FlexPaths & LinkedIn Present Think Tank Findings, Flexible Work: Perceptions & Realities

FLEXIBLE WORK: PERCEPTIONS & REALITIESFINDINGS FROM THE FLEX PATHS -LINKED IN VIRTUAL THINK TANKSDECEMBER 2010

December 2010BACKGROUNDFlexPaths, a global leader in flexible working solutions, and LinkedIn, the next-generationbusiness networking and recruitment-solutions provider, conducted six online Think Tanksessions with 45 CEOs, senior HR professionals, and Workspace decision makers.Participation was real-time, and the discussion centered on the practical realities ofmanaging workers in the “new normal” of a global agile work culture. The sessions weremoderated by Digital-MR, a holistic digital market research specialist.Of the 45 participants in the Think Tanks: • 24 were Managing Directors or CEOs (mostly from companies with 200-700 employees) • 16 were senior Human Resources leaders (mostly from companies with over 1,000 employees) • 5 were senior Workspace/Property leaders (mostly from companies with over 1,000 employees) • Roughly 60% were based in the US, 30% were based in the UK, and 10% were based in other countries, including Spain, Argentina, El Salvador, and India. • Some were just starting to think about formalizing flexible work policies, whereas others were operating far along the continuum, with flexible work options being utilized by a significant proportion of the employee population.The groups were designed to be comprised of peers in terms of leadership level as wellas company size, and to span multiple industries. The goal was to enable theparticipants to brainstorm together, to exchange ideas and best practices, and to simplycollaborate around a topic of mutual interest.Discussions among the Think Tank groups focused on seven themes: • Defining Flexible Work • Drivers for Embracing Flexible Work • Predicting the Future • Barriers and Obstacles • Regulatory and Legal Landscape • Measuring Success • Software as a FacilitatorUltimately, it was clear that the companies of all shapes and sizes, across many industries,want to make their workforces more flexible, but that there are a wide variety of (mostlycultural) obstacles to be overcome first.CONFIDENTIAL 1

December 2010DEFINING FLEXIBLE WORKWhile there wasn’t clear consensus among participants about how to simply define“flexible work”, most gravitated to a range of broad definitions that included: • Flexibility Around “When” – allowing workers to work non-traditional hours and/or create compressed workweeks where 40 hours are ‘compressed’ into less “I think of flexible than 5 days a week or 80 hours into less than 10 days bi- work as allowing the weekly. change of focus to • Flexibility Around “Where” – enabling workers to be the customer and productive outside a main office some or all of the time, away from the including telework, remote office and hub office/factory arrangements, as well as work from cafes, airports, etc. arrangement of work. Every employee • Flexibility Around “How Much” – utilizing workers needs a customer – through reduced work hours, job-sharing, seasonality, an internal one or an “right-sizing” according to business cycles, offering external one.” sabbaticals, etc. George Weathersby, • Flexibility Around “How” – flexibility around the CEO employment agreement, using contract and freelance YPO International workers.Very few of the CEOs, who were generally running mid-sizedcompanies, had formal flexible work policies in place, but mostof those who did not, planned to, particularly in the UK where they were conscious oflegislation around flexible work. All of the HR and Workspace leaders from large not a singlecompanies had some form of flexible work policy in place, butparticipant felt that his or her company was “there yet” when it came totaking full advantage of flexible work.DRIVERS FOR EMBRACING FLEXIBLE WORKAmongst both CEOs and senior HR professionals, attracting and retaining toptalent was high on the list of reasons for embracing flexible work. Several remarkedupon how saving even a couple of high-performers from leaving had morethan paid for their flexible work initiatives. Interestingly, several CEOs remarkedthey were already being driven to incorporate more flexibility into role descriptions inorder to attract the best Generation Y talent. Others were particularly focused oncustomer service, and the potential for more engaged workers (given more flexibility intheir work) to better deliver to customers. Surprisingly, very few outside of theCONFIDENTIAL 2

