Benefits Bulletin

Work/life value can be measured

By Helen Lippman, Contributing Editor

There's growing recognition that work/life programs are not just soft add-ons to a solid benefits package. "They may be the most important investment employers can make in their employees," says Richard Federico, vice president and leader of Segal Company's work/life practice.

But the majority of employers doubt that assertion, and there's a dearth of evidence to back it up. Less than half the employers responding to a 2000 William M. Mercer survey believe work/life initiatives are critical for meeting business goals, for instance. And not even 1 percent have calculated the return on investment. A Segal employer survey conducted a year earlier found, too, that less than 5 percent had attempted to link work/life programs to improved productivity, profitability or customer satisfaction.

"Intuitively, we know these programs have value," Federico says of the ever-growing array of benefits aimed at helping employees balance their lives, update their skills, get in shape and receive the recognition and rewards they deserve. But to convince upper management to continue funding existing work/life programs or to add new ones in the midst of an economic squeeze, "you need to have the numbers in your back pocket."

Neither he nor Anne Reustle, a Mercer principal specializing in work/life issues, expects the downturn to put a damper on work/life initiatives, though. Employers may be able to leverage them, Federico suggests, possibly letting go of one or more expensive benefits but maintaining fairly high job satisfaction levels with lower-cost perks like an occasional day off, more flexible scheduling or concierge service.

"Employers conducting layoffs often continue searching for key employee segments," Reustle adds. These firms have a vital interest in maintaining benefits valued by job candidates and workers alike. "But the downturn does increase the pressure to demonstrate that resources are allocated appropriately—that your work/life programs are carefully targeted," she says.

It's time for quantification. Federico helped draft a new Segal Executive Letter detailing the need for and the means of measuring ROI and overall value. In attempting to follow recommended steps, keep this in mind: Gauging the results of work/life initiatives is not a straightforward process and will not yield completely accurate results. In fact, the Segal report describes the process as a blend of art and science. What you can count on is that the picture you end up with will be a lot clearer than the one you started with.

Gather the facts

Accurate analysis of existing work/ life initiatives—and ideas for new ones—requires data collection in a number of areas. Employee demographics is a good place to start.

Analyze the workforce in a variety of ways: by sex, marital status, number of dependents, salary level, tenure, education and age group. Then identify which segments are using which programs.

"It can be particularly revealing to cluster employee data by generations" and even by subgroups, Federico points out. Older baby boomers likely use—or wish for—benefits focused on retirement planning, for instance. Those in the so-called sandwich generation, who struggle to simultaneously care for kids and elderly parents, may be far more interested in dependent care flexible spending accounts, resources and referrals.

Gathering absenteeism and turnover rates, recruitment costs and amount of downtime due to stress or personal business will help you pinpoint workplace problems that need to be addressed. Your HR department should have tallies of unscheduled days off, for instance, and cost estimates can be made by calculating average salaries, temp costs, recruitment fees and the like. Ask employee assistance program (EAP) counselors for stress-related data, captured when they ask troubled employees about the reasons for their difficulties. Be sensitive, how-ever, to not let the information gathering be a new source of stress.

Prioritize your findings and dig deeper to determine whether any problem you've uncovered is local or company-wide and whether a particular segment of the workforce is disproportionately represented, Federico advises.

Survey your employees

Unless the bulk of your business is in manufacturing, telephone service or a professional field that tracks work in billable hours, productivity loss may be the most elusive measurement of all.

While researchers search for formulas employers can use to gauge the extent of presenteeism—being on the job but not fully productive—employee self-reports continue to provide the most meaningful findings you're likely to get. Conduct a survey, Segal recommends.

List all existing work/life initiatives. Ask employees to estimate how much time they spend each day on nonwork issues, indicate which programs they use and gauge the amount of time they save during work hours as a result.

"It's also important to determine the value of these programs to non-users and future users," Federico cautions. "We recently did a child care assessment survey for an employer, for instance, and discovered that many older employees are more likely to recommend friends or family members with children as job candidates because they see this as a huge benefit."

Conduct a targeted analysis

If your firm offers an array of work/life initiatives, simple before-and-after comparisons won't identify the source of any savings realized. Assessing the value of a particular benefit or a specific group of programs calls for an analysis of very specific data.

In some cases, the process is simple: "The effectiveness of some programs can be measured with great precision by tracking employees or groups of employees that use them," says Federico. The report uses a set of initiatives aimed at new mothers—family benefits are among the most rapidly growing work/life initiatives—as an example.

A firm can begin allowing women to telecommute, job share and work part time for a specified period after childbirth in an attempt to prevent their departure. The firm can calculate and compare retention rates for this population to determine how well the strategy works. Similarly, a company that adds back-up child care can use the cost of the coverage, number of absences averted and average daily earnings of the employees using the service to calculate the ROI.

Focusing on a critical issue, rather than on a specific program, is another way to do a concentrated analysis. Segal recommends these steps: Determine the scope of the problem in terms of costs. Pinpoint the causes. Introduce one or more initiatives aimed at solving the problem. Then track and quantify any savings that result.

In evaluating any work/life initiative or set of programs, as in launching them, it's crucial to keep corporate goals in mind. Say your firm added on-site stress reduction and yoga classes, for example, based on the belief that more relaxed employees would provide better customer service. Measurements would likely focus on numbers of complaints, length of time required to get problems resolved and, possibly, overall sales figures.

Studying use patterns in the population a benefit was intended for can result in ideas to make it more effective. If you find that an EAP program geared to low-wage single parents is underused by those on the night shift, for instance, change or add to the hours the EAP hotline is staffed, or find another way to make it more accessible.

The idea is to measure, take action, then measure again.

 

Helen Lippman. Work/life value can be measured. Business and Health 2001;6:43.