Workers happy to sacrifice pay for flexibility and better hours

Analysis

Workers happy to sacrifice pay for flexibility and better hours

Are employees willing to sacrifice pay in order to obtain work scheduling arrangements that better suit them? Yes, according to a recent US study, if it means avoiding working evenings and weekends.

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Are employees willing to sacrifice pay in order to obtain work scheduling arrangements that better suit them? Yes, according to a recent US study, if it means avoiding working evenings and weekends.

However, the traditional Monday to Friday, 9 to 5 work routine is also highly valued.

Call centre employees studied


The National Bureau of Economic Research (NBER) conducted an experiment involving recruitment of call centre employees. About 7000 job applicants were offered the following work options, with pay rates varied according to the options offered:
  • traditional Monday to Friday, 9am to 5pm
  • flexible scheduling options, set at employees’ discretion
  • opportunity to work from home
  • scheduling set at employer’s discretion, with one week’s notice given

Weekend leisure time highly valued


The results found most applicants were unwilling to sacrifice pay to gain flexible scheduling options in preference to a set five-day 9-5 routine. However, they were willing to sacrifice almost 20 per cent of pay on average to avoid scheduling set at employer’s discretion, if it included evening and/or weekend work. 

The traditional set routine was the option most often preferred by applicants, for two apparent reasons:
  • They were unwilling to sacrifice pay in order to gain more flexible weekday working options
  • They placed a high value on NOT working evenings or weekends, and the set routine provided a guarantee they would not have to do so – or, if they did, they would be entitled to overtime or penalty rates
Working from home was, however, a valued option. On average, applicants were willing to sacrifice about 8 per cent of their pay to gain access to it.

In general, women were more opposed to flexible scheduling by employers, and more in favour of sacrificing pay to work from home, than men. Both genders strongly opposed flexible scheduling by the employer at short notice.

What it means for employers


If similar results were replicated in an Australian survey, it would indicate employees still place a high value on preserving their weekends for leisure and other non-work activities. That in turn may explain the relatively strong resistance in Australia to removing or reducing weekend penalty rates.

It would seem the justifications based around having a 24/7 economy and traditional weekends becoming gradually obsolete are running ahead of employees’ actual preferences. Some employees may indeed prefer to work at nights or weekends, particularly casuals and students, but it is a good idea to survey employees first to find out what their preferences (and the real reasons for them) actually are.

Working from home is attractive to many employees, presumably because they believe an average 8 per cent pay reduction would be offset by cost savings, eg in the expense and time of commuting to/from work, lower childcare costs etc.

Employers who want the ability to vary employees’ working hours at short notice may find it harder to attract good employees, and/or may have to provide higher pay to employees in order to compensate them for the inconvenience.

As with most other employment conditions, it is important to hold regular discussions with employees and understand their needs and attitudes towards working hours and schedules. Then look for solutions that suit both the employee and the needs of the business.

Further information

Valuing Alternative Work Arrangements, National Bureau of Economic Research, September 2016. Note: payment required to access full report.
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