Statement of Donna Klein, President & CEO, Corporate Voices for Working Families

The U.S. Equal Employment Opportunity Commission

Meeting of May 23, 2007 - Achieving Work/Family Balance: Employer Best Practices for Workers with Caregiving Responsibilities

Good morning, Madam Chair, Madam Vice Chair, and Commissioners Ishimaru, and Griffin. Thank you for the opportunity to participate in this meeting today. I am Donna Klein, President, CEO and founder of Corporate Voices for Working Families. Prior to founding Corporate Voices, I spent 20 years as Vice President of Workforce Effectiveness at Marriott International, Inc., and have seen first hand how many businesses are developing business models and work supports to address the demands of the ever-changing workforce.

Corporate Voices for Working Families is a non-profit, non-partisan corporate membership organization founded to provide the unified voice for the corporate sector to policymakers on issues important to working families. As an independent 501(c) (3), Corporate Voices facilitates research and provides solutions to legislators and business on Early Childhood Education and After School Care, Family Economic Stability, Worker Flexibility, the future of the Mature Workforce, and Youth Transitions.  Collectively our 50 partner companies employ more than 4 million individuals throughout all fifty states, with annual net revenues of over $1 trillion.

A primary goal of Corporate Voices is to expand the dialogue between public and private sectors on working family issues, and identify key management strategies that positively impact employee performance and help to maintain or improve an organization’s financial outcomes/performance. Many of these strategies help companies to address employee needs by integrating work and life in the business world. Many other could be used to inform public policy relating to all of America's working families.

A large body of our work examines ways to support and ensure Family Economic Stability for lower wage workers. Lower wage employees comprise a large and fast-growing segment of the U.S. workforce. According to the National Compensation Survey, 25% of U.S. workers earn $10 per hour or less, (or $20,080 or less annually) for a 40-hour work week. Low wage jobs are among the fastest growing segment of the American labor market. Between 2002 and 2012, the Labor Department expects the economy to create more than 7.5 million new jobs. However, almost six million of these jobs will be lower wage, requiring limited education and providing minimal training. The actual job responsibilities of hourly and lower wage workers vary from industry to industry, but are most often directly related to customer service – making these employees the face of the company. Examples of lower wage workers include: call center customer service representative, bank tellers, retail sales associates, health aides, cashiers, housekeeping staff, servers, check processors, product-line workers and others who are necessary to keep a business running, but who are not always recognized as being core to the business.

Corporate Voices has compiled a series of reports on model work/life programs and policies for lower wage workers including our 2004 “Increasing the Visibility of the Invisible Workforce – Model Programs and Policies for Hourly” (together with Boston College Center for Work & Family Carroll School of Management) and our recently released “Workplace Flexibility for Lower Wage Workers,” (with WFD Consulting and funded by the Sloan Foundation).

The reports document companies from a wide range of industries that have implemented programs and policies to support the needs of lower wage workers. Many of the case studies examine the work/life polices from the employer’s perspective of improving business while being supportive of their lower-wage employees.

All of the companies report short and long term benefits to their businesses as a result. The case studies focus specifically on business benefits such as increased retention and recruitment, improved customer service, increased productivity, and decreased absenteeism that have resulted from the companies development of these new policies and programs. Each of the case studies provides practical examples that can be integrated into any workplace to strengthen the business. I have grouped the case studies together by the outcome or the goal. Each is a powerful example of employers and employees working together to improve lives and build a stronger and better company for tomorrow.

