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Impact of flexible work arrangements on retention in organizations in the United States

ABSTRACT:

In recent years, there has been a greater demand for flexible work arrangements (FWA) among workers in the United States. In today’s workplace, workers are often managing multiple tasks at once, both work and personal. Thus, they seek more of a work-life balance. At the same time, organizations are examining ways to retain high quality talent while improving the morale and working conditions of their employees. This study seeks to understand the impact of flexible work arrangements on retention in organizations in the United States. There are multiple different FWAs available, such as schedule flexibility, remote working, and compressed working hours. Although this study does not focus on one specific FWA, it does provide insight on the impact of employee retention and organizational performance.


Impact of Flexible Work Arrangements on Retention in Organizations in the United States

The purpose of this review is to evaluate and synthesis studies that focus on the relationship between flexible work arrangements and staff retention. De Menezes and Kelliher (2011) argued that flexible work arrangements “can contribute either directly or indirectly to improvements in individual and/or organizational performance and therefore would be good for business” (p. 452) and that “initial findings on the impact of specific FWAs on retention were mixed, but recent results increasingly support a direct link” (p. 458). Thus, the research question that drives this study is “What impact does flexible work arrangements (FWA) have on employee retention in organizations in the United States?”

Systematic Review

This study is conducted in the form of a systematic review. Systematic reviews are a rigorous and transparent process in identifying, evaluating and synthesizing qualitative and quantitative studies to generate empirical evidence to answer a specific research question (Mallet, Hagen-Zanker, Slater, & Duvendack, 2012). Systematic reviews, unlike literature reviews, rely heavily upon the use of “objective, transparent, and rigorous approach for the entire research process to minimize bias and ensure future replicability” (Mallet et al., 2012).  According to Gough (2017), these six rigorous steps include formulating or clarifying the problem, finding studies within the scope of the research question by establishing eligibility criteria for resources that will later be used in the systematic review, developing a conceptual framework, synthesizing the resources, appraising the resources for relevance and quality of evidence, and then engaging stakeholders to interpret and make use of the evidence.

Review of Literature

There has been a decline of single-income earning families, changing the composition of the United States workforce in the last few decades (Frank & Lowe, 2003). Additionally, other issues such as rising education levels, increasing competition, higher standards of living, attitudes toward work, and the emergence of technology have made organizations vulnerable to the change in the workplace (Khan & Agha, 2013). The shift of single-income earning families means that these dual-earner couples have other responsibilities outside of their professional careers. As a result, organizations are experiencing an increase in demands from employees to offer flexible work arrangements that enable them to have a work/life balance (Frank & Lowe, 2003). Consequently, to address the needs of current and future employees, and to attain and retain employees, organizations have responded by offering flexible work arrangements (Frank & Lowe, 2003). The prevalence of flexible work arrangements in organizations has become a global trend (Choi, 2018). These flexible work arrangements have served as a “dual-agenda” to the organizations to meet business objectives and to provide greater opportunities and flexibility to employees (Hill, Ferris, & Martinson, 2003). According to McNall, Masuda, and Nicklin (2010), “research has revealed that flexible work arrangements are associated with a variety of important organizational attitudes and outcomes” (p. 63). Organizations that offer flexible work arrangements experience increase in employee satisfaction, reduction of overtime, increase in productivity and decrease in absenteeism (Baltes, Briggs, Huff, Wright, & Neuman, 1999). Furthermore, employees report that organizations that offer flexible work arrangements influences their decisions to join an organization, remain satisfied with their job, and plan on staying with their employer (Richman, Civian, Shannon, Hill, & Brennan, 2008).

There is a number of flexible work arrangements that organizations can provide to their employees. These include schedule flexibility, where the employee can decide when to arrive or leave work, remote working, where the employee can work from home or another remote location, or compressed working hours, where the employee works full-time hours in fewer days (de Menezes & Kelliher, 2011). According to a study by Galinsky, Bond, and Sakai (2008), 79 percent of American organizations with at least 50 employees offered flexible work flexibility, 50 percent offered remote working opportunities, and 38 percent offered compressed working hours opportunities. This study does not focus on one specific form of flexible work arrangements, but instead, understanding the impact of an organization offering flexible work arrangements on employee retention. Interestingly, Baltes et al. (1999) found that schedule flexibility is almost exclusively used in non-manufacturing organizations whereas compressed time is commonly used in manufacturing organizations. Thus, should the board accept the recommendations herein, consideration for which flexible work arrangement programs to implement should be carefully reviewed.

