Work-Life Balance Programs – Cost or Investment?

Work-life balance programs are fast gaining popularity in developed countries. Work-life balance programs can be defined as any benefits, policies or programs that help employees find ways to manage the demands of the workplace and life outside work. In other words, work-life balance programs are designed as a two pronged approach to achieve meaningful achievement and enjoyment in everyday life. There are many forms of work-life balance programs such as flex-time, child-care facilities at work, gyms and concierge services and paid vacations.

Work-Life Balance Programs

Many reasons are cited for the introduction of work-life balance programs at the workplace, the most common being that it increases productivity as well as employee loyalty. While these are all valid justifications, the costs of having work-life balance programs should not be ignored. Therefore, do the benefits of work-life balance programs outweigh the costs? Going further, should these programs be considered a cost or an investment to the firm?

While it may be easier to estimate the returns on investment of a project, it is difficult to financially quantify the impact of work-life balance programs. Thus, companies have to resort to a series of performance measurement tools that are indirectly related to financial return. The best performance indicators are in terms of human resource management. One of the benefits of work-life balance programs can be seen through recruitment. Successful work-life balance programs are powerful marketing tools for attracting new employees who are drawn to the company not just for good remuneration, but other perks too.

Work-life balance programs also help to create a better relationship between employer and employee that can be mutually beneficial. One of the main sources of workplace stress is unreasonable demands made on employees’ time. Thus, programs that assist employees to better manage their time lead to greater job satisfaction. This is evident in the healthcare industry where employees have to work alternative hours in a very stressful and emotionally draining environment. Work-life balance programs in the healthcare industry like wellness programs and child care facilities bring balance and perspective to the lives of employees. This leads to greater productivity, lower job turnover and absenteeism, greater esprit-de-corps and more loyalty towards the employer. In terms of operating costs, retaining employees reduces the cost of training new employees and the time it takes to train new staff to be competent. In fact, there is some evidence to support the argument that companies that offered work-life balance programs outperformed those that did not.

To evaluate if such programs are good investment, we need to examine them from three metrics, which are efficiency, effectiveness and impact. Efficiency metrics are those that measure the cost of work-life balance programs to ascertain the return on investment (ROI). Effectiveness measures are those that indicate how work-life balance programs affect the capacity and actions of employees in targeted talent pools. The third type of measure concentrates on the real impact of work-life balance programs on organizational performance by measuring the value added to an organization by a work-life balance program.

Interestingly, research has found that managers often collect data on efficiency, but not on effectiveness and impact factors. This is a major limitation because efficiency measures do not reveal the value added to such programs. The second group of metrics termed effectiveness metrics, assess the outcomes related to the intended effects on individuals of work-life balance programs, for example through employee satisfaction surveys. Again, surveys are useful but they do not gauge whether such programs have positively impacted performance. Though financial ratios such as ROI are typically used to assess core competency, it should be remembered that ROI focuses on financial indicators whereas work-life balance programs use non-financial indicators. Impact metrics measure the ability of work-life balance programs to improve the quality or availability of a particular talent pool, for example to achieve competitive advantage by lowering absenteeism and turnover.

To illustrate this cost versus investment dilemma, let us examine three types of work-life balance programs — childcare, office gymnasium and flexible work hours. Childcare facilities are provided to entice workers from dual-income households where both parents work. There are many forms of childcare facilities such as in-house child care facilities, after school programs, subsidized child care, and referral services. The main benefit of having such a facility is to help employees cope with the demands of caring for their young children and their jobs and reduce stress among employees as they are assured about the safety of their children. When employees are happy and well-adjusted, it is believed that they become more productive and can contribute more to the company. Other fringe benefits include tax reliefs and exemptions to employers, though this is only available in a few countries. On the other hand, the costs of maintaining such childcare facilities are numerous. They include the cost of setting up the facility, the cost of employing qualified staff to care for the children and other operating costs. Also, there is no empirical evidence to support the argument that such facilities promote productivity. In some cases, the employee might spend more time at the childcare facility instead of at work. In addition, it is almost impossible to quantify the ROI of a childcare facility.

Another popular form of work-life balance program is the office gym. A gym is provided because it is believed that exercise promotes good health and reduces job stress. In turn, healthy employees are more productive and there are fewer cases of absenteeism due to poor health. However, running a gym is potentially expensive. Equipment must be bought, a special room must be prepared and in some cases, physical trainers must be employed. Setting up an office gym must also be done with caution as not all employees would enjoy working out to keep fit. Some may prefer other forms of exercise like swimming, jogging or playing tennis or some may not bother to exercise at all. Hence, it would be a waste of resources to set up a gym when few employees utilize it. There must be proper rules as to when the gym can be used to avoid abuse. In addition, if the gym is open beyond office hours, the cost of operation must also be considered. Finally, the cause and effect relationship of setting up an office gym and increased productivity are largely conjectural.

The third type of work-life balance program mentioned earlier is flex-time. This is a form of work schedule that allows employees to select the hours they will work, for example a condensed work week or a shift. Flex-time is particularly attractive to those who have to juggle work with other demands like caring for aged parents or looking after young children if childcare facilities are not provided at the workplace. Flex-time is also beneficial for the company in terms of decreasing overhead costs. If employees work different schedules that do not overlap, equipment such as computers and desks can be shared. Companies that do business with firms in different time zones will also benefit as they are able to operate for longer hours and do not have to pay overtime. Nevertheless, there are some problems associated with flex-time including difficulty of communicating with employees who work outside regular office hours. There are also concerns about staff abusing flex-time. If the flex-time schedule is not structured properly, it could lead to the office being staffed sparsely during peak hours and this is unacceptable.

In conclusion, from a purely financial perspective, it would appear that work-life balance programs are more of a cost than an investment to the firm. These programs rely on qualitative measures to estimate their success whereas investments rely on quantitative indicators and attempting to reconcile both is problematic to say the least. However, it would be unfair to dismiss work-life balance programs as facile and unprofitable. Just because something cannot be measured with crude financial instruments does not mean it does not exist. The benefits of work-life balance programs on the happiness and well being of employees are well documented. When employees are happy, they become more productive and this ultimately benefits the organization. Therefore, companies should adopt work-life balance programs as long as they are not a severe financial burden.

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