Go Ahead, Take a Few Months Off

Here’s how HR professionals at two nationwide tax firms operate a ‘FlexYear’ time-off option.

By Teresa Hopke Sep 1, 2010
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September coverDo you ever wish you didn’t have to choose between:

  • What you want to be—a firefighter or an accountant?
  • What you want to do with your life—live on your houseboat or have a career with a salary that pays the mortgage?
  • What your priorities are—advancing your career or spending more time with family?

Thanks to an innovative, business-minded solution we call FlexYear, many employees at McGladrey don’t have to choose. They pursue multiple career avenues, fulfill family and career obligations, and take time to live the lives they want.

McGladrey is the brand for RSM McGladrey Inc. and its partner McGladrey & Pullen LLP. The former, a subsidiary of H&R Block, provides tax and consulting services for businesses, and the latter, a partner-owned organization, provides assurance services. Both offer FlexYear.

The plan design mimics the way many teachers work and are compensated. The program allows some of McGladrey’s 7,000 employees across the nation to take a portion of the year off, while working full-time or part-time the remainder of the year and receiving a prorated paycheck and full benefits all year. This option works well for employees who have an interest in seasonal employment or being home at certain times of the year, such as during their children’s summer vacations.

At the same time, it helps mitigate the seasonal nature associated with some work in the accounting, tax and business consulting industries by allowing employees to take time off during times of the year when our firm’s collective workload might not be as heavy.

A Difficult Beginning

McGladrey employees have been taking advantage of FlexYear schedules for years. In most cases, however, the approach early on was not sustainable for them or the Bloomington, Minn.-based firm. Back then, we offered what I describe as “accommodation-based flexibility.” The problems were:

  • Employees proposed options such as FlexYear based on individual needs rather than a focus on the business, clients and co-workers.
  • Managers sometimes said they felt compelled to accommodate requests, particularly by star performers, because they might otherwise lose those employees to competing firms.
  • Managers subjectively assessed flexibility requests based on the personal reasons employees provided—the better the reason in the manager’s eyes, the more likely he or she was to approve the request.

Some conflict-avoiding managers didn’t want to say no or tell an employee that his or her flexibility plan wasn’t working, so they sometimes let unproductive arrangements exist indefinitely.

The result sometimes created dissatisfaction and misunderstanding, giving flexible work options a bad reputation in the following ways:

  • Some managers saw workplace flexibility as an impediment to the business.
  • Some employees using flexible work options experienced backlash from co-workers who did not.
  • Employees not using flexible work options sometimes said they were taken advantage of by their flexing colleagues.
  • Clients’ needs were not always considered in decision making.

A New Approach

In 2003, I worked with a committee of leaders and employees to identify positive and negative implications of the existing flexibility plan, and to determine how we could make flexible work options more effective. We knew we had to change the negative reputation these options had within our organization by starting with a fresh approach that managers could buy into.

To do this, committee members came up with a work/life strategy and identified flexibility as a component. They proposed that we hire a consultant to help design and implement the strategy. I partnered with Rupert & Co. of Washington, D.C., in rolling out that strategy and tapped the committee for oversight.

The result was the current approach, launched in 2004, after endorsement by McGladrey’s leaders and a pilot test. The design is simple and focuses on business impact. It makes sense for the company, employees and clients.

First, an interested employee who has been with the firm a minimum of three months and has a performance rating of “achieving expectations” or better initiates a request for one of the firm’s seven flexible work options by completing an eight-question business proposal that requires him or her to assess the impact of the request on the firm, its clients and his or her co-workers—and to propose solutions to issues that could arise as a result.

Second, managers evaluate proposals based on the impact on the business. Employees’ personal reasons for pursuing the flexible work option are not considered; in fact, they aren’t even disclosed as part of the proposal. Typically, employees take about two months off during the summer, but the duration and time of year may vary.