Thematic Analysis & Synthesis

Systematic reviews must not only yield meaningful and useful results, but they also must be conducted rigorously and methodically to be recognized and valued (Nowell, Norris, White, & Moules, 2017). According to Nowell et al. (2017) “qualitative researchers must demonstrate that data analysis has been conducted in a precise, consistent, and exhaustive manner through recording, systematizing, and disclosing the methods of analysis with enough detail o enable the reader to determine whether the process is credible” (p. 1). One research method that can demonstrate data analysis trustworthiness is through the thematic analysis research method.  King (2004) describes thematic analysis as a method where the “researcher produces a list of codes representing themes identified in their textual data” (p.256). A code is a word or short phrase that “symbolically assigns a summative, salient, essence-capturing, and evocative attribute for a portion of language-based or visual data” (Saldana, 2013, p. 3).  As the researcher “codes” each study, these codes are refined into major categories and sub-categories, eventually transcending the data into themes or concepts (Saldana, 2013). An advantage of a thematical analysis is that it is highly flexible, allowing for modification for the needs of the study in any area (King, 2004). Additionally, it forces the researcher to handle the data in a well-structured approach, which can help the research produce a clear, organized final account of a study (King, 2004).

To answer the research question “What impact does flexible work arrangements (FWA) have on employee retention in organizations in the United States?”, thematic analysis was conducted on the ten studies that were included in this study. After coding the ten studies, three themes were identified across the studies. One theme was present in all ten studies, while the other two themes were present in several the studies.

Theme One: Flexible Work Arrangements Improve Employee Retention

The only theme that identified across all ten studies is that flexible work arrangements improve employee retention. In fact, according to Richman et al. (2008), “results indicate that perceived flexibility and supportive work-life policies have significant independent effects in predicting employee engagement and expected retention even after controlling for several personal, family, and job characteristics” (p. 194). Moreover, not only do flexible work arrangements serve as a predictor of employee retention, but according to Richman et al. (2008), while perceived flexibility influences employee retention, even occasional use of flexibility is associated with increased engagement and retention. Baltes et al. (1999) found that not only do flexible work arrangements improve employee retention, but that flexible work schedules have positive effects across all the criteria they were considering, such as work productivity, job satisfaction, and absenteeism. Choi (2018) found that not only do employees who are offered flexible work arrangements demonstrate lower intention to leave, but they also demonstrate higher organizational satisfaction. Moreover, according to Choi (2018), “employees who demand a flexible arrangement, but are not offered it, were likely to show higher intention to find an alternative job that provides the arrangement” (p. 30). Choi’s (2018) assessment appears to be shared by Eaton (2003), in which the study concludes “perceived usability of flexible work-family policies is important to employees” (p. 163), a concept the study refers to as perceived usability, a way to understand whether flexible work policies that exist are meaningful to employees.

Hill et al. (2003) suggest that one reason why flexible work arrangements might improve staff retention is that autonomy plays a key factor. Eaton (2003) concluded that “the design of work-family programs and work structures and the number of control employees have over the pace and place of their work are all-important” (p. 163). Employees who are looking for more individual control over the aspect of their work and living arrangements may be more willing to remain with the organization. Johnson (1995) found that these programs have a significant impact in the employees’ decision to stay with the organization, even if the employee did not participate in the program themselves. Not only are these programs perceived to provide work and life enrichment to the employees, which decreases turnover intentions, but perhaps because these arrangements are an indication that the organization cares about the employees’ work and life balance (McNall et al., 2010). Thus, McNall et al. (2010) suggest that organizations that are perceived by their employees to care about how they lead fulfilling lives outside of work are more likely to reciprocate in the form of more positive attitudes, higher job satisfaction, and lower turnover intentions. Choi (2018) found that employees who were unable to participate in flexible work arrangement due to barriers reported higher level of turnover intention, yet those employees who expressed no interest in participating, although had the option, demonstrated the lowest level of turnover intention.

