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Don't HR Alone #52 - Telecommuting Myths, and Wellness ROI

Did Yahoo End a Telecommuting Trend in 2013?

In early 2013, Yahoo CEO Marissa Mayer changed a policy that rocked the company’s happy nerd culture. She banned telecommuting, the popular practice that allowed employees to work from home or another remote location outside of the Yahoo offices. The official Yahoo memo from HR head Jackie Reses stated that, “Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.” Although less than 2% of the company’s 12,000 employees were full-time telecommuters when the memo was published, many had arrangements that allowed them to work from home one or more days a week. In March 2017, IBM followed suit and rescinded its long-standing work-from-home policy in an effort to foster more collaboration.

Is telecommuting a thing of the past? Does it mean an end to collaboration and culture if employees aren’t in an office together? Not necessarily. Numbers don’t lie According to the 2017 State of Telecommuting in the U.S. Employee Workforce report, telecommuting is on the rise with a 115% growth in the past decade. In fact, many well-known companies offer remote jobs. Although plenty of sources cite millennials as the driving force behind telecommuting policies, half of telecommuters are 45 or older and most are in management positions. So, Yahoo and IBM did not start an in-office only trend. But employers may still be hesitant to allow telecommuting for a variety of reasons. Busting a myth: productivity One fear employers may have about allowing employees to telecommute is the fear that employees will be less productive working outside of the office. The truth is, study after study finds the opposite is the case. Without the distractions of an office environment, remote workers are more efficient and productive and have lower rates of absenteeism. And, without the hassle of a commute, remote workers experience less stress. Busting a myth: job satisfaction Employers may also have concern that remote employees won’t feel connected to the company and its culture. In fact, one study found that remote employees reported higher morale than in-office workers. With high job satisfaction and regard for their employer’s flexibility, remote workers are more likely to stay in their jobs, too. With the variety of means available to boost connection and engagement—from Skype to social media—it’s easier than ever for remote workers to stay connected to their colleagues and collaborate from afar. Money talks Both employers and employees save money when employees telecommute. Full-time telecommuters save an average of $4,000 per year in commute expenses. Employers, according to the 2017 State of Telecommuting in the U.S. Employee Workforce report, “can save over $11,000 per half-time telecommuter per year.” And the high job satisfaction rate enjoyed by telecommuters means less employee turnover, a huge cost savings to employers. Great, but what about me? So what does all this money savings and job gratification mean for employers? Should all employers institute a telecommuting policy? It depends. Companies nationwide are feeling the strain of competing for top talent. If that sounds like your business climate, then redesigning your company’s talent management strategies to attract the smartest and most accomplished employees and then keep that top talent engaged could be in order. And putting a telecommuting policy in place may be just the ticket. In addition to full flex jobs and full-time telecommuting, occasional telecommuting and alternative schedules are other options that can be molded to fit both employees’ and the company’s needs. Savvy companies are seeing the trend and aligning work processes, systems, and talent management programs to allow for this flexibility. Make it official If allowing employees to telecommute some or all the time feels right for your business, take the time to think through policies and guidelines and publish them for employees. Some things to consider are:

  • Eligibility—who is, or what types of positions are, eligible to work a telecommuting schedule?

  • Schedule—what hours are employees required to work when telecommuting?

  • Furniture, equipment, software and supplies—what will the company provide?

  • Confidentiality—what measure will be put in place to ensure company and customer materials are safeguarded?

  • Workers’ compensation and liability insurance—what is your company’s policy covering personal injuries that occur during a telecommuter’s workday?

Consider, too, how to end a telecommuting arrangement. Map the process a manager can follow when deciding that business needs or employee performance no longer support a telecommuting schedule for a particular employee or if the employee requests a return to a company work location. When Yahoo abruptly ended its telecommuting program, much of the criticism aimed at the company was at the “how” it was done, not at the “why.” Thinking through and documenting the details could prevent headaches down the road.

Wellness programs found to boost employee wellness, productivity — SURVEY RESULTS

Nearly 90 percent of companies in the United States use some form of employee wellness program—from gym memberships to health screenings to flu shots—all designed to improve health. But how do these wellness programs affect everyday employee productivity? Is it possible to do a job better as a result of feeling better on the job?

A study by Olin Business School, UCLA Anderson School of Management, and University of California at Riverside, forthcoming in the journal Management Science, empirically tested how wellness programs affect worker productivity. The research paired individual medical data from employees taking part in a work-based wellness program to their productivity rates over time. As noted in a recent write-up of the research in the Wall Street Journal, it has been challenging for researchers to link daily employee productivity data to comprehensive measures of employee health, and whether and how these measures changed after introduction of a wellness program.

"When you give people the tools and the opportunity to be physically and mentally healthier, it's not just that they're more likely to be at work," said Lamar Pierce, professor of organization and strategy at Olin Business School. "Those employees are also more likely to be productive."

Pierce and co-authors Timothy Gubler, assistant professor of management at the University of California-Riverside, and Ian Larkin, assistant professor of strategy at UCLA Anderson School of Management, used data from an industrial laundry company that provides a free, voluntary wellness program each year to its employees. They matched a three-year panel of medical data for 111 employees with their work performances, which were accurately measurable by the number of pieces or tasks completed in a factory setting. The researchers also used self-reported data from the employees, as well as evaluations from physicians who examined each employee's medical progress as the program continued. All information was kept confidential and anonymous.

"We were able to compile comprehensive data on employee health, spanning 42 separate blood tests and a detailed survey of health and lifestyle habits," Gubler said. "Then we were able to link this data, and how it changed after the wellness program, to daily productivity records for the employees. The ability to link such detailed health data to records of employee productivity was unprecedented."

The researchers compared data for employees that participated in the health plan to employees at a different plant from the same company who weren't offered the wellness program. The results were striking and significant: The researchers found wellness programs boosted health and productivity. Participating employees' productivity jumped by between six and 11 percent compared to those who didn't participate in the program, with the largest gains for those who improved their health. When further quantified, that figure equaled a 76 percent return on investment for the company after introducing its wellness program.

"Companies have traditionally focused on the reduction in absenteeism and insurance rates when calculating the ROI of these programs," Larkin said. "Our research suggests that a reduction in 'presenteeism' – showing up to work with low energy and therefore lower levels of productivity – may be the primary benefit of these programs. The longest-lasting productivity gains came from employees who improved their lifestyle habits. In fact, even healthy employees who were spurred to adopt a healthier diet, exercise more or reduce stress via the wellness program exhibited strong growth in daily productivity."

The authors offer a caveat to companies that might be interested in putting an employee wellness program into place and practice. There are definite factors that can make or break the program, and the resulting ROI. Employee buy-in is a must. "The company we studied didn't try to force people into doing this, they respected their privacy and they have a long relationship and tradition of treating their employees with respect and maintaining that trust," Pierce said.

Source: UCLA Anderson School of Management.

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