It’s about both formal and informal, day-to-day flexibility in how, when and where you work and manage your life. It’s not an “arrangement,” but a well thought out plan tailored to meet your unique needs and the needs of the business.

Lesson 5: Men and women want and use work flexibility. Work flexibility is not a women’s issue.  It’s a strategy to help all people fit the unique pieces of their lives together in a competitive, hectic, global economy and for businesses to work smarter and better.

Lesson 6: Flexibility is not about child care only. Yes, parents absolutely need to work flexibly; however, as the video shows so do employees who have spouses who relocate, who have a passion for ballroom dancing or cartoon drawing, and who want to stay healthy.  And it’s for leaders who want to reduce the level of employee burnout and service clients better.

What other lessons did you learn from watching how one organization is talking about and positioning strategic flexibility in their business?  What is your organization doing?

If you haven’t already, I invite you to connect with me on Twitter @caliyost!

The Strategic Use of Flexibility (NEW Article in Talent Management Magazine)

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(This article appears in the October, 2011 issue of Talent Management Magazine and was co-authored with one of my Flex+Strategy Group partners, Donna Miller)

As the dust settles from the Great Recession and a new economic reality emerges, businesses are beginning to take a hard look at how they can manage their talent for maximum business impact. The urgency to review and rethink is driven by leaner headcounts, larger workloads and greater stress as technology and globalization.  These trends erased the traditional lines between work and life. The result is a shift in expectations about how to manage responsibilities on and off the job. Businesses are moving beyond the traditional one-size-fits-all model of work and career and taking a more strategic, flexible approach.

Since 2007, Work+Life Fit Inc. and Opinion Research Corp. have conducted a biennial national study to track the state of work-life flexibility from the employees’ perspective. The results of the 2011 Work+Life Fit Reality Check study confirm that new, flexible ways of working have gained traction since 2007. However, organizations need to do more. Helping employees manage the way work fits into their lives and organizations’ profits and growth plans in a transformed economy will require making flexibility — informal and formal telework, flexible hours, reduced schedules and compressed work weeks — an integral part of the operating business model and culture.

Traditionally, that meant writing a policy or training managers. But strategic flexibility requires dedicating people, time and money to a coordinated culture change process — one that clearly defines a business’ unique rationale for greater flexibility, establishes a shared vision of how managers and employees will use it and executes with relentless communication.

(Click here for more)

As We Think About the “Future of Work…” Need to Add “and Life”

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Around Labor Day, the commentary on the current state of the workplace increases. But this year, it seemed that the media focused more on what the future of work will look like. A couple of examples that I’ve seen over the past few days include:

  • A Jobs Plan for the Post-Cubicle Economy, part of The Future of Work—A Labor Day Special Report (TheAtlantic.com): Advocates creating unions that bring together the increasing number of independent workers.
  • The Blended Workforce: The New Norm (Talent Management): Foretells of a future workplace made up of a combination of employees, consultants, independent contractors and contingent workers. Not unlike the Shamrock Organization that Charles Handy first predicted in his 1989 management classic, The Age of Unreason.
  • Are Jobs Obsolete? (CNN.com): Challenges the relevance of the entire concept of a job.
  • The Future of Work (Creatingthefuturetoday.com): Sees a workplace dominated by virtual teams and global nomads.

For all of their futuristic and forward thinking, these articles miss a very important point–the recognition and acknowledgment that work and life are now one and the same. You can no longer accurately predict the future of one, without also imaging the future of the other.

But, with the exception of the need to transform education, the articles barely mentioned how the predicted changes will affect our lives outside of work. It matters because the success of any transformation at work along the levels imagined, will depend on a number of corresponding changes happening off the job as well. For example, if an increasing percentage of workers are part of a contingent, on-demand, virtual, global workforce, then:

  • What does that mean for the type of houses we live in and how we finance them?
  • How do the roles of women and men as providers and caregivers need to adapt?
  • How will that affect our choices to partner with someone and have a family?
  • How do we have to restructure child care and eldercare, and who will provide it?
  • How will we need to manage our finances differently?
  • Not only how do we update the curriculum taught in elementary and secondary school, but how does the school day and school calendar need to change?
  • What does “retirement” look like?

