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When the Going Gets Tough - Get Flexible! - Flexible Work Options in the Private And Public Sectors

A Strategy to Retain Workers in Tough Economic Times

06 October 2009—The headlines of the past year have been dominated by news of the global economic crisis. Budget cuts, business closings, job layoffs, and more have taken center stage, painting a picture of both private sector companies and government agencies tightening their belts and battening down the hatches to weather the storm.

Despite the onset of the worldwide recession, it is interesting to note that some employers see value in workforce practices that are decidedly forward-looking. One such practice is providing access to flexible work options for their employees.

According to a recent study from the Family and Work Institute (FWI) as well as the ongoing research of the Sloan Center on Aging & Work at Boston College, workplace flexibility is high on employers’ lists of workforce benefits they offer, and the practice is growing. The new FWI report, The Impact of the Recession on Employers, found that in the past year, 81% of employers have maintained existing flexible work options and 13% have actually increased those options, while only 6% of employers have reduced them. These flexible options include telecommuting, compressed workweeks, voluntary reduced hours, and phased retirement.

The report also noted that one-quarter (26%) of employers reported specifically using flexible workplace options to minimize the need for layoffs in these tough economic times.

Private vs. Public Sector Priorities

In its States as Employers-of-Choice Survey (2009) and National Study of Business Strategy and Workforce Development (2006), the Sloan Center on Aging & Work has found that private sector companies and public sector agencies share many of the same economic and workforce pressures and goals (such as increasing productivity, workforce management, and cost leadership), although to varying degrees of priority.

One notable difference is in their responses to the importance of flexible staffing. Three-quarters (77.3%) of public agencies reported offering flexible staffing as a high priority, compared to just 61.6 % for private sector organizations.

The reason for this lies in the major demographic shift that is taking place in the American workforce as it relates specifically to the makeup of workers in the public sector. As the baby boom generation ages, there are now more people above the age of 50 in the workplace than ever before. According to U.S. Bureau of Labor Statistics projections, the percentage of workers aged 55–64 will increase by 36.5% between 2006 and 2016, while the percentage of workers aged 65–74 will grow by 83.4%. By contrast, the percentage of younger workers (25-54) will grow by only 2.4%

For state agencies, offering flexible work arrangements to employees can be seen as a response to a unique characteristic of their workforce demographics: The Census Bureau reports that nearly one-quarter of the workers in state agencies are 55 years of age or older, compared to only 16.7% in the private sector. Since most older workers who want to remain in the workforce say that the typical 8-hour day/5-day workweek is not the employment structure they desire, promoting workplace flexibility is a strategy that state agencies can use to retain those older workers and recruit workforce talent.

Nearly two-thirds of state agencies surveyed also stated that they offer flexible work options because they believe it improves employee morale (63.2%). Other top motivators included: helping employees manage work and family life, retaining employees, and responding to requests for flexibility from employees themselves.

Retaining and Recruiting Older Workers

With the vast majority of states experiencing budget shortfalls in 2009 that are projected to continue into 2010, states were asked about the top threats that could make it difficult for them to fulfill their missions. The most common threats cited in the States as Employers-of-Choice survey were decreases in funding/revenue and an inability to recruit and retain the staff needed.

These concerns were echoed in agencies’ responses to questions about the priorities they see as “important” and “very important” to achieving their mission. The states identified four top priorities: increasing productivity through increased efficiency, management of workforce talent, organizational ethics, and cost leadership. (See Figure 1.) Other priorities identified as critical to meeting agency objectives included: increasing service units and products, offering flexible staffing options, market niche, and cutting personnel costs.

Interestingly, both state agencies and private sector employers identified flexible work opportunities as a way to meet the key challenges of increased productivity through increased efficiency and management of the workforce. Employers can utilize flexible work options as a cost-effective way to encourage older workers to work past traditional retirement age, thus maintaining their company, or agency’s institutional knowledge, which is largely in the hands of older workers, while encouraging knowledge transfer and leadership training.

about the studies

The States as Employers-of-Choice Survey was conducted in 2009 in order to assess state agencies' level of awareness and understanding of demographic changes, help them assess their response to the aging workforces, and contribute to planning for possible action steps. The National Study of Business Strategy and Workforce Development was a 2006 survey of for-profit and nonprofit organizations that examined, among other things, organizational priorities in the private sector.