1. SHRM Survey Findings: 2014 Workplace Flexibility—Strategic Use of Flexible Work Arrangements October 15, 2014

2. 2 Introduction and definition Introduction The 2014 Workplace Flexibility Survey was administered by the Society for Human Resource Management (SHRM) to identify the prevalence and types of flexible work arrangements (FWAs) organizations offer. The survey also examined employee use of these programs, metrics/analytics on FWAs, success factors, the impact of these programs on both employees and employers, and challenges associated with FWAs. The following topics are included in the two-part series titled “2014 Workplace Flexibility”:  Part 1: Overview of Flexible Work Arrangements  Part 2: Strategic Use of Flexible Work Arrangements Definition Flexible work arrangements, also known as workplace flexibility, or Workflex, are a dynamic partnership between employers and employees that defines how, when and where work gets done in ways that work for everyone involved (including families, clients and other stakeholders). 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014

3. Establishing Methods to Measure the Impact of FWAs Many organizations have not established any methods to measure the impact of FWAs.  Recruitment and Retention: Among the responding organizations that offered at least one type of FWA, two-thirds or more had not established any methods to measure the effect of FWAs on turnover, hiring costs and employee intent to stay and had no plans to do so in the future (66%-76%). One-fifth or less (13%-21%) had established methods to measure the impact of FWAs on these organizational outcomes.  Employee Experience: About three-fifths to two-thirds of organizations had not established any methods to measure the effect of FWAs on performance appraisals, employee attitudes, employee engagement, and employee health and wellness (56%-67%). One-fifth to one-third (21%-31%) of organizations had established methods to measure the effect on these outcomes.  Organizational Success: Two-thirds to four-fifths of responding organizations had not established any methods to measure the effect of FWAs on business continuity, health care costs, overall profits or revenue, organizational brand identify, employee diversity and inclusion, and real estate costs (69%-83%). One-quarter (24%) of organizations established methods to measure the effect on business continuity and less than one-fifth (11%-18%) established these methods for the other organizational success outcomes. 3 Key findings 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014 Note: Results are based on responding organizations that offered at least one type of FWA.

4. Methods to Measure the Effect of FWAs on Organizational Outcomes The vast majority (92%) of responding organizations that offered at least one type of FWA had not established a method to measure its return on investment (ROI).  More than four-fifths (83%) had not established a method to measure the effect of FWAs on organizational and employee performance (other than ROI). Usefulness of Methods/Processes to Help Organizations Implement a Measurement Plan More than one-half (55%-60%) of responding organizations that offered at least one type of FWA indicated an industry standard on what data to collect, industry benchmarks to evaluate levels of success and an industry standard on how to analyze the data would be useful/very useful in helping the organization implement a process to measure the impact of FWAs.  About one-half (46%-48%) indicated HR analytics software designed to analyze this type of data, and metrics and analytics training for staff would be useful/very useful; 41% reported HR analytics software designed to store the data would be useful/very useful. Importance of Various Factors to the Success of FWAs Two-thirds or more (68%-83%) of responding organizations that offered at least one type of FWA indicated eight out of 16 factors were “very important” in contributing to the success of FWAs. These factors included support/buy-in from top management, commitment from employees to make it work and a supportive organizational culture, among others.  About one-third indicated two factors were somewhat unimportant or not at all important to the success of FWAs: employees from all levels using FWAs and the policy/practice/program being gradually implemented (e.g., piloted with a small group) (31% and 35%, respectively). 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 20144 Key findings (continued) Note: Results are based on responding organizations that offered at least one type of FWA.

5. Impact of FWAs The majority of organizations indicated that FWAs have had a positive impact on certain factors.  Recruitment and Retention: The majority (52%-75%) of responding organizations that offered at least one type of FWA indicated FWA options had a positive impact on retaining employees, attracting employees and turnover; about one-third (36%) indicated the same for the impact on hiring costs.  Employee Experience: The majority (52%-84%) indicated FWA options had a positive impact on the quality of employees’ personal/family lives, employee morale/job satisfaction/ engagement, employee job autonomy and employee health and wellness; about one-third indicated the same for the impact on performance appraisals (36%) and employee career attainment/progression (32%).  Organizational Success: The majority (52%-72%) of responding organizations that offered at least one type of FWA indicated FWA options had a positive impact on employee commitment to the organization, overall company culture and the company’s public image of being an employer of choice; about one-third indicated the same for the impact on ROI (35%) and supporting corporate social responsibility practices (30%). 5 Key findings (continued) 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014 Note: Results are based on responding organizations that offered at least one type of FWA.