If these questions, and others, aren’t considered then a contingent, global, on-demand virtual workforce will flounder under the weight of misaligned personal obligations and circumstances.

The omission of “life” from questions about “work” is very Industrial Age. Twenty years ago, work and life were two separate and distinct spheres, at least in theory. “Work” was 9-to-5, in the office, Monday-thru-Friday and the other parts of life happened around that framework. Thanks (or, no thanks) to technology, demographic shifts, and economic globalization that’s not the case anymore. Changes in the way we work will directly impact the way we live. And, changes in the way we live will directly impact the way we work.

It’s a Jetsons world, but we still talk and think like we live in an episode of Mad Men. So, whenever you encounter “What is the future of work…”, add two words to the question “What is the future of work…and life?” That’s reality.

Do you think we adequately consider the impact of the future of work on the way we live our life off the job?  What are some of the questions we should be asking about both work and life in the coming years that aren’t being adequately addressed?

(This post originally appeared in FastCompany)

For more, I invite you to join me on my Fast Company blog and connect with me on Twitter @caliyost.

Work+Life Flex Here to Stay and We’re Less Afraid of It — Work/Life Nation Interview

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Judy Martin of Work/Life Nation recently conducted a great video interview with me about the findings from the NEW 2011 Work+Life Fit Reality Check – Check it out! Thanks, Judy.

Fast Company: Quarterly Earnings Kill People-Based Innovation…

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Do a quick search in The New York Times and The Wall Street Journal and you will find numerous articles by very smart people pronouncing that only “innovation” will lead to an economic recovery.

Yet, it’s ironic to read these articles at the same time that Hewitt releases its most recent quarterly global employee engagement survey. In the first quarter of 2010, the trend lines of companies reporting increases and declines in engagement converged and crossed. For the first time in 15 years, the companies experiencing declines far outpaced those reporting improvement. Houston, we have a problem. As Hewitt correctly states in their report,

“This highlights the growing tension between employers—many of which are struggling to stabilize their financial situation—and employees, who are showing fatigue in response to a lengthy period of stress, uncertainty and confusion brought about by the recession and their company’s actions.”

Yup.

Now we could argue the point about employers are “struggling to stabilize their financial situation” when 3,000 non-financial firms hold an estimated $1.6 trillion (yes, trillion with a “T”) in cash and equivalents, but I want to focus back on one simple question:

How do companies across the globe expect to innovate on the backs of an increasingly demoralized workforce that’s stressed, overworked, undercompensated, unrecognized, lacks career opportunities, and doesn’t trust leadership?

As I said before, how do we square this circle?

Now, I’m not an expert on innovation strategy, but I’m pretty sure that it’s not, “Be sure to overwork and undercompensate your employees. Make them really afraid. And then, when they no longer trust you, put everyone in a room and let the magic begin!”

So, what’s the answer?

Let’s go back to the articles begging for more innovation written by those very smart people. What do they say?  (Click here for more)

Fast Company: Why I’m (Starting) to Trust the Government’s Work+Life Bully Pulpit

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Periodically, I contextualize my opinions with “Maybe it’s my background as a banker and an MBA but…” because as much as I’m open-minded to and appreciate different perspectives, I’m still a businessperson at heart.  It’s important for me to acknowledge that fact, because it’s from this perspective that I’ve historically maintained a wary, arm’s length relationship with public policy solutions to work+life challenges.

