The current global skills and labor shortage is perceived by most leaders as posing the greatest disruption to businesses and organizations in 2022. While it’s clear at this point that the need to offer flexible work arrangements is essential to competing for talent in 2022, employers are especially under pressure to find solutions to the challenge of retaining frontline workers.
New research conducted by the Institute of Corporate Productivity (i4cp) in partnership with Fortune, found organizations reporting that they experienced the highest rate of voluntary turnover among frontline workers in 2021.
Among the approximately 1,200 business and HR leaders representing 77 countries surveyed, nearly half (49%) of those from larger organizations, which the study focused on (those employing >1,000 people) reported their organizations are emphasizing flexibility among the top three elements of their employee value proposition (EVP) in 2022. i4cp defines EVP as the current and evolving set of relevant benefits (monetary and non) and opportunities provided to employees in return for the skills, capabilities, and expertise they bring to the organization. But how to extend flexibility to frontline workers remains a complex challenge.
Frontline workers—employees who must physically show up to their jobs—comprise multiple groups, including 20% of healthcare workers and 60% of essential workers who have been necessary to keep vital infrastructure functioning during the pandemic. While some are highly skilled and well paid, the average frontline worker makes $21.85 in the U.S., far less than any other group (Blau et al., 2020). Providing these workers with flexibility has flummoxed most HR leaders whose organizations have high numbers of employees working on-site.
Many employers have increased wages, or added sign-on bonuses in response to the hyper-competitive labor market; our study found that 83% of organizations recently added or enhanced compensation strategies to compete for talent. But the study also found that those companies that emphasized compensation among the top three elements of their EVP were more likely to have experienced higher rates of attrition over the past year compared to those that did not emphasize compensation.
While companies may be able to attract frontline workers by outbidding competitors, flexible work structures offer a sustainable strategy to recruit and retain frontline employees. Companies that are approaching flexibility creatively will be at a significant advantage when it comes to competing for these workers.
Most organizations offering some sort of flexible work model give certain employees more say in deciding where work happens and a smaller group provides flexibility of when work is performed. The study found that while 36% of organizations offer employees considerable choice as to where they work, only 12% provide the same regarding when they work. This distinction is important. Data analysis found that providing flexible scheduling on its own was significantly correlated to greater retention, meaning organizations that give employees more discretion over when they work had lower voluntary turnover.
But analysis of the data found that flexibility in work location on its own had no relationship to retention. When i4cp looked at organizations providing employees with more choice overall, including location and scheduling, the practice was significantly correlated to retention and market performance, meaning more flexible cultures tend to experience lower attrition and better financial indicators.
Employers struggling to retain on-site frontline workers may understandably puzzle over what to do with this information to the point of indecision; when it comes to on-site employees, one in four organizations is doing nothing to provide greater flexibility. i4cp’s recent study, Flexibility or Flight: Hybrid Strategies to Attract and Retain Talent, asked organizations about this and found a negative relationship between those entities that made no effort to provide flexibility to their onsite/frontline employees and organizational culture and adaptability. This means organizations that did nothing to enhance flexibility for these workers tend to suffer from unhealthy organizational cultures and struggle to adapt to change.
i4cp identifies next practices as those that analysis proves to have a strong positive correlation to bottom-line business impact but are not yet widely in practice. A next practice identified in Flexibility or Flight is the implementation of a staggered shift. Offering staggered hours within a fixed schedule to employees who work on-site is not a widely adopted practice and may not be feasible in some environments. But the study found that high-performance organizations were two times more likely to do so compared to low-performance organizations.
There are various approaches to staggering shifts creatively—the important factor here (and likely the biggest hurdle depending on the organization’s culture) is openness to rethinking longstanding norms and structures for frontline workers. Consider pilots such as rotating teams between two and three-day weekends for example, or implementing four-day/10-hour shift work weeks. These practices may deliver on material benefits to include allowing organizations to continue operating with fewer individuals in the same confined space to support physical distancing.
In addition, the study on workplace flexibility found that organizations that offer staggered shifts and/or the ability to work extra hours on some days and take the same number of hours off on other days both had significant, positive correlations to healthy organizational cultures.
