As organisations seek to do more with less, there is a fine line between stretching a workforce and burning it out. Craig Donaldson speaks with experts about this issue and the benefits of a healthy work/life balance
As the economic downturn continues to impact on business in Australia, many organisations are looking for ways to reduce their costs and streamline operations. A company’s payroll is typically its biggest cost base, and many companies are taking a closer look at ways of reducing payroll costs.
A recent Hewitt Associates study found that 79 per cent of companies are formulating strategies to avoid redundancies within their organisations. As such, there is a renewed interest in workforce flexibility and how this can provide employees with more personal time and reduce costs for employers.
Barbara Holmes, director, Managing Work|Life Balance International, says it’s important to understand that the concept of work/life balance means different things for different people. “In a situation where an organisation has had to reduce staff and transfer the workload onto others, some staff would see this as an opportunity to develop new skills and demonstrate their capacity for career progression,” she says.
Some employers are using inevitable staff reductions as an opportunity to redesign roles and find new ways not only to do the job but also for employees to work more flexibly and improve their work/life balance. “In some business sectors, where 12 months ago there was a war for talent, employers are really reluctant for this investment to be shown the door,” Holmes says. “They are, instead, looking at a reduced work week, part-time work and increased flexible work arrangements so that they retain these staff and are ready for when business improves.”
Other employees, however, would find an increased workload stressful and detrimental to their work/life balance. In some organisations where job security is threatened and/or employees are carrying an extra workload, people are becoming stressed and their health and wellbeing may be at risk. There are also workplaces in which employees are working longer hours to cope with an increased workload, she says.
Nick Greenhalgh, director of Career Innovations, says employees have a sense that they should have to work harder and sometimes longer in a downturn. “As corporations look to increase sales and save on costs to ensure profitability, there’s an expectation that people will do what needs to be done - and that’s to get the results. This will impact on people and the amount of time required to do this,” he says.
Executives, balance and culture
This trend is especially prevalent in multinationals which have regional offices, according to Greenhalgh. As companies are teleconferencing more to save on travel costs, this requires employees to be on call more often across different time zones.
“Work/life balance is just disintegrating for some people in senior positions. It’s not unusual to them, working for US companies, [being] ultimately resigned to doing all-nighters on conferences calls. Often they find themselves coming to work through the day, too,” he says.
“There’s a certain powerlessness to address this, and it becomes a bit like a frog in hot water - it creeps up on people. As expectations of them rise slowly and gradually, suddenly they’re working these extraordinary hours and it’s ok and normal.”
It is a company’s leaders that drive and set expectations and organisational culture in both good times and bad. In some organisations, redundancies are inevitable, says Holmes, whether or not there is a strong culture around work/life balance.
However, where executives have seen and recognised the benefits that accrue from work/life strategies, it is more likely that senior managers and leaders will explore alternative ways to work as a way to reduce costs and minimise redundancies. “Executives know that they need staff who are engaged and committed if they are to continue to be profitable. A culture that is supportive of work/life balance for its employees is more likely to be able to deliver higher levels of employee engagement,” she says.
Executives who have poor work/life balance can often have a poor level of perspective of what they can do to improve themselves and their teams, Greenhalgh notes, as they’re so absorbed in the sheer amount of their work that they don’t have time to step back and gain some perspective. “Often people who have strong work/life balance are highly effective, because they have strong levels of perspective and can see things in a certain way and with greater clarity,” he says.
Doing more with less
Talent management is increasingly important to many organisations - and perhaps more so during a downturn. The Hewitt Associates survey found that employee performance (54 per cent) and employee potential (32 per cent) were the most commonly used criteria for targeting redundancies.
Jairus Ashworth, reward practice leader with Hewitt in Australia, says it is important for organisations to make decisions based on achieving structural efficiency. “Those organisations that make decisions based purely on short-term cost reduction will be poorly placed to take advantage of the inevitable upswing in the economy, and will find it more difficult to recover,” he says.
Unless structural efficiencies are put in place and job roles redesigned following a redundancy program, companies can hamstring themselves as they seek to do more with less. While it is well established that talented employees are significantly more productive and profitable, there can a fine line between stretch goals and burnout even for talented performers.
Greenhalgh says such an approach is not sustainable. While the challenge of doing more with less has been around for some time, he says there is a point where companies can’t do any more than with what they’ve got. “If you just expect people to commit to an extraordinary amount of hours above and beyond 40 to 50 hours per week, the long-term impact is that people will be burnt out, disillusioned and unproductive. Quite frankly, the long-term impact is that you’re going to have a lot of broken people,” he says.
“It doesn’t take long for resentment to build up, and that will manifest itself in attitude, productivity and performance. There’s a sense of being on the hamster wheel, where you’ve been asked to do one revolution a year, then one and a half, then two. This builds up the resentment and people fall out of love with their company.”