My wariness stems from the 15 years I’ve worked with real companies, managers and employees developing and implementing work+life strategies.  I’ve learned that flexibility in how, when and where work is done and life is managed is the flagship solution that everyone needs.  It’s part of and enabled by a package of other direct supports such as paid time off, leaves, dependent care, etc .  This experience has shown me, time and again, that the best work+life strategies have the following characteristics:

  • They are NOT one-size-fits-all. They are tailored to the unique realities of the business and the people who work there.  Those (sometimes tough) business realities must be acknowledged for the solutions proposed to have credibility and staying power.
  • They are process, not policy-based which makes them flexible enough to adapt and evolve with the changing realities of the business and the people who work there.
  • They are built on a strong employee-employer partnership, not from the top-down. The employer/manager creates the space within which innovative work+life solutions are crafted as part of the day-to-day operating model.  And employees are prepared and know what they need to do to meet the company halfway.
  • They achieve both business and personal work+life fit objectives. The employer understands how to apply the same flexibility that helps individual employees manage their work+life fit to achieve other business objectives such as resource cost management (eg. labor, real estate, technology, and health care), global client service, sustainability, disaster preparedness, working better and smarter, etc.

For quite some time, these characteristics of success struck me as antithetical to mandate-based approach of public policy. Therefore, I tended not to look to the public sector for the leadership to promote and advance truly effective work+life strategies.  That is until the Obama candidacy and then presidency.

Listening to the administration’s statements and watching its actions, I began to think maybe the public sector could provide that extra “oomph” of support to move the work+life agenda forward.  They seemed interested in building upon the success within the private sector, while creating a legislative environment that reflects the reality of a 21st Century global economy.

To date, my new found faith has been consistently rewarded…(Click here for more)

Fast Company: The 3 Business Truths That Give Work+Life Flex Credibility in Today’s Economic Reality

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Maybe it’s the seven years I spent as a banker in New York City working with business owners before b-school, but I believe that the only way to drive real and meaningful change related to work+life fit and flexibility is to consider the realities of the business.

That’s not always easy when you believe passionately that a new approach is the right thing to do to help people. Sometimes it’s hard to identify and address business conditions. At a human level, it shouldn’t be necessary.

House built on sand vs. an earthquake-proof building

Unfortunately, when you don’t make the case for work+life flexibility based on business realities, it’s like a house built on sand. The first storm, it’s gone. Perhaps not in name, but in practice. When business considerations are part of the process, however, it’s like an earthquake resistant building. As the tremors hit, the building moves and shifts, but continues to stand.

I’ve been thinking about this recently for a couple of reasons…

First, I’ve been following the issue of work+life supports for hourly workers. And, while the business benefits have been part of the discussion, more often than not the focus is on the needs of the individuals. This is wonderful (and right), but again, from my experience unless the realities of the businesses that employ low wage workers are front and center (eg. low margins and an excess of cheap labor domestically and abroad available to do the work) you may get compliance but not real buy-in and change.

Second, I just spent the weekend at my business school reunion. The two days convinced me that, more than ever, work+life flexibility is a strategic imperative if individuals and organizations are going to tackle 21st Century challenges and opportunities. However, I’m also equally convinced that the ability to make the case based on “the right thing to do” is over. As a senior Fortune 500 HR executive who shared a panel with me said, “We went from too much capital and not enough workers, to too many workers and not enough capital. And that is going to continue for some time.”

Therefore, for work+life flexibility to have credibility with leaders today, the following business realities need to be in the forefront: (Click here for more)

“Mind in the Making” by Ellen Galinsky–Giving Your Child the Skills to Succeed in Any Era

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It’s no accident that I wrote about Ellen Galinsky’s excellent new book, Mind in The Making (HarperStudio, 2010) on the same day that I blogged about the skills needed to succeed professionally in the new economic era.

They directly relate, and that’s what makes Galinsky’s book so important. This is especially true for busy parents who may wonder, “Where should I put my limited resources to prepare my child for life in a world I’m still trying to understand?”  Mind in the Making will tell you where and how.

The book opens with a great quote about how the world has changed profoundly since many parents were children:

“Think about some words that describe what life is like today.  What words come to mind?

Did your words reflect the challenges of living in a complicated, distracting world?  Did you think of words that describe feelings of being rushed, time starved, of having too much to do and not enough time to do it?…

Life today is all of these things—complex, distracting, multitasking, 24/7, stressful and focused on immediate gratification and test scores.  It is also joyful and full of exciting possibilities.  We know that if it is this way for us, it is only going to be more so for our children.  We all want the best for our children, but how do we help them not only survive but thrive, today and in the future?”

