Big returns for companies willing to give family strategies a chance

You're a solid manager and, word has it, a decent guy to work for. You treat your people well. But you've also got product to move--and since last year's restructuring, the proposals and requests have come at you like a wicked tsunami. Your staff seems a little frayed at the edges--no surprise, really, since they're in at 7:30 a.m. for the daily briefing and don't leave until past six. You're still trying to make just one of your kid's soccer games. And you can't remember the last long talk you had with your wife (though you do swap E-mail).

``Work and family''? Yeah, right. You've heard about some program the company offers. Child care, flexible hours, that sort of thing. A few employees actually use it, but they're mainly women with young kids--not people who want a career. Not your boss. And not your staff. Frankly, you think it's a load of hooey.

CLEAR GAINS. You might want to talk to the folks at First Tennessee National Corp. Three years ago, they started taking family issues seriously, treating them as strategic business questions. The bank got rid of a lot of work rules and let employees figure out which schedules worked best--``because they know what needs to be done'' both on and off the job, says Becky Tipton, a department supervisor. Then it carted in a kitchen-sink-load of programs to ease family distractions, marketed them relentlessly, and sent Tipton and 1,000 other managers through 3 1/2 days of training.

In short order, clear gains in productivity and customer service emerged. As employees got control over their workplace, ``managers had to change the way they did business,'' says CEO Ralph Horn. Ultimately, though, supervisors rated by their subordinates as supportive of work-family balance retained employees twice as long as the bank average and kept 7% more retail customers. Higher retention rates, First Tennessee says, contributed to a 55% profit gain over two years, to $106 million.

Disbelievers, skeptics, working stiffs, take note: Work-family strategies haven't just hit the corporate mainstream--they've become a competitive advantage. The exclusive province of working mothers a decade ago, such benefits now extend to elder-care assistance, flexible scheduling, job-sharing, adoption benefits, on-site summer camp, employee help lines, even--no joke--pet-care and lawn-service referrals. The titles ``work/life coordinator'' and ``director of diversity'' have entered the bureaucratic lexicon; the ranks of consultants in the field have mushroomed. At the political conventions in August, family-friendliness was all the rage.

It is a phenomenon, in other words, that executives deny at their own risk, now that the two-income family is a fact of life. So BUSINESS WEEK, together with the Center on Work & Family at Boston University, has embarked on a new initiative to rate companies on their family-friendly strategies. The nearly year-long study's goal: to identify employers' best practices by asking both companies and employees to describe their work-family balancing acts. How do employers keep productivity growing while addressing family concerns? Can employees have a life and still get ahead?

The results add up to a compelling agenda for corporate managers. Yet they also reflect a yawning divide between family-friendliness in theory and in practice. While 48% of the 8,000 employees in BUSINESS WEEK's survey said they could ``have a good family life and still get ahead'' in their company, 60% reported that management didn't, or only ``somewhat'' did, take people into account when making decisions. More telling, more than two-fifths said that work had a negative impact on their home lives. ``I may have flexibility to accommodate family needs...but I'm home working until midnight to get my job done,'' wrote one employee. Indeed, says Bradley K. Googins, director of the Center on Work & Family, ``while many companies offer benefits and programs, the underlying cultural issues still aren't very well addressed.''

Ten companies with impressive strategies and results did emerge from BUSINESS WEEK's study (table, page 76). Some of the leaders were hardly surprises: DuPont, Hewlett-Packard, and Motorola, among others, have led innovation in the work-family arena for a decade or longer. Others aren't as well-known. Eddie Bauer Inc., for one, combines a strong people-oriented culture with a host of leading-edge benefits. And Marriott International Inc. heads a small group of employers seeking solutions for the problems presented by a predominantly low-wage workforce.

The biggest surprise, though, was the company that won the highest overall grades: First Tennessee, a midsize regional bank that only recently has won attention for its progressive work-family response. First Tennessee offers luxurious benefits such as on-site child care or vouchers, job-sharing, and fitness centers. But it also demonstrates an intelligent strategic view of the problem. Work and family, it argues, are not discrete phenomena. They necessarily touch one another, often profoundly. The solution, then, is to build consideration of family issues into job design, work processes, and organizational structures--just as one would consider marketing concerns, say, or engineering input.

In practice, that means that Constance E. Wimbley and her seven co-workers in the bank's Alcoa (Tenn.) account reconcilement department determine work-family balance for themselves. Freed from attendance guidelines, the clerks adjust their schedules to match the work--and their lives. ``We're all grown adults,'' Wimbley says. ``It makes me feel good about working here.'' When Wimbley works overtime, her team members let her 4-year-old daughter, Chelsie, wait in the office while they finish. Another clerical group opted to work fewer hours in the middle of each month to balance the overtime they put in when month-end account statements went in the mail. Turnaround time on statements was cut in half.

