A cost/benefit view of occasional flexibility

In 2012, the Copenhagen Consensus Center asked a panel of leading economists to list in order of priority the most cost-effective ways to advance global welfare. What might one expect to see at the top of such a list? Tackle climate change? Extend protected wildlife areas? Work to reduce heart attacks? No to all three. The top contender: reducing undernutrition in preschoolers. Economists estimate that every dollar invested to improve young children’s nutrition has a payoff of $30.

The same counterintuitive cost/benefit logic also applies to improvements in the workplace. When employers think about raising productivity and morale, they tend to consider large-scale innovations in the way an organization does its business or wholesale revision of human resources policies. Yet research conducted recently by the Sloan Center on Aging & Work at ModernMedical—a large, regional medical provider in the United States—suggests that the biggest return on investment might come from a much humbler domain: occasional flexibility.

A hesitation to ask

We define occasional flexibility as the opportunity to take a few hours off work for personal reasons. What may seem like a small request from an organization’s perspective can have a profound effect on the life of an employee. Our research uncovered the tension that surrounds such requests.

Although we found clear evidence that occasional flexibility is important to ModernMedical employees and managers (see Figure 1), relatively few had actually requested time off during the two months preceding our survey (Figure 2). It is possible that the respondents had simply not needed time off during that period, but it is also possible that they hesitated to ask for it. Indeed, less than 40 percent of ModernMedical employees were “completely comfortable” requesting a few hours off during regularly scheduled hours (Figure 3). It may also be possible that employees make adjustments on the family side of the equation to avoid asking their bosses for adjustments on the work side. Such sidestepping does not show up in the data, so researchers cannot easily document it.

Figure 4 illustrates a cost/benefit approach to a hypothetical request for occasional flexibility.

As the first panel in this figure shows, from the employee’s perspective, the benefit of being granted time off—to see a child perform in a one-night-only school play, for example—could be enormous. The cost to the manager—in terms of time spent coordinating schedules, for example—is certainly real, but in our example it is assumed to be relatively low. In this case, the decision to approve such requests would be unambiguous to a social planner, weighing the benefits to the employee against the costs to the employer.

In contrast, from the manager’s perspective, the benefits to the employee might either not be taken into account at all, or might be heavily discounted. The second panel of Figure 4 illustrates the same cost/benefit decision from the manager’s perspective. The outcome is then the opposite of the social planner’s outcome: the request for time off is denied.

The rewards of mutual understanding

Open communication is one straightforward way to help ensure that managers take into account the employee’s benefit when they consider requests for occasional flexibility. After all, the height of the gray bar in Figure 4 is unknown to the manager, unless the employee relays this information accurately.

Just as it is critical for a manager to appreciate the benefit of occasional time off to an employee, an employee needs to understand the costs that a manager associates with such requests. The employee’s understanding of the height of the red bar in Figure 4 will be some comfort when requests are denied, as they inevitable will be from time to time.

The biggest bang for the buck in the realm of workplace flexibility may come from improving the process that employees use to request time off. The findings from our discovery process and comprehensive baseline survey tell us that employees at ModernMedical place a high value on their freedom to make occasional requests for time off. Accommodating these requests may seem minor to a manager or to an organization, but can have an enormous impact on employees and their families. The outcome of a request can determine whether or not an employee can attend a child’s holiday play, and have an experience that will last forever in memory. The loyalty the employer receives in return just might last forever, too.