Businesses doing well by doing good

July 10, 2008 | Aaron Keating

Staying profitable and competitive in the business world is hard work, no two ways about that. The pressure to cut costs is relentless. That’s especially true for “high-road” employers (paying fair wages and benefits to their workers) who compete against “low-road” types.

But there are still some inspiring examples of businesses that are “doing well by doing good”, as Jodie Levin-Epstein reports in Responsive Workplaces:

  • Online scheduling allows employees to request preferred work hours and swap shifts with colleagues. JetBlue and J.C. Penney are among firms using electronic “kiosk” scheduling.
  • Best Buy’s new human-resource strategy “eliminating the clock” gives employees in the company’s headquarters nearly total autonomy over their workday schedules. BusinessWeek reports that the company plans to expand the strategy to its frontline retail workers this year.
  • Ikea offers paid sick days, maternity/paternity leave, and time off for child adoption, also provides health insurance, tuition assistance, and a generous 401(k) match.
  • Deloitte & Touche offerings include paid parental leave and a five-year sabbatical plan to extend time off for training and child rearing.
  • Abbott Laboratories offers on-site child care to its Illinois headquarters staff.

But do these efforts pay off on the bottom line?

According to Levin-Epstein, responsive workplaces have lower health-care costs, increased productivity, and save money on recruitment:

A Watson Wyatt study found a small increase in shareholder returns due to flexible work arrangements. One factor was a “surge in productivity” by workers using their time more efficiently; another was an increase in employee retention.

It can cost 150 percent of a salaried worker’s pay for a company to find, hire, and train a new person. And 73 percent of employees with high flexibility — versus 54 percent of those with low flexibility — will likely be at the same job the next year. For hourly workers, turnover costs amount to 50 to 75 percent of annual pay.

Employees offered flexible scheduling report lower stress than those without flexibility. Highly stressed workers create health expenditures nearly 50 percent greater than those with low stress. And the Centers for Disease Control found that stressed workers are also more likely to be absent from or tardy to work — and to make plans to quit their jobs.

So, if these practices are so good for business, do most employers offer paid family leave? In a word: no.

As noted a couple of days ago, only 8 percent of workers nationally have access to paid family leave, and 51 percent of new mothers have no access to paid maternity leave.

In Washington State, an estimated 1.3 million Washington workers aren’t even covered by the Family and Medical Leave Act (FMLA), which provides only unpaid time off; another 24,000 were eligible but couldn’t afford to take it.

As long as it’s easy to make a profit on the low road it’s doubtful that a majority of businesses will rush out to alter their employment practices – even if it makes economic and moral sense to do so.

Given the new pressures facing our economy and our working families, our democracy is the best guard against a “race-to-the-bottom” economy. New work-life standards will level the playing field on which all businesses compete, and help parents meet the challenges of working life. As Levin-Epstein puts it:

After all, the job of government is to sustain our nation’s productivity and to put in place policies more focused on the next quarter century than on the next quarterly return.

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Posted in Paid Sick Days, Work & Family

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