December 2010Workspace leaders cited the reduction of office space or carbon footprint asmajor drivers. It is not clear why this was the case, given how much focus large playersare putting on both issues. We can only guess that neither is an issue that is truly at thetop of mid-market CEOs’ agendas, and that within larger organizations, HR leaders aremore focused on HR specifically, leaving physical space and environmental impact toother areas of the organization.Some CEOs saw flexible work as an obligation (forced by legislation, demanded byemployees, and or/necessitated by the economic crisis), whereas others, and all of theHR and Workspace leaders, tended to view it as an opportunity, remarking on higherproductivity, the ability to attract higher-quality employees, and significantimprovements in staff engagement and loyalty.One Managing Director significantly influenced herpeer group by telling the story of how she used “[Embracing flexible work] has already made us moreflexible work options to “right-size” her competitive. It’s probablybusiness in 2009, saving $1.5m in payroll the thing I am most proud ofwithout cutting any jobs. The result was an in my career so far.”operating margin over 20% (in the consulting industry),very high staff morale, and low staff turnover. At the Keryn James,end of the year, some employees chose to remain Managing Directorwith their flexible work arrangements, and others UK & Ireland(particularly younger people) asked if they could have ERMthe opportunity to take unpaid leave again in thefuture.PREDICTING THE FUTURE When asked for their visions of the workforce of 2015, the majority of participants expected significant increases in the proportion of their Food for Thought: workforces that would be engaging in flexible work, some forecasting as high as 80% or their What needs to happen to working population, but most predicting about move 50-80% of your workforce to flexible work 50%. Most participants struggled to say what proportion of workers were on flexible by 2015? arrangements today, and those who could generally cited numbers around 25%. The majority of CEOs acknowledged that embracingflexible work would be important to remaining competitive.CONFIDENTIAL 3

December 2010Most of the HR and workspace leaders were of the view that flexible working willmove from an exception basis to business as usual. Several stressedfrustration with the idea that there needed to be structure aroundarrangements for flexible work (inflexible flexibility?) andpointed out the paradox, but they also acknowledged thatsignificant culture change is required to get from today’s “Flexibility will just be“normal” to tomorrow’s “normal,” while avoiding a division the way work isof internal cultures, and that that would require somestructure as well as the ability to collect data. Some done.”participants were already making headway, but all felt that Stephan Klaschka,obstacles remained to be overcome and that education Director, Businessand support for managers - around not only why a Support Americasflexible workforce is worth having and how to facilitate it, Boehringer Ingelheimbut on the competencies of managing dispersed, global Pharmaceuticalsteams day to day, would be key to that.BARRIERS AND OBSTACLESMISUNDERSTANDINGS & MISCONCEPTIONSMany of the CEO participants originally thought of flexible work only in terms of “less”work, and hadn’t considered full-time contractors as falling into the flexible category atall. Several CEOs entered the conversation with the perception that “flexible working isfor mothers” or even “for slackers who want an easy life.” Some felt that flexible workwas something that was generally not requested by high performers. Others disagreedand pointed out that they were seeing younger employees, in particular, demandingflexible work. Some of the HR leaders pointed out that their employee data showed thatflexible work was desired by a wide range of workers, including high performers, and alack of requests from men and/or high performers may often be the result of a culturewhere employees are afraid that requesting flexible work will jeopardizetheir career opportunities.FEAR OF LOST CONTROL AND LACK OF TRUSTIt was clear that fear of loss of control is a major obstacle to companies embracingflexible work as a business strategy. The notion of “If I can’t see them, how do Iknow they are working?” was raised repeatedly in the discussion. There was alsorecognized discomfort with forcing managers to work differently. The senior HRparticipants remarked repeatedly upon how fear of change amongst managers was amajor obstacle to the success of flexible work initiatives, and how buy-in fromleadership along with education and support for managers are crucial factors inovercoming it.CONFIDENTIAL 4

