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In the middle of an economic and jobs crisis, why should any politician or executive focus on a “soft” issue like work-life policy? Most are thinking about “hard” problems that affect U.S. competitiveness, like the shortage of skilled labour and the growing threat of foreign competition.But there are some very real costs associated with inflexible workplaces: distraction, disengagement, and attrition of valuable employees, which leads to reduced productivity.
The American Management Association reports that the estimated cost of replacing employees ranges from 25 per cent of their salary to five times their salary — and that doesn’t include the financial impact of lost productivity, or the impact on morale.
Various cross-cultural studies demonstrate how far our country is falling behind. For example, International Perspectives on Work-Family Policies: Lessons from the World’s Most Competitive Economies (PDF) reviews work/family policies in 15 countries ranked in the World Economic Forum’s list of the 20 most competitive countries over a period of years — plus China and India, as rising global powers. The findings show that:
- Every country with low unemployment has national legislation ensuring paid leave for new mothers that ranges from 12 weeks to a year — but the U.S. doesn’t.
- Nine of the low-unemployment countries also ensure some period of paid leave for new fathers — but the U.S. doesn’t.
- Eight of the low-unemployment countries provide paid leave that allows parents to address children’s health needs. In the U.S., the Family and Medical Leave Act provides qualified employees with 12 weeks of unpaid, job-protected leave, but approximately half of Americans don’t even fall under the reach of the law.
So that’s correlation — or at least demonstrable compatibility — between performance and good work/life policy on the macro level. What about on the micro level?
Several academic centres around the country are researching the connection between work-life programs and improvements in companies’ financial performance and benefits to the public.
For example, a recent study by the Rutgers centre for Women and Work stated that women who took paid leave after giving birth reported “stronger labour force attachment” and were more likely to be working nine to 12 months later. The study also showed a reduction in receipt of public assistance among both men and women who returned to work after a paid leave.
The Boston College centre for Work & Family has published Executive Briefings (PDF) which analyse work-life policies in other countries.
For example, Germany provides funding to new parents, and all working parents have the right to ask for parental leave until their children are three years old, with the right to return to the same or comparable position within the company where they work.
The Swedish government provides significant support for working families, and was the first country in the world to offer paid parental leave to fathers. Sweden’s generous family support and laws pertaining to equal opportunity landed the country a fourth-place ranking in the World Economic Forum’s Global Gender Gap Report. The United States ranks 17th.
Research in this field consistently shows that flexible policies reduce attrition and increase employee loyalty, and that both businesses and the government have a role to play. If other countries can support working families without a negative impact on their global competitiveness, why can’t the U.S.? Perhaps the economic crisis should be seen as an impetus for both the government and workplace leaders to recognise and emphasise the connection between work/family flexibility and workplace success.
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