The book clearly outlines “The Seven Essential Skills Every Child Needs.”  And, most importantly, Galinsky shares numerous concrete steps to build each of those skills from which busy parents, teachers and caregivers can choose.  The “Seven Skills” include:

  1. Focus and Self Control—achieving goals in a world full of distractions.
  2. Perspective Taking—figuring out how others think and feel.
  3. Communicating—determining what to communicate and being understood.
  4. Making Connections—figuring out what’s the same, what’s different and sorting things into categories.
  5. Critical Thinking—searching for valid and reliable knowledge to guide beliefs, decisions and actions.
  6. Taking on Challenges—taking on rather than simply avoiding or coping with challenges.
  7. Self-directed, Engaged Learning—realizing our potential through ongoing learning.

To understand how important the information in Mind in the Making is to laying the foundation for a child’s future success, consider what CEOs said were their top concerns in the coming year.  According to the Conference Board’s 2010 CEO Challenge Survey, senior leaders will be focused on growth, innovation, creativity, quality reputation, and customer service.  A child who has the “Seven Skills” would be ready to execute that vision, and succeed.

Contrast that readiness to the way current employees, their parents, are feeling in this new post-Recession era.  According to the 2010 Towers Watson Global Employment Survey of 20,000 workers across the global, they are afraid, insecure, and distrustful.  They are lacking the resilience to rise to the challenges of a global, 24/7 economy in which rapid change is the norm and self-direction of your work, life and career is required.

By following the steps outlined in Mind in the Making, children will have the skills they need to succeed.  And maybe their parents will learn something in the process as well!

To learn more about and follow Mind in the Making and author, Ellen Galinsky, here are some important links:

Fast Company: Squaring the Circle…in 5 Minutes! Expected Innovation/Quality vs. Employee Fear/Distrust

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For the last few days, I’ve been prepping for an upcoming panel at Columbia Business School entitled, The Post-Recession Workplace.   My message is going to be simple—the world has changed; therefore, we need to change.  I will explain the new work+life flex normal, and what individuals and organizations need to do differently to succeed.

Here’s my challenge: There’s a canyon-sized chasm between how we need to manage our work, lives, careers and businesses in a post-Recession era, and where we are.  How do you square the circle…in 5 minutes, which is the length of my introduction?

First how big is the chasm? Big. You need to look no further than The Conference Board’s 2010 CEO Survey and the 2010 Towers Watson Global Workforce Study to realize it’s huge.

On one side: Leaders want, growth, innovation, quality and customers (Conference Board)

Every year The Conference Board asks hundreds of executives, “to identify and rate their most pressing concerns.”  In 2010, executives said they were primarily focused on:

  • Sustained and steady top-line growth
  • Customer loyalty and retention
  • Profit growth
  • Corporate reputation for quality products and services
  • Stimulating innovation and creativity and enabling entrepreneurship.

On the other side: Employees are afraid, insecure, distrusting and want stability (Towers Watson)

But what about the employees who need to execute this vision of growth, customer service, innovation, and quality?  Are they ready?  How do they feel? According to the 2010 Towers Watson Global Workforce Study of over 20,000 full-time employees in 22 global markets, they are afraid, insecure, and distrustful:

  • “(The) desire for security and stability trumps everything else right now, in part because employees see security as a fast-disappearing part of the deal.”
  • “Employees understand they are solely and chiefly responsible for ensuring their long-term financial and physical health and well-being, as well as career and performance—but have serious doubts about their ability to take on these roles.
  • “Mobility is at a decade-long low point—with significant numbers of employees sacrificing the prospect of career growth for a secure job right now.”
  • “Confidence in leaders and managers is disturbingly low—particularly in terms of the interpersonal aspects of their respective roles.”

Uh, oh. Houston, we have a problem…Not a recipe for the risk and creativity necessary for innovation.  And, fear, insecurity and distrust don’t usually lead to growth and quality.

How do you bridge this gap between what employers expect and what employees are prepared to deliver? (Click here for more)