1. Increased Recruitment and Retention Rates

By putting programs in place that benefit their employees, businesses increase recruitment and retention rates. For example:

  • An employee survey at Bank of America indicated that parents who used its Child Care Plus program, which reimburses employees for the cost of each child receiving care, were twice as likely to stay with the company as parents who did not utilize the program.
  • Ninety-one percent of H-E-B Grocery Company’s workforce is comprised of full-time hourly workers holding retail, manufacturing, and transportation and warehouse positions. As part of its commitment to serve its workers, H-E-B established MedBank, a sick-leave program that provides eligible full-time hourly workers with income continuation when they need to be absent from work. Unlike typical sick leave policies, in which leave is only available if the employee is sick or injured, H-E-B has broadened the criteria for leave-eligible absence to include the illness or injury of immediate family members, defining “immediate family” to include the employee’s spouse, child, stepchild, and elderly or dependent mother, father, brother, sister, mother-in-law, and father-in-law. The MedBank program gives hourly employees the freedom to care for their sick family members without having to take time out of their own sick leave, or worry about losing money for unpaid days off. MedBank is a win-win situation for the company and the employees. The program fosters company loyalty and a friendly work atmosphere.
  • Marriott International, Inc, offers an Associate Resource Line (ARL), an employer-sponsored program that provides confidential help to manage the competing demands of work, home and life. It is a hybrid between the traditional Employee Assistance Program (EAP) and a full continuum of work life support. Assistance is offered 24 hours a day, 7 days a week to meet the unique scheduling needs of shift workers.

2. Improved Customer Service

Training programs create more competent employees who not only excel in their current positions but are better prepared for other job opportunities within the organization. These employees offer improved customer service, which results in greater customer loyalty. For example:

  • First Tennessee Bank used flexibility as a centerpiece in putting the service profit chain theory into practice. In several branches, the bank trained managers on flexibility practices and focused on creating a work environment in those branches that was supportive of flexibility and people’s personal lives. The result was that employee retention in these branches proved to be 50% higher than in other branches, and this contributed to a greater retention rate of customers at these branches. The bank demonstrated that as employee satisfaction increased, customer retention increased by 7%, which translated into $106 million profit increment in two years’ time.
  • CVS Pharmacy’s Regional Learning Centers (RLCs) are another prime example of the value of employee development programs. RLCs provide comprehensive training programs with simulated workplace experiences for each career track available to potential employees. Committed to investing in the communities it serves, CVS created RLCs with the objective of offering people currently on public assistance an opportunity to develop long-term career paths. While the individual RLCs operate differently, they all rely on strong partnerships with community social service agencies. By establishing relationships with hundreds of nonprofit agencies involved in training welfare recipients, the program has gained credibility and stability. Creating a more stable workforce among entry level positions is one of the primary benefits of this initiative, and CVS has seen many of the participants quickly move out of entry-level jobs into higher-level positions.

3. Increased Productivity

Companies implementing strong employee support programs benefit from increased productivity for two reasons – the policies create goodwill, which contributes to employees’ desire to work harder; and they help employees to better integrate their work and home life, which reduces stress and allows them to better focus on their jobs. The productivity increase is not limited to employees who benefit directly from the programs – enthusiasm about the organization often spreads from program participants to their co-workers. Employees who are happy with their jobs are also more likely to recruit other strong candidates to join the organization.

For example:

  • Eddie Bauer is one company that recognized the need to offer financial incentives to its hourly and lower-wage employees; its employees are rewarded when a store exceeds its sales goals by specified amounts. The company’s challenge was finding a way to motivate employees to take an active role in achieving the results that help the company meet its goals. By accomplishing this objective, Eddie Bauer would be acting on the company’s organizational philosophy that “every employee has a role in the success of the company.” Eddie Bauer’s Store Team Incentive Program rewards employees for their contributions to achieving store sales goals and for their contributions to the company’s overall success. Independent of each other, Eddie Bauer stores, in collaboration with regional managers, set specific sales goals. If these goals are exceeded by certain percentages, hourly employees receive additional compensation for each hour they worked during the previous month. The Store Team Incentive Program is a “win-win” program for both associates and the company. Company representatives suggest that the program maximizes sales and increases retention and employee commitment.

4. Decreased Absenteeism

Finally, businesses derive direct benefits from decreased absenteeism, due to programs and policies that help employees integrate their work and home lives. For example, programs that help workers pay for reliable child-care services or that help them with emergency loans result in employees who miss fewer workdays and can more clearly focus on job responsibilities.

