November 3, 2012

MU0015 [Compensation Benefits] Set2 Q6

Q6. What is flexible workforce - explain
Q5. Describe flexible workforce in detail. 

Ans:


Flexible work arrangements are an important part of today’s employment marketplace. They accommodate a wide range of practices and lifestyles, including temporary work, employee leasing, self-employment, contracting, home based work and part-time work. A large majority of employers use some form of nontraditional staffing arrangement. They do so in order to meet the demands of business and workers.


Flexible work arrangements allow companies to more efficiently meet their production needs; thereby helping them to more effectively compete in an uncertain global economy. Flexible work arrangements also help to meet the diversity and changing demographics of the workforce. They allow people to be part of the workforce regardless of their family and household characteristics. Often, such arrangements allow workers to have flexibility while often receiving more compensation up front.


A significant portion of the flexible workforce prefers such arrangements so that they can attend school or meet other personal obligations. Often, employers must offer nontraditional employment arrangements to attract valuable workers. Employers use flexible workers for a variety of other legitimate reasons.  For example, a company may staff to a core level, i.e., hire the number of full-time workers the company knows it will need at all times and then supplement that employee base with flexible workers depending on production demands instead of a continuous cycle of lay-offs and new hiring.  A related reason is to obtain the expertise of a particular type of worker when needed.


The flexible workforce developed primarily out of the emergence of the “knowledge worker,” individuals with xpertise in intellectual or technical areas who are not tied to a particular place of work. In addition, the increase in women entering the workforce, and the prevalence of advanced, post-secondary educational pursuits, created further needs for employment on nontraditional terms. The relative size of the flexible workforce has remained stable in recent years, but some discrete segments, such as temporary agency employees, have grown.


Though the number of temporary agency workers has increased, it has not reached the point of becoming a significant percentage of the total workforce. In addition, temporary workers typically work on short-term assignments and remain temporary workers for less than a year. Barely one percent of such workers, aged 16 to 24 (an age cohort scrutinized by critics of flexible work), spend more than 24 months working in that capacity.  In addition, many of the temporary workers that fall within that age category have postponed their entry into the traditional workforce for educational purposes. Temporary work is likely a transitional phase in a worker’s life.


Employee Benefits and Flexible Workers


The perceived disparity between the employee benefit levels of flexible versus traditional workers is lessened when one considers that many flexible workers are really self-employed, and that many other workers have health care coverage from other sources. It is important to note also that some employers that do not offer health care coverage to flexible workers do not offer coverage to any of their employees.  Others offer coverage that is declined by the worker because he or she is otherwise covered or does not want to, or cannot, contribute to the cost. Many of the reasons for the lower level of participation in pension plans among flexible workers are the same as for participation in health plans.  The more skilled flexible workers, such as independent contractors and other self employed workers, tend to do their own retirement planning.  Other such workers may not be on the job long enough to qualify for a particular employer’s pension plan or simply may choose not to participate, in favor of receiving higher current income.


Thanks to the changing employment situation, today, the average workforce of an organisation is far different to that of a few years ago.  More and more companies are going for different kinds of employee engagements like temporaty staff, consultants, freelancers, contractors, sub contractors and so on.  Thsi brings with it its own particular sets of advantages and disadvantages for organisations.  Managing the flexible workforce of a company needs a different set of policies and strategies.


The key reasons or trends for the emergence of flexible workforce below:

i) Retention of women employees: Over 60% of women opt out of full time work within 6 – 8 years of employment, but 93% of these women want to return to work part time.  Companies that tap into this talent pool by accommodating their request for flexibility in working hours will create a competitive advantage in the labour market.

ii) Retirement of baby boomers: Companies in certain sectors will face a significant skilled labour shortage with a huge number of experienced people eligible for retirement in the next ten years.  Many of these baby boomer (people born between 1945 and 1965) employees, however would prefer working on a flexible capacity rather than going for retirement.  Many companies would prefer to retain them on flexi hour’s engagement, as they prove to be highly beneficial, especially in the absence of a proper knowledge management system.


iii) The retention of the voluntary workforce: In certain high tech sectors, many highly skilled employees no longer have to work as they would have earned and saved enough for a life time and are leaving because they are unhappy with a lock of work life balance.  Companies are ready to accommodate their need for flexibility in working hours rather than losing out on highly skilled workforce.


iv) Challenges of global teams: Today due to globalization more and more people are required to work continuously in order to communicate and collaborate with colleagues around the world.  /due to this people are experiencing a feeling of burnout and employers have no option but think beyond 9 to 5 implement flexible schedule  to accommodate these challenging logistics.


Let us now discuss some of the different types of work arrangement that accommodate a flexible work force below:

i) Job sharing: here the full time job is split between two co workers and benefits are given in proportion based on the number of hours put in by each employee

ii) Daily flexible choice: In this the log in a log out time may vary daily.


iii) Open flexible choice: In this the employees can choose the total number of hours required to complete the specific task.


iv) Compressed week choice: Here, employees have a choice to work for less than five days in a week.


v) Comp-off: In this, the employees can extend their timings on busy days and use that later for compensatory time off.


After discussing the different types of work arrangement that accommodate a flexible work force, let us now discuss the types of locations: 
Satellite options: These are remote work centres like satellite work centres which are provided by the employers. 
Telecommuting: Employees work from home for a few days in a week via telecommunications and then work out of office on the remaining days. 
Teleworking: Employees work from home on all the days of the week via telecommunications. 

This flexi-time arrangement has a lot of benefits for both the employers and the employees. The benefits for the employees are: 
Provides an opportunity for workers who are disabled. 
Working parents can meet their family obligations. 
• Saves commuting time. 
• Provides time and location flexibility. 
• Reduces job related stress and also interruptions at the workplace. 
• The benefits for the employers are: 
• Influences employees in a positive way. 
• Improves productivity. 
• Reduces absenteeism. 

Improves employee job satisfaction, job performance and work quality. 
Reduces costs related to environmental requirements, time, space, employee safety, relocation of the employees, and productivity. 
Helps in retention of voluntary workforce, women and baby boomers. 
Companies can terminate contingent workers services more easily. 

With respect to compensation and benefits paid to the flexible workforce, most companies pay an hourly wage, which is fixed on the basis of the complexity of work as well as the skill sets of the employee. No amount of paid leave, insurance and legally required benefits like gratuity and retirement benefits are paid.

With respect to compensation and benefits paid to the flexible workforce, most companies pay an hourly wage, which is fixed on the basis of the complexity of work as well as the skill sets of the employee.  No amount of paid leave, insurance and legally required benefits like gratuity and retirement benefits are paid.

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