Localize decision making
Providing employees with choices regarding their schedules is another way to provide frontline workers with more flexibility. Organizations can do this through localized decision-making that starts with a conversation between employees and their managers.
For example, at Dutch Bros, baristas (known as “Broistas”) and managers work together to design individual schedules that support the employee’s needs—there’s no formal scheduling policy. If an employee's life situation changes, they’re encouraged to collaborate with their manager to establish a schedule that fits their preferred days and hours. This flexibility is part of the company’s culture.
Another example, Elkay Manufacturing enlists managers to confer with their team members to determine what sorts of flexibility can be arranged to accommodate both individual and company needs. Managers help to design flexible options for manufacturing workers and others who must be onsite daily, which often manifests as schedule flexibility.
“Perhaps a manufacturing or other on-site employee needs to step away to pick up a child from school and then come back to work or move start and end times to accommodate special needs. Employees can collaborate with their managers to arrange that kind of flexibility,” said Tonie Lyubelsky, former senior director of total rewards at Elkay.
There’s an app for that
Another way to increase flexibility is to empower employees to create their own schedules.
With the majority of its more than 350,000 employees working in stores, Target is using technology as a key frontline retention tool. They implemented an app to allow employees to view their schedules, indicate availability preferences, and request to cover and pick up shifts. Target also created an electronic method to pay workers faster.
Scheduling apps have the capacity to serve as virtual marketplaces where employees can find the hours they want to work and may even be able to select among nearby store locations or sites. This enables flexibility in terms of both when and where they work and supports the level of variability that an individual employee may need.
Find out what flexibility means to your frontline
In i4cp’s studies on flexible and hybrid work policies, we found that successful flexible work policies began with listening to employees, using surveys, pulse surveys, focus groups, or scrapping social sentiment data from online platforms. In fact, a next practice from prior i4cp research involved the consideration of employee input to a very high extent in the determination of work structure. Those representing organizations that take this approach reported higher market performance, healthier cultures, and better organizational agility than those that don’t involve employees.
At the team level, one-on-one conversations between the employee and manager about how and when the employee wants to work are a critical initial step toward defining flexibility for the worker. Employees need to feel supported in these conversations and trust their managers to make every effort to understand and accommodate their individual circumstances.
Organizations may find that providing more flexibility for some workers means considering new or inventive approaches to elements of EVP such as adding or expanding child and other caregiving stipends or subsidies, shorter work weeks, adjustable schedules, or perhaps modified development experiences, and other opportunities for advancement.
More flexibility may also mean predictable scheduling. A study described in the Harvard Business Review involving Gap retail stores found that more stable schedules increased sales and labor productivity—$2.9 million over the course of the 35-week study—due to better service from sales associates. Giving more employees a stable core schedule that was consistent from week-to-week and deploying a mobile app to empower employees to switch schedules without manager approval were some of the contributing interventions (Williams et al., 2018).
Predictable scheduling may seem at odds with greater flexibility, but it’s not. It frees up mental bandwidth that frontline workers may spend coordinating irregular working hours with the rest of their lives, including children, spouses, public transit, or education.
Another strategy some companies have implemented is to provide frontline workers with more paid time off. Twenty-three percent of those surveyed in The Talent Imperative study reported that as a means to aid in employee work/life balance, their organizations recently added or enhanced paid time off beyond what was offered pre-pandemic.
In 2021, for example, Tyson Foods invested $500 million in wage increases and thank you bonuses for frontline workers; this year, it began to offer paid sick leave (Tyson, 2021).
As important as flexible work structures are, it’s equally valuable to remember that flexibility is a means to an end—more autonomy, which carries with it the possibility of a multitude of positive results ranging from improved employee experience, to lowered attrition, and enhanced employer brand, etc. Workers requesting more flexibility are asking for choice and more control to balance their work and life priorities, and trust from their employer to do their best work. That’s bigger than working from home or providing a scheduling app and indicates that flexibility is a key element of the greater organizational culture in which it’s exercised.
The full report, The Talent Imperative, covering what leading organizations are doing to attract, retain, and develop top talent, is available to i4cp members.
Katheryn Brekken, Ph.D., is a Sr. Research Analyst at i4cp