International literature review on the business case for
I Executive Summary
This literature review reviews the international and New Zealand literature on the business case for adopting work-life balance policies. The business case is established by weighing up the costs and benefits of introducing work-life balance policies and determining if the net impact is positive. In New Zealand, the EEO Trust’s Work & Life Awards highlight a number of strong case studies for the business benefits of work-life balance policies.
Both the local and the international literature identify the benefits of work-life balance policies, which are:
• improved recruitment and retention rates, with associated cost savings; • reduced absenteeism and sick leave usage;
• a reduction in worker stress and improvements in employee satisfaction and loyalty;
• greater flexibility for business operating hours;
• improved productivity and
• an improved corporate image.
The costs of implementing work-life balance policies include: • direct costs, such as parental leave payments or providing equipment to telecommuters and
• indirect costs associated with temporarily filling the posts of absentees and temporary reductions in productivity arising from disruptions. • costs associated with implementing work-life balance policies Firms may have difficulties in assessing the net impact of work-life balance policies as the costs are easier to identify and measure than the benefits. Some employers use cost-benefit analysis and others decide to implement work-life balance policies because they intuitively make sense.
Even in the absence of work-life balance policies there are costs and externalities associated with unresolved conflicts between work and personal lives. These costs are borne by the firm (through reduced productivity) as well as by employees and their families and communities. In some circumstances, extended working hours have negative impacts on employees’ health or their families and communities. Work-life balance policies can reduce or mitigate the effects of work practices such as extended hours.
Which businesses are most likely to implement work-life balance policies? What is the business case for small and medium enterprises and lower-skilled workers? • The type of work which employees perform constrains the types of work-life balance policies (formal and informal) which can be offered, so industry type is one of the best predictors of work-life balance policies. The public sector, finance and insurance stand out as industries most likely to offer work-life balance policies. Wholesale and retail are the least likely to offer policies. 2
• Firm size is also an important predictor of the presence of work-life balance policies, with large firms generally having the most generous policies. • Firms employing a large number of professionals and technical workers are the most likely to offer work-life balance policies.
• Firms employing a large proportion of low-skill workers are the least likely to offer work-life balance policies.
• Firms with a large proportion of women in their workforce are more likely to provide work-life balance policies, but the proportion of women in top executive positions was a better indicator.
• In the international literature, SMEs are often defined as having fewer than 500 employees. Work-life balance policies in SMEs are generally informal and individually negotiated, making them difficult to pick up in surveys. We do, however, have EEO Trust case studies and these indicate that SMEs identify similar costs and benefits as larger firms. There needs to be a specific focus on SMEs in the consultation process as the literature does not cover very much about the business case for work/life balance for SMEs
Work-life balance policies affect business performance in a number of ways: • In a competitive labour market, employers can attract better recruits by offering work-life balance policies...
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