“Too Long… I’m Gone!” – What effect are commuting times having on key employee loyalty?

Moments of amusement do occur when examining some of the detail of skills shortage.  For instance, according to the UK’s Immigration Work Permit Visa Services, the UK is experiencing a shortage of the following workers:

This article has been submitted by Andy Birks, Regional Director at Regus.

As the global business community emerges from a worldwide downturn, managers’ thoughts are turning to how they can manage their organisations back into growth.  During the last eighteen months, many firms have been through a slimming exercise, identifying where jobs can be combined or roles eliminated without impairing the business.  As a result, many commentators have focused their observations on rising unemployment as one of the key factors damaging the global economy, and pointing to any drop-off in the rate of unemployment as a sure sign of recovery.  However, most businesses are well aware of how difficult it is to find staff with exactly the right skills combination, and how important it is to retain those skilled key workers.

Across the recent economic slow period, people with the most valuable skillsets largely did not join the ranks of the unemployed, or were rapidly snapped up by other employers.  In today’s ‘knowledge economy’, economic recovery and growth will be fuelled by retaining those productive skilled employees.

This short article reviews the worldwide issue of skills shortages, then offers new research evidence on the correlation between commuting time and the likelihood of key workers leaving their jobs.  These research findings highlight how important it is for business and management to review the flexibility of the working arrangements that they offer their valued employees at a time when firms desperately need all the key skills they can get to effect commercial recovery and steal a march on their competitors.

Skills Shortages

According to recent studies[1], the top five positions employers globally are having most trouble filling remain unchanged from 2008: skilled manual trades people, sales representatives, technicians, engineers and management/executives.

On a region by region basis, the skills shortage picture is broadly consistent across the world.  In the Americas, 36% of the region’s employers are having difficulty filling positions due to the lack of suitable talent available in their markets – an increase of eight percentage points over the previous year.  Interestingly Accounting & Finance has suddenly appeared as the third most difficult to position fill, having not previously appeared in the top ten[2].

Talent shortages in Asia Pacific mirror those of the rest of the world, with 32% of the region’s employers indicating they are having difficulty filling positions.

Across 17 EMEA countries – Austria, Belgium, the Czech Republic, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Romania, South Africa, Spain, Sweden, Switzerland and the United Kingdom – 25% of the region’s employers report having difficulty filling positions due to the lack of suitable talent.

Moments of amusement do occur when examining some of the detail of skills shortage.  For instance, according to the UK’s Immigration Work Permit Visa Services, the UK is experiencing a shortage of the following workers:

Civil engineers, geologists, chemical engineers, medical practitioners, dental practitioners, biochemists and pharmacists, secondary education maths/science teachers, social workers, nurses, engineering technicians, ballet dancers, orchestral musicians, a/v equipment operators, ship and hovercraft officers, welders, electricity transmission overhead line workers, skilled chefs, care assistants, skilled sheep shearers[3].

Of course, official statistics, resulting in the rather bizarre selection listed above, can only identify specific skills-shortage categories in so far as they fall into pre-defined categories.  Businesses across the globe are very aware that each industry has a range of key skills that are critical to commercial success, but will not make up sufficient overall volumes to appear in these official lists.

Reasons for Resignation

Why, then, do people leave their jobs, and what can be done to overcome points of dissatisfaction in order to retain them?  One American business growth specialist has identified a top-10 list (in no particular order) of why people quit their jobs.  Those top ten reasons are:

- Lengthening of commute times
-Being required to do the work of two or more people

- Cutbacks on administrative help
- A freeze on raises and promotions
- Not being allowed to make decisions
- Constant reorganisation
- Unclear goals
- Favouritism
- Unfair promotions
- Competition between departments[4]

Clearly, many of these factors can be addressed in order to improve employee retention.  One of the most significant factors in improving employees’ work-life balance is to be able to offer flexibility to work remotely, either in whole or in part.  Flexible workplace solutions are now available which allow corporations to offer employees the ability to work in whole or in part from home, have a hot-desk capability in multiple locations, call on meeting rooms or working facilities as needed as well as a host of other workplace possibilities.  There is currently very keen interest in such flexible solutions, as opposed to rigid commercial property leasehold arrangements, as many companies over the last two years have found themselves facing diminishing revenues and a smaller workforce, but no ability to flex their office cost commitments.  Equally, as commercial recovery gains momentum, firms are now looking for flexible solutions that allow them to grow very rapidly, especially in emerging economies.

