Striking the right balance

Large, well-managed companies with good HR practices provide the best work-life balance for their employees, according to new research.

A study of more than 700 manufacturing firms in the UK, France, Germany and the US said good people management – such as fostering talent, rewarding and retaining high-performing staff and consistent training opportunities – are likely to be found in conjunction with good work-life balance practices.

Productivity myth
However, the Work-Life Balance, Management Practices and Productivity study conducted by the Centre for Economic Performance, dismissed the view advocated by the government that providing employees with a good work-life balance actually leads to higher productivity.

“The win-win view that better work-life balance will improve productivity is rejected,” the report stated. “There is no relationship between productivity and work-life balance once good management is accounted for.”

Instead, well-managed firms can either choose to introduce better work-life balance practices or not. If they do introduce them, it neither penalises firms in terms of productivity nor does it significantly reward them, the report said.

Professor John Van Reenen, one of the authors, said: “Good work-life balance seems to be something that well-run firms in competitive markets do naturally. They need to treat their employees well to keep them – if not, their competitors will hire them away.”

But he cautioned the government against introducing improved work-life balance measures without weighing up the financial burdens they would impose on employers.

Employers’ groups have complained long and hard about the government’s extension of family-friendly legislation and its effect on business. They will seize upon the report’s conclusions as adding further weight to their argument that the government does not need to force employers to act by introducing even more regulation.

The right balance
The key to work-life balance is balance for both employer and employee, said the British Chambers of Commerce. Its study of 1,200 employers last year found two-thirds opposed extending flexible working and 80% opposed increasing maternity leave to 12 months.

David Frost, BCC director-general said: “While maternity and flexible working rights are important in the workplace, these rights must be balanced against employers’ needs to manage their business effectively.”

Smarter working is the key to successful firms
Allowing employees to work smarter rather than harder is the key to successful management, the Centre for Economic Performance study found.

In well-managed firms, the hours worked by both managers and staff are not significantly higher than those in badly-run companies, it said.
The share of women in management positions relative to non-management is significantly higher in firms with better work-life balance. In other words, the glass ceiling does not seem to exist nearly as strongly in organisations that treat their employees well in general, the report said.

It also suggested that tough market competition improves management practices but without any detrimental effect on work-life balance.
Co-author Nick Bloom said: “It simply is not true that globalisation is such a disaster for employees. Employees in larger, more globalised firms seem to be much better off in terms of their working lives than those in smaller, more national firms.”

About the centre

The Centre for Economic Performance is an interdisciplinary research centre at the London School of Economics Research Laboratory. It was established by the Economic and Social Research Council in 1990 and is now one of the leading economic research groups in Europe.

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