This has a big impact on engagement, which is pivotal to discretionary effort and productivity. “It’s hard to have an engaged workforce if they’re resentful. Even in the short term, that drive to get more out of less is not always productive. So at a time when you need high levels of engagement, you can find yourself operating a business with low levels of engagement,” Greenhalgh says.
Holmes agrees that such an approach to work/life balance is not sustainable. “You have to consider the health, safety and wellbeing of staff, and the feedback is that they will cope for [only] a while,” she says. “The X and Y generations I talk to have no fear of looking for alternative work and want a job where the work is satisfying and the pressure is bearable.”
Flexibility: reshaped for the worse?
Juliet Bourke, a partner at management consultancy Aequus Partners, is not entirely comfortable with where the “reshaped” argument for flexibility is heading. While workplace flexibility can reduce overheads and boost productivity, she is concerned that the point of workplace flexibility has shifted - and not for the better.
Bourke, who recently launched www.workplaceflexibility.com.au to assist companies in developing flexible work practices, said: “I am concerned that the whole paradigm has shifted to something a little negative - that is, flexibility is now about ‘How we get more out of fewer people?’, and I fear for the unintended consequences of this line of thinking.
“Will employers see the economic crisis as an opportunity to push flexibility in ‘nasty’ ways? Would they reduce an employee’s hours when that is not needed, or to make [other] staff work even longer? Have we done enough to embed a win/win, or mutual respect approach, to ensure that employment practices will benefit both employers and employees?” she asked.
Flexibility at Allens Arthur Robinson
Jacqui Abbott, head of flexibility and diversity for Allens Arthur Robinson, completed a PhD in 2005 which looked at work/life benefits from management and employee perspectives in large multinational organisations. The findings clearly showed that the only benefit that was requested universally - both vertically and horizontally across organisations to support work/life balance - was flexibility.
Responding to employee feedback, Abbott says the firm launched a comprehensive flexibility program in early 2008, which was sponsored by chief executive partner Michael Rose. “Flexibility is positioned as a two-way relationship between employees and the business, assisting employees better manage responsibilities in and out of the workplace. The positioning of flexibility as a priority for the firm has not changed with the downturn; in fact it continues to expand,” she says.
There are three to four flexibility discussions per week with employees, partners and/or directors to discuss ways to optimise flexible working requests, according to Abbott. “We work with the business to develop sustained solutions for flexible working, utilising job redesign to accommodate new requirements and coaching to assist manage the change. A targeted one-on-one coaching session with a partner/director can significantly improve the success of a flexible working arrangement and has been a very effective strategy,” she says
In simple terms, Abbott says flexibility provides employees with the opportunity to increase their control over when, where and how their work is done. This enables employees to improve their work/life balance by better managing the tension between their responsibilities in and out of the workplace. From a business perspective, she says flexibility is also about more effective and efficient ways of working for all employees, regardless of whether they work part or full-time.
“Flexibility is about more efficient and effective ways of managing work and requires management and employees to work together to create sustained solutions. From my perspective the downturn creates an opportunity to invest in well managed and supported flexibility programs to improve bottom line outcomes,” she says.
James Allt-Graham, head of people, performance and culture for KPMG
There has been a decrease in demand from clients in some parts of KPMG’s business as a result of the downturn, according to its head of people, performance and culture, James Allt-Graham. “In response to this decrease, some people have elected to reduce work hours through our flexible work arrangements - they have been able to improve their work/life balance,” he says.
In Australia, Allt-Graham says, KPMG has had a wide-ranging employee engagement strategy since 2004. A key element of this strategy includes comprehensive programs for employee flexibility and employee assistance, and he says flexibility is essential in developing a diverse, adaptive and high-performing workforce able to meet current and future business needs.
In the UK, KPMG has offered a number of new voluntary flexible work and leave options in an attempt to avoid redundancies. Some of the options on offer - which are open to both partners and staff - include switching to a four-day working week, taking a long sabbatical on 30 per cent pay or between four and 12 weeks of partially paid leave. There are no plans at present for KPMG in Australia to follow the UK and introduce these new options, according to Allt-Graham.
Flexibility at Virgin Blue
Richard Tanner, general manager of people for Virgin Blue, says the airline is currently offering a number of flexible working options to employees to stay ahead of the game. Virgin Blue is reducing its fleet capacity by five aircraft, which equates to about 400 roles. In the 3-month timeframe the airline needs to effect this, it is planned that 200 roles will go through a hiring freeze and natural attrition, 100 staff be redeployed and the other 100 have been offered more flexible working arrangements, including part-time work, job sharing or leave without pay for 12 months.
“While change is unsettling for our people, we’re looking at innovative solutions for them. Rather than have our leaders sit down and work out who’s going, we have met with people and discussed the flexible working arrangements on offer and who would be interested in taking them up,” he says.
“I don’t expect there to be many retrenchments as a result of this, because the vast majority of this reduction will come through natural attrition, redeployment and flexible work practices. You have to remain as agile as you can in these times. Only 12 months ago there was a pilot shortage, so we want to retain this kind of talent in the business for when the economy picks up again.”