Some companies have already embraced the benefits of flexible workplace solutions: Cisco Systems estimates a 25% increase in work productivity among telecommuters; Google reporting that they can attract higher-quality employees by taking the work to the talent and, Deloitte estimates a saving of $40 million through the reduction in employee turnover.

These benefits are emphasised by a report which states 84 of the ‘100 Best Companies to Work For’ allow employees to telecommute or work from home at least 20% of the time, and many offer a number of other work/life balance programs such as job sharing and compressed workweeks[5]. Industry pundits also agree with one pundit stating: “Virtual office workers are 10-20% more productive than they would be in permanent offices.[6]”

Flexible Working and Employee Retention – Proving the Connection

For a business, large or small, to depart from its traditional commercial property and workplace arrangements, further proof is needed of the correlation between length of commute and increased likelihood of employee defection.  To this end, Regus commissioned research amongst more than 11,000 businesses in 13 countries across the globe, in order to obtain hard data on the subject.

The research findings provide very strong evidence of the link between length of commute and likelihood of defection.  The overall figures show that almost one in every five respondents (18.5%) across the globe has seriously considered leaving their job in the last two years because their journey to work is too long.  In most countries, this proportion is in the 15-20% range.   However, the figure soars in India where one in every four people (25.1%) reports having considered leaving their job because of commuting time, rising to a staggering one in three in South Africa (31.6%) and China (31.7%).

An even stronger correlation between commuting times and likelihood of employee defection emerges when the statistics are focused on people who take an hour or more to travel to work.  On average, the proportion of one-hour-plus commuters who have seriously considered leaving their job in the last two year rises sharply to 39%, compared to the overall average of 19%.  Interestingly, a high proportion of these people express an elevated level of workplace satisfaction outside of the commuting time issue.  Therefore we can conclude that even though they like their job and have a happy and stimulating work environment, a long commuting time may cause an employee to leave a company despite otherwise high job satisfaction.

Conclusion

In summary, this latest evidence provides proof that commuting times have a disproportionately high influence on employee loyalty – across the globe.  Otherwise-happy and stimulated employees are much more likely to defect if they have a long commute, defined in this study as over one hour.  Even journeys of more than half an hour start to significantly affect the likelihood of people considering leaving their present job.

Flexible working practices, where employees are given the option to work part of their time from home, but can still gain access to flexible workplace solutions that offer hot desking, meeting rooms, office facilities and so on, are becoming more popular.  This is not only the case with smaller entrepreneurial firms, but also large multinational corporations, and indeed public sector organisations.

In a world where skills shortages are being experienced internationally, retaining key employees is becoming more and more important, especially as companies seek to accelerate their commercial recovery after a slow economic period.  We can therefore safely conclude that flexible working practices, along with the workplace solutions to support these practices, are likely to undergo significant growth in the next few years.

[1] Manpower, Annual survey reveals talent shortages continue despite current economic environment, 28 May 2009, Manpower’s 2009 Talent Shortage Survey Manpower surveyed nearly 39,000 employers across 33 countries and territories to gauge employers’ ability to find the talent they need.

[2] Ibid

[3] UK Skills Shortage List, 15 June 2009

[4] Business Know-How, Top-ten reasons why people quit their jobs, 2008

[5] Workforce.com, Workplace flexibility – a low cost benefit with high returns, 16 March 2009

[6] Franklin Becker, director of International Workplace Studies at Cornell University

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