6. Individuals/Groups Involved in FWAs Design: About one-half (52%-54%) of responding organizations that offered at least one type of FWA indicated top management and those in an HR function/role (including CHRO) were involved in the design of FWAs at their organization “to a large extent;” just 13% indicated the same for line managers/supervisors. Implementation: About one-half (52%) indicated those in an HR function/role (including CHRO) were involved in the implementation of FWAs at their organization “to a large extent;” about one-third (31%- 36%) indicated the same for top management and line managers/supervisors. Evaluation/Measurement: More than one-third (38%) indicated those in an HR function/role (including CHRO) were involved in the evaluation/measurement of FWAs at their organization “to a large extent;” about one-quarter (27%) indicated the same for top management and just 17% for line managers/supervisors. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 20146 Key findings (continued) Note: Results are based on responding organizations that offered at least one type of FWA.

7. Many organizations that offered at least one type of FWA had not established methods to measure the effect of FWAs. This may be because it is difficult to link measurements to other initiatives, or it may indicate lack of experience in working with FWA metrics. Experts in both FWAs and HR metrics often advise organizations to choose a few key metrics of particular interest to their business leaders and focus on these metrics first; they can then build on these metrics and add additional measurements over time. See www.shrm.org, www.whenworkworks.org and www.hrcosting.com for resources for measuring the impact of FWAs.www.shrm.org www.whenworkworks.orgwww.hrcosting.com Not understanding the impact of FWA initiatives makes it more difficult to maximize their success. An important first step is to establish the main goal(s) of any FWA initiative. Once goals are articulated, it is much simpler to identify the metrics that can best demonstrate a program’s success. Common examples of factors to measure are employee absence, turnover, productivity, attitudes/morale, and health and wellness. As more organizations develop their FWA metrics, similarities in approaches could lead to informal industry standards. Meanwhile, more formal initiatives such as those spearheaded by SHRM, the American National Standards Institute (ANSI) and the International Organization of Standardization (ISO), could lead to the establishment of professional HR standards on FWA metrics. Because HR professionals report that many factors play a role in the success of FWA initiatives, the complexity of implementing these initiatives and ensuring their success cannot be underestimated. HR professionals and organizational leaders must therefore be thoughtful about their FWA strategies and consider multiple contributing factors when executing their strategies. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 20147 What do these findings mean for the HR profession?

8. The HR professionals in this research made a strong case for FWAs because of the positive impact on recruitment and retention, employee discipline, productivity, morale, the quality of employees’ work and their personal lives, health, and organizational success overall. These reported positive effects, along with relatively low reported negative effects, suggest that adopting these initiatives could benefit many organizations. Among the responding organizations that indicated they offered at least one type of FWA, top management and HR were generally involved in the design of FWAs at their organizations, but more organizations may benefit from getting line managers more closely involved in designing their FWA strategies. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 20148 What do these findings mean for the HR profession? (continued)

9. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 20149 Methods to Measure the Effect of FWAs

10. Established method(s) to measure the effect of FWAs on recruitment and retention 10 Note: n = 246-250. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014

11. Established method(s) to measure the effect of FWAs on employee discipline 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201411 Note: n = 241-249. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

12. Established method(s) to measure the effect of FWAs on employee excellence 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201412 Note: n = 233-249. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

13. Established method(s) to measure the effect of FWAs on employee experience 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201413 Note: n = 233-245. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

14. Established method(s) to measure the effect of FWAs on organizational success 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201414 organization is able to continue delivery of products/services) Note: n = 210-223. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

15. Established method(s) to measure the ROI of FWAs and their effect on organizational and employee performance 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201415 Has your organization established a method to measure the return on investment (ROI) of the FWA program? n = 189 Has your organization established some other method(s) to measure the effect of FWAs on organizational and employee performance? n = 187 Note: Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis.

16. How useful would the following items be to help your organization implement a measurement plan? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201416 Note: n = 195-200. Percentages are of those organizations that indicated they offered at least one type of FWA. Percentages may not total 100% due to rounding.

17. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201417 Impact of FWAs

18. How important is each of the following factors to the success of FWAs at your organization? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201418 Very importa nt Somewhat importan t Somewhat unimporta nt/ Not at all important Support/buy-in from top management (e.g., executive level, c-suite) 83%15%3% Commitment from employees to make it work (e.g., following the rules of policy) 77%19%4% Support/buy-in from employees’ line managers/supervisors 77%18%6% Suitability of the job for flexible work (e.g., receptionist) 76%19%5% Supportive organizational culture75%22%4% Business needs allow for FWAs72%22%6% Employee understanding of how policy/practice/program works 69%25%6% Success with managing employees with FWA options (e.g., schedules and work) 68%27%5% Note: n = 149-155. Percentages are of those organizations that indicated they offered at least one type of FWA. Percentages may not total 100% due to rounding.