First Tennessee's premise--and that of other leaders in the BUSINESS WEEK ranking--is that family concerns affect business results. Yet that thinking, while simple, escapes many companies. Typically, executives view work-family initiatives as inexpensive, politically correct gestures, easy accommodations to workers who otherwise have been slammed by stagnant wages, benefit cuts, and layoffs. Managers fail to buy in, and workers fear torpedoing their careers by appearing less than completely committed to their jobs.

Employees acknowledge their companies' wealth of family-oriented programs but say they often don't do the job. Half of the respondents, and even more of high-paid managers and professionals, said they felt ``a lot'' of stress and pressure at work. Men were more likely than women to say their employer expected long hours no matter how it affected personal life. Production and clerical workers, meanwhile, gave generally lower ratings, reflecting an undercurrent of tension distinctly at odds with the friendly cultures most participating companies say they promote. ``Most benefits are offered to managers, technical and office staff,'' wrote one worker. ``Shift employees have NO options.''

The study rated work-family policies and benefits at 37 publicly traded companies from the BUSINESS WEEK 1000, ranging in size from 1,243 to 218,000 U.S. employees. An initial survey, designed by the Center on Work & Family with Philip H. Mirvis, adjunct professor of organizational behavior at the University of Michigan, graded employers on their self-described breadth of programs, flexible work arrangements, and organizational infrastructure. A second questionnaire, delivered to 500 randomly selected employees at each company, asked workers to assess the results. (Some of the questions, and employees' responses, are found on these pages.)

The project provoked considerable curiosity and angst. Several large employers well-known for enlightened work-family strategies--notably, IBM, Corning, and Johnson & Johnson--declined to participate, as did The McGraw-Hill Companies, BUSINESS WEEK's parent. Most commonly, companies said they were wary, understandably, of exposing employees' views to the world's scrutiny. Indeed, GTE Corp. and AT&T, both known for rigorous consideration of work-family balance, were knocked off the list of leaders by relatively weak employee responses--a function, at least in part, of the seismic restructuring that has shaken the telecommunications industry and destroyed workers' sense of job security. In contrast, MBNA America Bank won the highest employee rating despite the limited group receiving its benefits. Employees cited a culture that, while formal and demanding, addressed the needs of a workforce whose average age is 28.

Other employers cited a conflict between BUSINESS WEEK's project and their own internal surveys, or said they simply had no time. ``We're in the business of making hamburgers,'' said a McDonald's Corp. executive. ``We don't do surveys.'' And some questioned the survey's methodology, especially the lack of complete assurance that everyone would play by the same rules. (In fact, one company was disqualified when 145 of the 216 surveys its employees returned were found to contain nearly identical--and optimal--answers.)

Ultimately, companies expressed discomfort in publicly exploring a phenomenon still in its adolescence--and one still built on ``a little more than faith and a little less than pure science,'' as MBNA Vice-Chairman Lance L. Weaver says. As recently as 1984, after all, ``there was little or no general awareness'' of work and family issues, recalls Faith A. Wohl, who led many of DuPont's early initiatives and now oversees day-care and telecommuting efforts for the U.S. General Services Administration. Around that time, DuPont, AT&T, IBM, and a few other large employers began grappling with the need for quality day care presented by an influx of women into the workforce.

Employers had traveled this road before, funding on-site day-care centers, for example, when women took over American factories during World War II. This time, though, the need didn't dissipate as it had when the boys came home--and the agenda quickly broadened. Employers discovered workers such as Kevin Murphy, a 48-year-old distribution planner in DuPont's floor products division in Wilmington, Del. Four years ago, Murphy's 86-year-old aunt, Catherine Boyle, had a stroke that left her unable to care for herself. Murphy was the only relative left to help her.

``It was something totally new,'' Murphy recalls. It took two months to place Boyle in a nursing home, which he found through a DuPont-contracted referral agency. He worked half-days through that time. After that, Murphy arranged with his supervisor to work a flexible shift that typically starts at 6:30 a.m. That allows him to visit his aunt as she rises, put in a full day, then return to the nursing home to feed her dinner and put her to bed.

DuPont's return on such flexibility: Commitment. ``I feel like I owe them something back,'' Murphy says. Evidence is mounting that such loyalty has a tangible effect on profitability. At Fel-Pro Inc., a private automotive gasket manufacturer in Skokie, Ill., University of Chicago Associate Professor Susan J. Lambert found that workers who took advantage of family-friendly programs were more likely to participate in team problem-solving, and nearly twice as likely to suggest product or process improvements.

HITTING HOME. Reductions in absenteeism and turnover are even more manifest. Aetna Life & Casualty Co. halved the rate of resignations among new mothers by extending its unpaid parental leave to six months, saving it $1 million a year in hiring and training expenses. The Families & Work Institute found that a raft of family programs introduced en masse at Johnson & Johnson in 1992 reduced the number of days absent among all workers. In a broader 1993 study, the institute determined that workers with access to flexible time and leave were more likely to remain at their employers.

