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Workers Place More Value in Training, Flexibility Than Pay, Surveys Show


In this era of low unemployment and scarce workers, getting your employees out of the office is key to keeping them around, according to two new surveys.

Providing work arrangements and benefits that help employees balance lives on and off the job improves the thorny problem of retention, one study found, and boosts employee loyalty, the other study discovered. The surveys were released separately at a recent American Management Assn. conference in Anaheim.

In fact, investing in employee skills and "giving them a life" through flexible work arrangements and sabbaticals are more effective tools for holding onto employees than financial incentives, according to a survey of nearly 400 senior human resource executives by the American Management Assn.

Retention is considered a "very serious" issue for 46% of the respondents and "serious" by 28%, with 64% saying their retention worries were greater than a year ago and 65% expecting the situation to get worse. What's more, 60% thought skilled workers had become "scarce." Turnover is especially high among employees younger than 30, according to 51% of respondents, and 37% said turnover was high among information technology specialists.

Companies found that the most effective retention tools were technical training and employability training, although these ranked eighth and 10th in usage. Flexible work arrangements, tuition reimbursement and sabbaticals ranked third through fifth in effectiveness, the executives said.


Financial incentives such as stock grants and pay for performance ranked eighth and 12th in effectiveness.

"Investing in employees' futures is more important than immediate compensation," said Eric Rolfe Greenberg, the AMA's director of management studies. "Through training, companies are giving employees something they give right back, whereas a 5% wage increase is giving them something that they give to the Gap."

Deborah Holmes, director of the office of retention at Ernst & Young, said her company's research has found that corporations with benefits that reflect employee needs, such as flex time and other flexible work arrangements, gain a competitive advantage in retention.

"They know that it takes more than money to keep employees," said Holmes, whose employer sponsored the study. "If companies help employees balance their lives between job and family without penalizing their career development, people are less likely to leave for a few more dollars."

Similarly, Aon Consulting's survey of 1,800 employees found that management's recognition of the importance of personal and family life is the top "driver" of employee loyalty.

Aon, a Chicago-based consulting firm, has been measuring worker commitment for three years and found a resurgence this year after a slight decline in 1998. The company's "Workforce Commitment Index" began at 100 in 1997, slipped to 97.8 in 1998 and bounced back to 100.3 this year.

"These results are great news for American business, and frankly somewhat surprising," said David Stum, Aon senior vice president and director of the study.

"There is no question we are in a seller's market for labor," Stum said. "Yet employees remain basically loyal to their employers. And the most sought-after employees--highly educated, high-income professionals--are more committed to their employers this year than last year."


In investigating the business practices that influence work force commitment, Aon found that employees who are allowed to spend a moderate amount of work time each week on personal matters--making personal phone calls, for example--have a higher level of commitment than those who spend no work time on personal business.

"Most employers consider family issues to be softer and less important than other employee benefits, but our research clearly shows just the opposite," Stum said. "Companies that help their employees juggle the demands of work and family will be the big winners in the competition for good employees."

The survey uncovered evidence that longer workweeks are putting increasing pressure and stress on employees.

More than half the employees in the study reported spending more than 40 hours per week at work, and 15% said they worked more than 50 hours each week. More than 50% said they felt "burned out" by stress, and 30% reported high stress at home.

About 52% said they thought their employer does a good job recognizing how important their personal lives are. Some 25% were dissatisfied.

Employees consider pay and benefits important when they accept a job, but they aren't a factor in how long the employees stay, Stum said.

"Compensation and benefits are still reason one and two why I take the job," he said. "But as soon as I take the job, they're entitlements. You owe me that."

Has your company developed an interesting way to help employees balance work life and family life? Write to Balancing Act, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or send e-mail to

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