Third, if a proposal will create a neutral or positive impact, managers are encouraged to approve the request, at least on a pilot basis, to keep the employee on board. If there is a negative impact on the business, managers are encouraged to decline the request—even if that means having a difficult conversation with an employee.

Finally, once approved, flexible work options are continually monitored to ensure that they still work for the employee, firm and our clients. They can be modified or ended—by the firm or the employee—at any time, based on individual and business needs. In the last 12 months, we’ve had around 250 proposals requesting the seven flexible work options and only about 10 were declined. Each proposal must be approved annually.

By making FlexYear part of this business-based approach to flexibility, we were able to position it as a strategic tool that helps leaders manage the cyclical nature of our business while responding to the diverse needs of employees.

A FlexYear Partner

FlexYear sounds great, but do the 33 employees nationwide who take advantage of the option tend to have lower salaries or receive fewer promotions? Are they penalized on appraisals?

Michelle Hickox, a partner in our Dallas office, has been on a FlexYear schedule for eight years and has seen firsthand the positive impact on her family and the firm. Through FlexYear, Hickox has enjoyed taking June and July off each year to make invaluable memories with her two girls. This option also allows her to develop deep relationships with her clients through open conversations about her schedule. And, FlexYear provides stretch opportunities for employees on Hickox’s team who work with her clients while she is out.

FlexYear employees’ work will often be assumed by others as stretch assignments. Yet it isn’t as much about filling in for the absent employee as it is about that employee taking on a reduced workload and then shifting his or her work to other times of the year. That said, it is up to the employee, not the manager, to determine what happens with the remaining work and how it will get covered. Employees typically work with their team members to figure that out and try to provide their colleagues with stretch opportunities during their absence and eliminate low-value work throughout the year. We usually do not hire temps to fill in.

Despite taking time off each summer, Hickox’s FlexYear schedule has not adversely impacted her career. As is the case for all employees, her performance appraisals are based on whether she meets predetermined expectations. And, she receives a reduced salary aligned with her reduced work schedule and determined by her ability to meet those expectations.

Hickox’s schedule hasn’t slowed down her advancement, either. In fact, while working a FlexYear schedule, she has received promotions and progressed from the manager level to her current position as partner.

Cost vs. Benefits

Do benefits outweigh the costs? There is no denying the costs: We pay full benefits as long as employees work at least half of a full-time-equivalent schedule. FlexYear participants are eligible for all of the firm’s benefits such as life, long-term care, accidental death and dismemberment, long-term disability, dental, health and vision insurance; the employee assistance program; pre-tax accounts; legal aid; and the 401(k) match. The cost for the health and welfare benefits for the two months the employee is “off” is the same cost as for other full-time employees. The employee continues to be responsible for his or her portion of any benefits during time off. And so far, all such employees have remained eligible for leave under the Family and Medical Leave Act.

Of course, there is a chance that an employee might collect his or her prorated salary during the time they are “off” and then leave the organization. These costs are real and do impact the bottom line. They are, however, fairly insignificant compared to the advantages to the firm, which include:

  • Aligning our staffing to our business and cash-flow cycle.
  • Being an employer that offers innovative programs as part of our employment brand.
  • Retaining high-performing employees who have multiple priorities by supporting their personal and professional lives.

What’s Next?

At McGladrey, we continuously strive to promote innovative ways of working. Our senior leaders even signed a “Declaration of Flexibility” that reinforces our commitment to flexibility and encourages grass-roots innovation around flexible ways of working. The declaration pledges to create a flexible workplace that empowers all employees to find the right work/life fit, and permits employees and leaders to hold each other accountable for practicing flexibility.

We continue to educate employees at all levels, regardless of their use of, or interest in, flexibility, by embedding flexibility into talent management activities such as career development and performance management. The goal: to approach flexibility in a way that positively impacts the business while providing innovative solutions for our employees.

The author is senior director of talent management for RSM McGladrey Inc. in Bloomington, Minn.

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