Flexible Work Options Can Boost Growth & Productivity

Flexible Work Options Can Boost Growth & Productivity

As the widening gap between jobs and workers qualified to fill them is undermining productivity and growth at U.S. companies of all sizes, adopting flexible work models can help employers attract talent, while improving employee engagement and productivity and boosting the U.S. economy, according to a study conducted by the Centre of Economics and Business Research (Cebr) with support from Citrix Systems.

The report’s findings are based on data from an online survey of 2,502 U.S. knowledge workers conducted in July. The aim of the study was to determine the potential value to the U.S. economy of a move toward a more flexible working culture by extrapolating the survey findings for each of the demographic groups represented in the sample to the U.S. knowledge worker population. The analysis showed that the total potential U.S. economic gains from a flexible working culture could amount to $2.36 trillion in gross value added (GVA) per annum, with 88% of the total potential boost to GVA coming from individuals who are currently unemployed or economically inactive rejoining the labor market, and the remainder contributed by productivity improvements among individuals currently in work.

The survey found that 69% of respondents who are currently unemployed or economically inactive because they are, for example, retired, full-time homemakers, or caregivers, indicated that they would be encouraged to start working if given the opportunity to work flexibly. The results also showed that 65% of respondents who reported that they currently work part-time said they would be inclined to work more hours if they could work remotely.

In addition, the findings indicated that if provided with the opportunity, 95% of the knowledge workers polled who are currently employed said they would like to work from home 2.4 days per week, on average. Moreover, between 60% and 70% of respondents said they would be willing to work from other locations, including local coffee shops and shared workspaces, one to 1.3 days per week, on average.

The survey also found that 86% of respondents who said they currently have the option to “work from anywhere” take advantage of this opportunity. Among current remote workers, 73% of respondents reported that flexible working improves their personal well-being and ability to balance work with outside activities, 69% said it improves their job satisfaction level, and 60% indicated that it facilitates their professional development (60%). Broken down by demographic group, working remotely was found to be most popular with respondents aged 16-55 who are currently working and have dependent children, with 92% of these respondents indicating they would use flexible working if the option was available.

When asked about the potential productivity benefits of working from home or from other remote locations, large majorities of all workers surveyed said they believe virtual/remote working would enable them to save money (72%), reduce their stress levels (70%), allow them to work at a pace or at hours that suit them (72%), make them more productive (71%), help them achieve better work/life balance (74%), enable them to get more work done as they would spend less time commuting (68%), and help them concentrate better because they would have fewer distractions (66%).

Companies Increase Their Use of Pay-For-Performance Incentives

Companies Increase Their Use of Pay-For-Performance Incentives

More than 60% of large-cap companies provide at least half of CEO equity compensation through performance incentives, up from just one-third five years ago, according to a report on equity compensation trends recently published by executive compensation benchmarking firm Equilar.

The report’s findings, released on September 20, are based on an analysis of the Equilar 500, an index that comprises the largest U.S.-listed companies by revenue adjusted to approximate the industry sector mix of similar large-cap indices. The study examined the equity compensation design and granting practices of Equilar 500 companies, and tracked these data for those companies over the last five fiscal years.

The results of the analysis showed that the percentage of companies in the index that provided at least half of CEO equity compensation based on performance awards increased from 52.5% in the fiscal year 2015 to 60.8% in 2016; and that the total share of Equilar 500 companies providing CEO performance awards has increased significantly over the past few years, from 69.7% of companies in 2012 to 82.1% of companies in 2016.

According to the study, the remaining portion of equity compensation was time-based, which means that awards vest at specific time periods, rather than being contingent on meeting particular performance goals to become eligible to receive allocations of stock or stock options. The research indicated that most CEOs continue to receive time-based as well as performance awards, with nearly 40% of companies in 2016 providing a majority of equity compensation in the form of time-based awards. However, the study also found that a growing share of these time-based awards are being provided as restricted stock, rather than as stock options.

Broken down by sector, the analysis showed that 90.5% of industrial goods companies, 86% of healthcare companies, and 84.6% of utilities provided performance awards to CEOs in 2016. The technology sector saw the largest growth in the percentage of companies offering performance awards to CEOs during the study period, increasing from 63.7% in 2012 to 82.3% in 2016.

From Benefit Trends Newsletter, Volume 60, Issue 10

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Conventional Performance Management Approaches Are Challenged

Although companies are spending substantial amounts of time and money on performance management, too few business leaders are confident that their approaches are supporting the workforce of the future or improving the performance of the business itself, a report released by Accenture Strategy has warned.

The findings of the report, “Is Performance Management Performing?” are based on a survey conducted December 2015 to January 2016 of 2,100 leaders and employees from organizations across North and South America, Europe, and Asia Pacific. The survey showed that while 94% of the respondents agree that performance management improves business performance, only 34% believe their organization’s current performance management approaches effectively support the delivery of business objectives, and just 32% think performance management is providing a clear line of sight between organizational and individual performance. Moreover, 89% of the employees surveyed said they believe their performance would significantly improve if performance management were changed.

Less than half of respondents expressed confidence in their company’s capacity to manage the basics of performance management, including developing and growing employees (40%), retaining employees (28%), engaging and motivating employees (40%), and making fair decisions regarding bonuses, pay raises, and promotions (36%). The leaders and employees surveyed indicated that they lack confidence in their organization’s management of more complex workforce needs, with only around one-third saying they think current performance management approaches effectively promote collaboration (35%) and creativity (32%).

Nearly half (48%) of the leaders surveyed said they think increased workforce diversity is creating a greater variety of employee motivations and expectations. In addition, 77% indicated they believe that personalizing performance management practices to individuals or groups is mandatory to meet the needs of the workforce of the future, and 41% of respondents said they believe that “one-size-fits all” performance management practices have a major negative impact on performance management. However, just 34% reported that their organization has moved away from standardized performance management approaches.

While 50% of the leaders surveyed said they believe that employees are increasingly looking for development and coaching opportunities, and 53% said they think that personalizing feedback and coaching would significantly improve employee performance; 52% of the leaders acknowledged that the annual review process is often used as an alternative to engaging in actual performance development, and 73% of the employees polled reported that they have not seen performance management practices move away from a focus on paperwork to a focus on conversations.

Yet researchers observed that some companies are experimenting with new approaches to performance management: for example, rewards can be allocated based on real performance data or survey data from all of an employee’s project leaders, or employees can determine rewards for one another in a crowdsourced approach.

From Benefit Trends Newsletter, Volume 59, Issue 5

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.