Flexible jobs = happy worker bees? by Katherine Reynolds Lewis @FortuneMagazine April 20, 2011, 5:11 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons While it’s no magic bullet and comes with sacrifices from both sides, more offices across the country are offering flexible working arrangements to increase retention, productivity and morale. When John Parry, CEO at Solix, Inc., arrives at work at around 7 a.m., the office parking lot already has some 80 cars, a testament to his employees’ desire to beat rush hour by shifting their work hours earlier than the typical 9-to-5. But none of those workers had to apply for a flexible work arrangement or win supervisory approval for a schedule change. “We don’t really care when people come in,” explains Parry. “We trust Solix staff with million-dollar funding decisions, so we should trust them to work flexibly.” The Parsippany, N.J.-based process outsourcer is among a growing wave of employers that have discovered how workplaces that accommodate employees’ desires for flexibility enjoy superior business results, higher productivity and greater retention. “You see company after company that says, ‘We created a more flexible workplace because the turnover level was really high,'” says Ellen Galinsky, president of the Families and Work Institute, a research and advocacy nonprofit that recently released a report on flexible workplaces in partnership with the Society for Human Resource Management. Flexibility is almost mandatory in a 24-7 global economy, when people may be called on to work evenings in an emergency or to connect with international colleagues, says Galinsky. Moreover, with 87% of people surveyed by FWI saying that flexibility would be important in their evaluation of a new job, it’s a key element of any human resources package. That’s not to say that flexibility is a magic bullet or is universally embraced in corporate America — a whopping 60% of employees feel they don’t have enough time for themselves, according to the institute’s research. Yet individual case studies make a compelling case for adding more flexibility to the workplace. After implementing a flexible work schedule and taking a more relaxed management approach, Solix’s turnover rate decreased to under 5%, its absence rate dropped to 0.6% of hours worked, and revenues have tripled in the last six or seven years, according to Parry. That’s a sea change from the old system of internal controls and competition, where the company had a culture of micromanagement and suffered from a 15% churn rate and a 3% absence rate. The firm serves government and nonprofit clients, primarily by verifying individuals’ claims for benefits or programs. Employees receive points for every application or document they process, so it’s easy for managers — called “coaches” at Solix — to keep tabs on productivity and output of each worker. If employees need to take care of a sick child or meet the cable guy, they’re encouraged to work from home. “If you treat people like adults — and you do the right job on hiring people that have the right kind of values — you know they’re going to try to get things done,” says Parry. The sacrifices of flexible work Flexible work is about more than the employer making concessions. Workers must also be flexible and committed to meeting the needs of the business, regardless of when a work emergency arises. Employees who feel that their needs are being met are more likely to go above and beyond their official work hours or job duties, according to Galinsky and other experts. Chris Doyle, 48, a managing director and partner at Public Financial Management, has worked flexibly for most of her 19 years at the financial advisory firm, so she could spend more time with her three daughters, now 15, 13 and 8 years old. While she was one of the first to arrange an alternate work schedule, more and more employees are now following her lead. Doyle worked roughly half-time from 1995 to 2005. Now, she works a full-time schedule but goes home early two afternoons a week, often finishing up work or checking email while her daughters do homework or after they’re in bed. “PFM was very flexible with me, but I also had to be flexible with how I was doing the work, because you can’t put bounds around clients,” Doyle says. “It involves certain sacrifices.” A half-time schedule put her on a slower track to becoming a partner and she wasn’t able to grow her portfolio of clients as quickly as some of her contemporaries, who now are responsible for much larger business plans. And then there were the moments when, flexible schedule notwithstanding, she missed her daughter’s performance in the school play or a family event. Bring your baby to work (every) day At Menlo Innovations, a software company based in Ann Arbor, Mich., new ideas about flexible work fit easily into the company’s culture of trial and error. “Let’s run the experiment,” is the typical reaction to a new idea at Menlo, according to chief executive Rich Sheridan. That’s how the company began to let employees bring their babies to work. When Michelle Pomorski, 33, gave birth to her first child, she was the first new mother to work as a high-tech anthropologist at the firm, which combines the roles of a usability specialist, graphic designer and business analyst. “I do a lot of client-facing work and have to leave the office and go on-site to other organizations. I worried about how that would work,” Pomorski recalls. “They just had no problem working around it.” Everyone at Menlo sits in a large, open space called “the factory floor,” and the din of so many voices seems to comfort babies. When Pomorski needed to draw or sketch something, she wore her infant in a baby carrier — or handed her over to a co-worker’s willing hands. “They set up an area with a changing table, where she could sleep and I was able to nurse her in private,” she says. Two people for every task Borrowing from the principles of lean manufacturing, Sheridan refuses to work any individual to 100% capacity for fear of a single glitch shutting down production. Two employees work on each computer, and the pairs switch every week so projects can continue seamlessly even when someone is out — encouraging teamwork and collaboration in the process. Employees work no more than 40 hours a week, take vacation whenever they want, and stay home when sick. While the idea of having two bodies for every task may seem redundant, Menlo feels the firm gets at least twice as much work from each worker. “If you’re paired with another human being, you’re not likely to be surfing the web or checking email or answering the phone all the time,” Sheridan explains. “You’ve got a responsibility to the person sitting next to you.” By the end of an eight-hour day with zero down time, employees are exhausted. That’s another reason Menlo sticks to a strict 40-hour workweek and simply adds staff from a pool of trained contractors when the workload increases. Indeed, half of the 50-person workforce consists of independent contractors, so Menlo doesn’t haven’t to pay these workers when they are sick, go on vacation, or take maternity leave. Sheridan says that the low number of customer complaints, top-notch quality and high morale is a testament to the success of Menlo’s flexible approach. “We’re building software for you,” he says. “Would you rather have a joyful team or a not-so-joyful team?” Editor’s note: An earlier version of this article incorrectly stated that Chris Doyle worked half time at Public Financial Management (PFM) from 2005 to 2010. Doyle worked half time at PFM from 1995 to 2005. Also from Fortune: Want to attract top tech talent? Offer telecommuting When should you discuss your salary in a job interview? A tough job market for teens, thanks to Grandpa —— You Can’t Fire Everyone: Unpaid jobs Have you ever taken an unpaid internship or temp job to get your foot in the door? Have you managed any unpaid workers? How did it work out? Tell us your stories and we’ll highlight the most interesting and instructional ones. Email us at email@example.com.