Theme Two: Flexible Work Arrangements Improve Job Commitment

The second theme that was observed across several of the studies is that flexible work arrangements improve job commitment. Several the studies found that the reason why flexible work arrangements may improve job commitment is due to the employees’ interest in career success. Flexible work arrangements facilitate the attraction and retention of top talent, individuals who desire to increase productivity and job commitment for the desire for career progression (Leslie et al., 2012). Frank and Lowe (2003) found that employees who were on flexible work time were likely to accept challenging job responsibilities with the perception of job growth. According to Hill et al. (2003), “employee in both the virtual office and home office were more likely than those in the traditional office to report that they would be willing to put in extra effort to help the company succeed” (p. 233) and that “virtual office workers and home office workers were more likely than traditional office worker to view their opportunity for career advancement optimistically” (p. 233).

Richman et al. (2008) encourage organizations to consider flexible work arrangements as they have found that these policies are essential management practices that contribute to business success through employee engagement. Additionally, access to these flexible policies may be necessary for employees to become more committed to an organization and feel more productive (Eaton, 2003). Khan and Agha (2013) describe flexible work arrangements as a “win-win situation, a balance of the diverse workforce that promotes employee commitment, improves productivity, and reduces turnover, employee conflicts, and unethical business practices” (p. 107). Moreover, according to Guimaraes and Dallow (1999), as cited by Choi (2018), “if employees perceive that their organization offers them preferable conditions or benefits, employees will reciprocate demonstrating higher loyalty and commitment to their organization” (p. 30).

Theme Three: Flexible Work Arrangements Improve Job Satisfaction

A third theme emerged from the thematic analysis in that flexible work arrangements improve job satisfaction. An organization that seeks to attract and retain talent must employ policies that enhance employee job satisfaction, which can translate to business growth and success.  According to Baltes et al. (1999), “flexible work schedules favorable influenced productivity, job satisfaction, absenteeism, and satisfaction with work schedule” (p. 505). Likewise, Frank and Lowe (2003) found that employees who participated in flexible work arrangements reported lower levels of burnout, higher job satisfaction, and higher levels of intentions to stay than those on a traditional work arrangement schedule. McNall et al. (2010) examined the relationship between policies that encourage work-life enrichment and job satisfaction and found that those employees who participated in these policies reported higher job satisfaction. “In turn, individuals experiencing more positive emotions about their work should experience higher job satisfaction and lower turnover intentions” (McNall et al., 2010, p. 66).

McNall et al. (2010) and Choi (2018) theorize that the social exchange theory can explain why flexible work arrangements improve job satisfaction. According to Rousseau (1985), as cited by Choi (2018), “social exchange theory explains the employee-employer relationship relying on the norm of reciprocity and social contracts” (p. 30). Thus, when an employee perceives that their organization is helping them manage a work-life balance, the employee feels compelled to return the favorable treatment in the form of positive job satisfaction and organizational commitment (McNall et al., 2010).

Recommendations

The thematic analysis has brought to light the answer to the research question that drives this study, “What impact does flexible work arrangements (FWA) have on employee retention in organizations in the United States?” Thus, this study puts forward three recommendations an organization should consider when considering improving staff retention.

Recommendation One: Implement Flexible Work Arrangements

The first recommendation is an obvious recommendation: implement flexible work arrangements in the firm.  As this review has demonstrated, flexible work arrangements reduce staff turnover, improves job commitment, and job satisfaction. More importantly, when an organization offers employees flexible work arrangements, these policies are perceived by the employees that the organization cares about their well-being and work-life balance (Richman et al., 2008). According to Johnson (1995), an organization that offers flexible work arrangement programs are twice as likely to experience employees reporting burnout and dress. “Employer programs do not erase the difficulties of balancing responsibilities, but they do provide resources for employees to manage and solve their own problems” (Johnson, 1995, p. 3). Almer and Kaplan (2002) concluded that employees that participated in flexible work arrangements lower levels of burnout and stress than those employees that did not participate. Richman et al. (2008) also found that “flexible schedules, part-time work, and job sharing reduce stress, improve morale, and increase employees’ sense of competence at home only when they also have a greater sense of control over their time or when the work overload is reduced” (p.186).