December 2010UNEQUAL TREATMENTSome CEOs were concerned about setting precedents, particularly in companies where the majority of workers have customer-facing or factory-based roles, which are not necessarily well- suited to location-independent work. However, it was “We need to work out acknowledged that different roles (knowledge-based the complexity of jobs, for example) could be done flexibly without it treating everyone impacting roles that are less well-suited, provided that differently.” the company’s policy is clear with regard to Tim Pointer, each role and reasons for approval or denial of a Head of HR flexible work application are well-documented and Pentland Brands non-discriminatory. Another common concern across groups was that flexible workers might end up being treated differently to the rest of staff, creating two separate cultures. The consensus was that rather than tryto distinguish flexible workers as a separate breed, all workers should be educatedand supported, whether or not flexible work was relevant to their specific role, ascultural acceptance would be key to success.MANAGING ISOLATION AND LOSS OF TEAM SPIRITBoth CEOs and senior HR professionals were concerned about the potential loss of teamspirit that may arise from colleagues not working the same physical space and time. Atleast one participant had already developed an employee resource group to enableflexible workers to come together and others were considering use of work “hubs” toprovide places where teleworkers could engage with others. All of the participantsagreed that technology, ranging from telecommunications to social networking tools,was key to enabling managers and teammates to collaborate, but all agreed thatface-to-face time, in some quantity, is immensely important.REGULATORY AND LEGAL LANDSCAPEThe majority of Think Tank participants, across all six groups, were representing businessesthat operate in more than one country. Most CEOs (outside of those with headquartersin California – see box inset on following page) were not familiar with the regulatory,legislative and legal issues associated with flexible working.CONFIDENTIAL 5

December 2010 In US states where daily overtime is required (such as California or Alaska, and possibly, Nevada), an employee who works less than full-time may still be entitled to overtime pay if the employee works more than 8 hours in a given day. An employee may be entitled to daily overtime premiums if the employee works more than 10 hours in a given day at a mill or factory in certain states (such as Oregon), or works more than 12 hours in a day or more than 12 continuous hours in certain states (such as Colorado). “Mitigate or Litigate: Flexible Working and Legal Exposure,” Forthcoming, 2011The UK HR leaders were more likely to be aware of local legislation, which gives workersthe statutory right to request a flexible work arrangement if they have parental or adultdependent care responsibilities. The current UK government has pledged to extend thisright to all workers, regardless of care duties. US HR and Workspace leaders were awareof the Obama administration’s support for flexible work initiatives and were “watchingthis space” for regulatory movement.MEASURING SUCCESSAll of the participants said that their companies reward “The challenge ofresults, rather than time in the office, but fewer than flexible working isexpected could point to the actual measures used to monitor knowing how wellthe effectiveness of their workforces outside of the obvious salesand profit numbers. They did, however, acknowledge that employees are achieving theirsetting clear goals and performance metrics would bekey to cutting through the cultural barrier to flexible work that mission - it is notexists in an organization where physical presence is valued, if about the elements ofnot directly rewarded. the flexibility.”Those who were operating formal flexible work initiatives had George Weathersbyfew metrics in place to measure any improvement in return on CEOhuman capital that may be being realized as a result. Several YPO InternationalHR leaders commented that they were struggling tomeasure informal (occasional) flexible working andtherefore to track utilization accurately, and that they would likethe ability to collect these data, in order to substantiate thebusiness case for flexible work on an ongoing basis.CONFIDENTIAL 6