Such numbers are swaying some top executives. ``The impact we're having on morale and our ability to attract and retain the people we want is clearly going to give us an economic payback,'' says Eli Lilly CEO Randall L. Tobias. Personal experience is moving other leaders to act. Hewlett-Packard Co.'s embrace of family-friendliness firmed after Lewis E. Platt became CEO in 1992. Platt's first wife had died of cancer 11 years earlier, leaving him responsible for the care of two young daughters. For J. Randall MacDonald, GTE's senior vice-president for human resources, the question hit home, literally, when his wife had to care for an elderly relative. Trying to rush his daughter off to school, he was informed it was a holiday; MacDonald ended up taking her along to a business meeting in Boston.

Awareness and acceptance of family issues at the top is a starting point, and 54% of survey respondents indicated their top brass do, in fact, demonstrate support for family balance. But the question remains: How can you to turn that glowing CEO speech into something more than lip service? ``This is a jugular issue being treated in a marginal way,'' says Fran Rogers, CEO of Work/Family Directions, the field's biggest consultancy. Most companies, experts say, have limited their efforts to child-care and elder-care referral services. At a cost of $2 to $3 per employee per year, they're a cheap fix. Instituting flextime, likewise, is literally as easy as inserting a paragraph in the employee handbook, and by 1995, 73% of large companies had done so, according to the benefits consultant Hewitt Associates.

Such programs don't work, though, unless managers let them. Lisa Latno, rated an ``outstanding'' performer by superiors, nonetheless was ready to quit her job in Unum Corp.'s policy-adjustment department seven years ago after a supervisor turned down her request to work 10 fewer hours a week. She was commuting three hours a day, and raising a 2-year-old son. ``I did it for one year, and found it unbearable,'' she says. Finally, another manager, Diane Rogers, invited Latno to take a 30-hour-a-week job in her department. Even Rogers was wary: ``I might not have bought in that quickly if it was someone I didn't know as well.''

VISION THING. Commitment from managers and employees alike comes from a culture where the embrace of family balance is pervasive and consistent. At Motorola, which placed second in BUSINESS WEEK's survey, a work-life vision statement is reinforced by regular training for supervisors and seminars for the rank and file, and by 50 professionals responsible for programs worldwide. It is translated into a set of benefits offered to workers across the company that reflects the company's values and business goals: ``Special Delivery'' gives expectant parents a 24-hour nurse hotline, and a pager for dad in the last trimester; long-term care insurance provides security for employees' extended families.

And at Eddie Bauer, as annual sales growth of 20% threatens to bureaucratize the retailer's traditionally informal environment, ``work-life programs allow us to keep it personal,'' says President Richard Fersch. So the headquarters cafe stays open late to prepare take-out meals for harried employees to take home, and a paid ``balance day'' off a year is meant to ease workers' juggling.

Companies that truly get it go a step further, integrating family support into the business itself. At Hewlett-Packard, CEO Platt demands that every business unit identify work-family issues and propose an action plan as part of its annual business review. So when HP's printer group, facing higher consumer demand, had to increase the number of shifts its manufacturing employees worked, it also investigated alternatives for round-the-clock child care. Financial managers recently won approval of a plan to get work done more efficiently by rescheduling activities that cause peak-period bottlenecks, avoiding staffing gaps, and providing technology to allow work from home and other sites. The goal is to encourage more effective work, with less employee burn-out.

A striking study of Xerox, Corning, and Tandem Computer to be released in early October by the Ford Foundation underscores HP's approach. A team of researchers found that successful solutions involved rethinking work processes, rather than finding ways to make people's lives fit the work. ``The usual way of dealing with families, individual negotiations between manager and employee, was incomplete,'' Massachusetts Institute of Technology Professor Lotte Bailyn says. ``We had to look at how work was structured, at the culture around work, the norms, from the point of view of people's families.''

Just as at First Tennessee, managers at Xerox Corp.'s Dallas customer-administration center handed over responsibility for scheduling shifts to workers themselves and saw an overnight drop in absenteeism--and then, higher productivity. A product-development team in Webster, N.Y., banned early-morning and late-night meetings, which had pushed into family time, and eliminated reports to give engineers more time to think. Result: happier engineers, and the first on-time launch of a new product in the business' history.

Slowly, employers are beginning to grasp the importance of examples such as Xerox, Hewlett-Packard, and First Tennessee. They had better. Poll after poll indicates that U.S. workers feel a loss of control over their lives. ``Companies are seeing they have all these programs, but people are still really stressed out,'' says Ellen Galinsky, the Families & Work Institute's director. Certainly, employees bear some responsibility for determining their own family balance. But they need help. Companies that recognize the need and adapt work to peoples' lives will win workers' loyalty--and, with that, a competitive edge.

By Keith H. Hammonds in New York, with bureau reports


Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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