19. Very importa nt Somewhat importan t Somewhat unimporta nt/ Not at all important Employee interest in/knowledge of policy/practice/program 60%32%8% Organizational consistency in policy/practice/program implementation (e.g., not left solely to discretion of line manager/supervisor) 56%38%6% Policy/practice/program is well established53%29%18% Organizational consensus on policy/practice/program design 47%39%14% Alignment of other workplace policies to support FWAs (e.g., streamlined approval processes for changes) 41%43%16% Encouragement by organization to participate in FWAs 39% 22% Employees from all levels (i.e., executive through individual contributors) use the FWAs program 31%38%31% Policy/practice/program was gradually implemented (e.g., piloted with a small group) 28%38%35% How important is each of the following factors to the success of FWAs at your organization? (continued) 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201419 Note: n = 149-155. Percentages are of those organizations that indicated they offered at least one type of FWA. Percentages may not total 100% due to rounding.

20. What type of impact, negative or positive, have FWA options had on recruitment and retention? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201420 Note: n = 149-185. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding. 2% 4%

21. What type of impact, negative or positive, have FWA options had on employee discipline? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201421 Note: n = 141-163. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

22. What type of impact, negative or positive, have FWA options had on employee excellence? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201422 Note: n = 149-176. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

23. What type of impact, negative or positive, have FWA options had on employee experience? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201423 Note: n = 149-176. Percentages are of those organizations who indicated they offered at least one type of FWA. Respondents who indicated "Don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

24. What type of impact, negative or positive, have FWA options had on organizational success? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201424 Note: n = 117-171. Percentages are of those organizations that indicated they offered at least one type of FWA. Respondents who responded “don't know” were excluded from this analysis. Percentages may not total 100% due to rounding.

25. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201425 Design, Implementation and Evaluation/Measurement of FWAs

26. To what extent are/were the following individuals/groups involved in the design of FWAs at your organization? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201426 Note: n = 206-209. Percentages are of those organizations that indicated they offered at least one type of FWA. Percentages may not total 100% due to rounding.

27. To what extent are/were the following individuals/groups involved in the implementation of FWAs at your organization? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201427 Note: n = 205-209. Percentages are of those organizations that indicated they offered at least one type of FWA. Percentages may not total 100% due to rounding.

28. To what extent are/were the following individuals/groups involved in the evaluation/measurement of FWAs at your organization? 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201428 Note: n = 198-206. Percentages are of those organizations that indicated they offered at least one type of FWA. Percentages may not total 100% due to rounding.

29. 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201429 Demographics

30. Demographics: Organization industry 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201430 Note: n = 373. Percentages do not total 100% due to multiple response options. Percentage Manufacturing22% Professional, scientific and technical services18% Health care and social assistance13% Finance and insurance12% Government agencies7% Educational services6% Transportation and warehousing5% Utilities5% Construction4% Accommodation and food services3% Administrative and support, and waste management and remediation services3%

31. Demographics: Organization industry (continued) 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201431 Note: n = 373. Percentages do not total 100% due to multiple response options. Percentage Mining, quarrying, and oil and gas extraction3% Retail trade3% Agriculture, forestry, fishing and hunting2% Arts, entertainment and recreation2% Information2% Real estate and rental and leasing2% Religious, grant-making, civic, professional and similar organizations2% Wholesale trade2% Repair and maintenance1% Personal and laundry services<1% Other industry12%

32. Demographics: Organization sector 32 n = 366 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014

33. Demographics: Organization staff size 33 n = 360 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014

34. n = 367 Demographics: Other 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201434 U.S.-based operations only 77% Multinational operations 23% Single-unit organization: An organization in which the location and the organization are one and the same. 35% Multi-unit organization: An organization that has more than one location. 65% Multi-unit headquarters determines HR policies and practices 50% Each work location determines HR policies and practices 7% A combination of both the work location and the multi-unit headquarters determines HR policies and practices 43% Is your organization a single-unit organization or a multi-unit organization? For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both? Does your organization have U.S.-based operations (business units) only, or does it operate multinationally? n = 370 n = 245 Corporate (companywide) 67% Business unit/division15% Facility/location18% n = 245 What is the HR department/function for which you responded throughout this survey?

35. 35 Response rate = 12% 525 HR professionals from a randomly selected sample of SHRM’s membership participated in this survey Margin of error +/- 4% Survey fielded April-June 2014 Survey Methodology SHRM Survey Findings: 2014 Workplace Flexibility—Strategic Use of Flexible Work Arrangements 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014

36. For more survey/poll findings, visit shrm.org/surveysshrm.org/surveys For more information about SHRM’s Customized Research Services, visit shrm.org/customizedresearchshrm.org/customizedresearch Follow us on Twitter @SHRM_Research@SHRM_Research 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 201436 About SHRM Research Project lead: Karen Wessels, researcher, SHRM Research Project contributors: Evren Esen, director, Survey Programs, SHRM Research Yan Dong, Survey Research Center, SHRM Research Copy editor: Katya Scanlan, SHRM Knowledge Center

37. Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org.shrm.org 37 About SHRM 2014 Workplace Flexibility Survey—Strategic Use of Flexible Work Arrangements ©SHRM 2014