December 2010THE WAY AHEADWithout exception, all participants agreed that buy-in from senior leadership is crucial tothe success of a flexible work initiative. With that in hand, companies need to:Send a Consistent, Legally-Compliant Message • Create clear and well-thought-out and legally-compliant flexible work policies. • Communicate those policies, along with internal case studies that recognize successful flexible work practices, to all staff, in a place where they are sure to find it and in a way that will resonate with them.Educate to Keep the Focus on Results • Educate individuals about how to create a results- “Execution of flexible oriented business case for a flexible work proposal. work is hugely • Educate managers thoroughly about why the dependent upon company is engaging in flexible work, how to leverage manager capability.” it as an asset, and how to manage flexible workers in a way that allows them more freedom without sacrificing Alix Hughes, results, for example by setting and monitoring clear Diversity Program work deliverables. Manager MicrosoftSimplify the Process • Enroll all employees – not just those with formal flexible work arrangements – in a work style, the same way employees are enrolled in medical, pension and other programs. There is no need to create separate cultures if flexible work is just treated as “part of how we do business.” • Make the administrative process for enrollment as automated, as straight- forward, and as flexible as possible.Measure Return on Investment • By enrolling all employees and automating the process, detailed reporting on the true utilization of different types of flexible work is possible, and can be used to make decisions around physical space requirements, as well as correlated with measures of productivity, staff turnover, etc. to prove the return on investment.Leverage Technology and Redefine “Face Time” • Arm all employees with the tools they need to collaborate both on- and off-site, and provide them with opportunities and spaces to meet face-to-face.CONFIDENTIAL 7

December 2010SOFTWARE AS A FACILITATORParticipants in the Think Tanks recognized various ways for software to help in the processof moving to and facilitating the day-to-day functioning of a flexible workforce. Specificareas cited included: • Centralizing and communicating policies and information in a simple and engaging way • Offering on-demand e-learning courses and tools for managers, employees and HR alike • Automating the workflow around filing and approving flexible work arrangements, in real time, to reduce admin burden • Measuring different aspects of flexible work utilization and reporting on productivity and other measures of ROI • Helping managers to set goals for teams and individuals and monitor progress as well as who is working when and where • Allowing colleagues to collaborate across space and time using video, audio and instant messaging, both at their desks and using mobile devices • Existing “in the cloud” but Interfacing with other internal systemsCONCLUSIONSThe Think Tank sessions were virtual peer group knowledge exchanges, and as such, theyserved as a powerful mechanism for participants across companies, industries, andgeographies to collaborate on the subject of flexible work. The feedback from theexperience was overwhelmingly positive. The participants felt they gained knowledgeand insight from sharing ideas and perspectives with peers across industries andgeographies, a clear demonstration of the value of this sort of virtual collaboration.The majority of participants expected to see dramatic increases in flexible work over thenext five years (anticipating that 50-80% of their employees would be working flexibly),driven largely by the need to attract and retain superior talent. And yet they alsorecognized that their organizations have a long way to go to overcome the currentskepticism, develop manager capability at managing flexibly, and create theinfrastructure and systems for this ‘new normal’ – including how to confidently measureperformance in a virtual asynchronous environment. They recognized that the culturalchange that is required will not necessarily happen overnight.CONFIDENTIAL 8

December 2010Several participants had compelling stories and data to support the progress of theirefforts toward a fully flexible working culture that were inspiring to the others. Many(particularly CEOs) who joined the conversation with significant skepticism came awaywith modified views and remarked on intentions to put some of what they learned towork. On that basis, and on what we learned as observers, we look forward to extendingthe series in future, to enable the participants to continue their conversations and toprovide others with the same opportunity.F OR M ORE I NFORMATION about the FlexPaths-LinkedIn Virtual Think Tanks onFlexible Work, or to participate in future sessions, please contact Clare Flynn Levy onclare.flynnlevy@flexpaths.com.A BOUT F LEX P ATHS LLCFlexPaths®, a certified women-owned business founded in 2005, is a leading provider ofweb-based and consultative flexible working solutions for corporations, governments andpeople seeking employment in organizations that have a flexible working culture.http://www.flexemployer.comA BOUT L INKED I NLinkedIn is the world’s largest professional network with over 80 million members andgrowing rapidly. LinkedIn connects you to your trusted contacts and helps you exchangeknowledge, ideas, and opportunities with a broader network of professionals.http://www.linkedin.comCONFIDENTIAL 9

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FlexPaths & LinkedIn Present Think Tank Findings, Flexible Work: Perceptions & Realities

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FlexPaths & LinkedIn Present Think Tank Findings, Flexible Work: Perceptions & Realities — Document Transcript