For example:

  • Like so many working families in America, Providian employees with children suffered the family stress and financial burden of finding care for their children while they were at work. Providian, seeking to assist its working families in a way that was effective and easy to understand, developed a Dependent Care Flexible Spending Account with Company Match program as part of its benefits plan. Providian chose the Dependent Care Flexible Spending Account with Company Match program because it provides employees with two distinct benefits – the ability to contribute pre-tax dollars and the opportunity to have those contributions matched dollar-for-dollar by Providian, up to $2,000. The money in the account is used to reimburse eligible dependent-care expenses, and the program is offered to all benefits-eligible employees.

These companies recognize the value of focusing on their business while being supportive to their lower-wage workers. They have implemented practical programs that are prime examples of solutions that can be implemented in other workplaces. These reduce staff turnover, and increase employee commitment to the organization. In addition, these programs can boost productivity by reducing employee absences stemming from illness, child care issues, transportation difficulties and other life issues.

We know from our businesses that work/life balance – specifically workplace flexibility is a constant concern for employers. Corporate Voices has documented, the strong positive outcomes of effective flexibility programs through our research. We have been able to highlight the business case for workplace flexibility and have been influential, both in garnering the attention of business and in demonstrating the feasibility and importance of workplace flexibility as a business tool.

Moreover, our research shows that flexibility has a positive impact on all measures of employee commitment to the company. When evaluating lower income workers with access to flexibility compared to lower income workers without flexibility we found that:

  • Commitment/engagement was 50% higher for workers with access to flexibility
  • Stress and burnout was 45% lower for workers with flexibility
  • Intention to leave the organization within 2 years was 30% lower for employees with access to flexibility.

Some research shows that, for a variety of reasons, lower wage workers have less access to voluntary flexibility than higher wage workers. But when it is available to them, flexibility can have equal or even more powerful outcomes for the lower wage population such as less turnover, reduced absenteeism and higher employee retention. Allowing a low-wage employee the flexibility to deal with a family situation may keep them from having to quit or losing their job in order to address the sometimes unpredictable nature of family emergencies.

Examples of successful flexibility programs offered to low-wage employees exist, but often remain a secret in most corners of the corporate world. In recent years, companies have implemented flexibility on an informal “as-needed” basis as a way to accommodate business demands and overcome labor shortages. Some areas of success include:

  • Alternative work schedules – compressed work week, flexible start and end times, and part-time schedule;
  • Scheduling systems that enable bidding for desired shifts and shift swapping;
  • Personnel policies that enable episodic flexibility and short leaves – personal time in hour increments, vacation time in days rather than weeks, sick leave banks and access to unpaid personal leave.

Most workplace research to date has been primarily on management and professional workers, and relatively little attention has gone to how and whether voluntary flexibility can work for lower wage employees and their employers. Little is known about what kinds of flexibility are successful in lower wage jobs, resulting in a common assumption among employers that flexibility is less feasible, or effective, in lower wage jobs. To answer these questions Corporate Voices is currently developing an original research project to explore lower-wage workplace flexibility in greater depth.

We hope our current research will help corporate managers look beyond the traditional way of thinking about flexibility and begin to experiment with the many options that 21st century workplaces offer to both low-wage and higher wage employees. In a time of globalization, out-sourcing and strong competitive pressures, there are many challenges to be addressed in order to secure family economic stability for all Americans.

In conclusion, many corporate leaders recognize that there are educational, managerial and cultural challenges to overcome for this view to be widely accepted, but as companies realize the financial benefits of focusing on the needs of lower-wage workers, more and more companies are making the effort and reaping the long term rewards of work/life policies and programs.

Corporate Voices is happy to provide our business resources to support any and all education initiatives the EEOC launches in its effort to help educate employers on the benefits of developing supportive work/life policies for all workers.

This page was last modified on May 23, 2007.