Recommendation Two: Communicate and Support These Policies

While it is notable that the firm will implement flexible work arrangements with the intention of lowering employee turnover and improving employee morale, there must be communication and active support for these policies.  Khan and Agha (2013) concluded that not only does HR play a catalyst role in the elements of the introduction of a flexible work arrangement program, but that “communication is the key to engaging people effectively. It is highly recommended to publicize the progress and efforts” (p. 109). More importantly, Khan and Agha (2013) concluded that “CEO and top managers have to play an important role in establishing the sense of seriousness and urgency for the program. Involvement of line managers is the key and it is important to establish their acceptance and readiness” (p. 109). Frank and Lowe (2003) found that some employees were reluctant to participate in flexible work arrangements as participation could jeopardize their career potential by negatively influencing their managers’ perception of their commitment to the organization. This could be because employees fear that they will lose contact with the informal networking and relationships in the office to help progress their careers (Hill et al., 2003).  Thus, Johnson (1995) found that a supportive supervisor and workplace culture was often associated with employee’s appreciation and use of flexible work arrangements. More importantly, Baltes et al. (1999) state that it should be “clear that employers and employees are well advised to work together to ensure that alternative work schedules provide the most positive benefits to individuals and organizations” (p. 510). Employees will positively receive strong communication and support for these policies from the CEO down, and thus, they will engage in these flexible work arrangements, resulting in significant positive business impacts. This is supported by Khan and Agha (2013) where they state that “the last and most important aspect is to institutionalize the efforts and create an environment conducive to the initiative. It is also recommended to revise the HR policies to facilitate the right reinforcement to achieve the goals” (p. 109).

Recommendation Three: Annual Survey

Exit surveys play a critical role in understanding why an employee is separating from an organization. The third recommendation is to conduct an annual review to develop metrics and to understand better what policies and programs can be offered that will create an environment of trust, commitment, and satisfaction. Khan and Agha (2013) state that “it is necessary to develop metrics and the firm must design a system for reviewing, evaluating and updating its work-life balance initiative” (p. 109). Thus, the firm should commit to sending out an annual survey to ensure that employees concerns are being heard and can be addressed before the employee looks for employment elsewhere. Additionally, the survey can serve as a control group to see if the evaluations the following year have improved with the implementation of flexible work arrangements and other policies.

Limitations

There are a few limitations of this study that must be disclosed. First, this study was conducted by one author. Generally, systematic reviews go through a rigorous and transparent process, and part of this process involves multiple authors. Multiple authors, as discussed, ensure transparency, rigor, and reduces bias. Additionally, any disagreements in the development of a systematic review can be discussed between the authors.

The second limitation is that this study was restricted to ten articles. While ten peer-reviewed articles can help develop strong recommendations, additional articles could provide stronger empirical evidence and shed new information about the impact of flexible work arrangements on staff retention.

The third limitation concerns the articles. During the screening process, it is possible that articles that were peer-reviewed where not included if they were not freely available or if it was not clear that the scope of the study focused on organizations in the United States.

Conclusion

This study has concluded that there is a definite impact of flexible work arrangements on staff retention in organizations within the United States and directly answers the research question “What impact does flexible work arrangements (FWA) have on employee retention in organizations in the United States?” This impact is equally positive for the organization and the employees. However, it is important to make note that the implementation of flexible work arrangements must be supported through all levels of the organizations. More importantly, there will be changes to the policies as employees adopt these policies and management must be supportive of the policies change and employees transition into their new flexible work arrangements. Khan notes that “institutionalizing a program goes through many reforms and challenges, and the key managers have to take the responsibility to overtime the conflict to establish the primacy of the work-life balance program initiatives” (p. 110). Additionally, according to McNall et al. (2010), “organizations looking to attract and retain top talent should consider how to facilitate work-family enrichment by offering specific policies that permit greater flexibility, which may indicate an overall supportive work environment” (p. 77).  In summary, this study provides  valuable empirical backed evidence to implement flexible work arrangements that will positively impact staff retention as well as other positive organizational benefits, such as job and organizational performance.

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Cite this article (APA suggested format):

Rodriguez, R. (2018, December 23). Impact of flexible work arrangements on retention in organizations in the United States. https://www.robertrodriguez.net/impact-on-flexible-work-arrangement-on-retention-in-organizations-in-the-united-states/.
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