Employers Will Pay More to Avoid Flextime

Workers love flexible schedules. Employers, it seems, do not share their warm feelings.

Employers said they’d be willing to pay substantially more – 20 percent to 60 percent more – to a worker who is willing to accept only a limited amount of scheduling flexibility or a rigid schedule, according to the preliminary findings of a new RAND study.

This research is fairly unusual, because most of the studies of working arrangements have looked at employees’ preferences. And they show a clear preference for setting their own schedules or avoiding last-minute scheduling, an unpopular practice many retailers have adopted. In this study, David Powell and Jeffrey Wenger at RAND conducted an experiment to look at the flip side of the coin: what employers want.

Flexibility takes many forms, in terms of hours per week, the amount of paid time off, remote work, and flexible starting and quitting times. Employers generally don’t like to offer flexible schedules, because it can be difficult to find people to come in really early or stay late, especially if they have children. It’s also costly to hire and train staff to accommodate mismatched schedules.

The researchers used an online survey to reach out to managers responsible for hiring at 700 employers. The managers were asked to select from between two different jobs – A and B – with varying amounts of flexibility. Each manager received five of these vignettes.

In one vignette, Job A closely matched the pay and attributes of a position the firm had recently filled that allowed the worker to choose, say, a schedule “within limits set by the firm.” Job B was similar, but the researchers set a different hourly wage, and the job offered no flexibility. In each case, managers were told the worker being interviewed was willing to accept either job. The manager just needed to decide which option is best for the company.

Asking them to choose between two options, based on pay and the amount of flexibility, was what the researchers needed to estimate how much the managers, on average, valued flexible versus inflexible schedules.

As job flexibility declined, pay increased.

The managers said they would pay 62 percent more, on average, to set an inflexible schedule. “Flexibility within limits” was worth 33 percent higher wages, and allowing the worker to pick between two fixed schedules was worth 19 percent more. In a similar vein using different vignettes, the hiring managers were willing to pay more to avoid telecommuting employees.

The experiment produced evidence that “firms really value fixed schedules,” the researchers said. So the tradeoff for workers who prefer flexible schedules is substantially lower pay.

To read this study, authored by David Powell and Jeffrey Wenger, see “Bridging Employment for Older Workers and the Role of Flexible Scheduling Arrangements.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.