Positive impact of work-life balance policies in companies

At the beginning of November, the Cologne Institute for Economic Research (IW Köln) reported the findings of its study on best practices of work-life balance policies in collective and works agreements. A survey of these agreements reveals that many programmes have been implemented in various fields, such as flexible working-time arrangements and teleworking, the care of family members, parental leave and family assistance.

On 10 November, the Cologne Institute for Economic Research (Institut der deutschen Wirtschaft Köln, IW Köln) reported the main findings of its study on best practices of work-life balance policies in collective and works agreements. The survey was conducted on behalf of the Federal Ministry of Family Affairs (Bundesministerium für Familie, Senioren, Frauen und Jugend, BMFSJ). This survey of agreements between the social partners at the company and industry level reveals that the conditions for reconciling career issues with family life have improved over the years. Programmes have been implemented in various fields, such as flexible working-time arrangements and teleworking, the care of family members, parental leave and family assistance.

According to an earlier survey on work-life balance policies implemented in companies (conducted by the IW Köln in 2003), 29.3% of firms relied upon collective agreements for their work-life balance policies. A further 12.4% of the responding enterprises stipulated such measures in works agreements. Moreover, 13.5% of firms laid down the principles governing work-life balance policies in firm-specific codes of conduct. The IW Köln’s compilation of best practices distinguishes four fields in which collective and workplace agreements govern work-life balance policies:

• flexible working-time arrangements and teleworking;

• care of family members;

• parental leave;

• family assistance.

Different approaches to improving work-life balance

According to an employee survey that was conducted in the metalworking and electrical industry in 2003, two thirds of the respondents thought that flexible working-time arrangements were the most important support for balancing work and family affairs effectively .

Amongst those who already work with flexible working-time arrangements, the ratio of those who regarded this kind of family-friendly policy to be the most important one was even higher, at three quarters. Since such policies offer more autonomy with regard to working-time and leisure-time arrangements, they can make coping with private responsibilities less stressful for individuals. Flexible working-time arrangements based on the number of years that employees have worked for a company are seen as being particularly effective in helping workers to reconcile family affairs with careers, as they can enable employees to take a sabbatical, for example. Working-time arrangements have, in general, become very common in collective agreements, since they offer a win-win situation to both employers and employees, and, thus, can help to promote productivity gains, on the one hand, and to encourage better work-life balances, on the other. Examples at the company level of the explicit application of flexible working-time arrangements that aim to promote a better work-life balance are those at Deutsche Telekom, and the sickness insurance agency for technicians (Techniker Krankenkasse). In addition, references to flexible working-time arrangements as well as to work-life balance issues are quite often found in works agreements. In several industries, the work-life balance is supposed to be improved by collective agreements that cover part-time employment. Such a situation exists, for example, in banking, printing as well as in the hotel and catering sectors. In this respect, it is possible to convert full-time jobs to part-time jobs for a period of up to four years. Furthermore, works agreements on part-time work complement collective settlements effectively. In a division of the insurance company Allianz, for example, 16% of all employees work on a part-time basis in compliance with the works agreement. Furthermore, collective agreements at company-level as well as works agreements that govern teleworking are also assumed to reconcile family affairs with work issues effectively. Such settlements provide stipulations on a number of issues, such as, the organisation of work, the employee’s status, the equipment used at home and the job characteristics. According to the IW Köln survey, 8% of firms in Germany have, so far, established teleworking.

Concerning home care for family members and, in particular, children, collective agreements on paid leave exist in several industries. The framework agreement in the chemical industry, for example, stipulates that an employee can take up to two days’ leave if a family member suffers from a severe disease and if a doctor confirms the severity of the sickness. Such leave is possible without sacrificing either pay or holiday entitlement. Collective agreements also exist at company level, such as in Volkswagen. This settlement allows for one day’s leave. The maximum period of paid leave amounts to five days. This applies, for example, to companies belonging to the district of North Wurttemberg/North Baden in the metalworking and electrical industry. Moreover, unpaid leave can be taken in several other industries. Whereas the period is limited to 25 days in the retail sector in Bavaria, it can be extended to a maximum period of 36 months for employees at IBM according to a firm-specific collective agreement. In addition, several works agreements refer to unpaid leave, too, such as the works agreement at Deutsche Bank. In general, when employees are absent due to the sickness of their child, they are entitled by law to receive payments from their health insurance agencies. The payment amounts to 70% of the gross wage and is limited to 90% of the net wage. Some collective agreements do, however, provide for payments to bring the replacement pay up to 100% of the net wage.

Normally, the period of parental leave is fixed by law to a maximum of three years. Collective agreements in the retail sector in districts such as North Rhine-Westphalia and North Wurttemberg/North Baden extend this period to five years. This extension can be applied in establishments with more than 100 employees if the applicant has been working for the company for at least four years. In compliance with collective agreements, such as those in the retail trade, banking and in some districts in the metalworking and electrical industry, as well as with works agreement in various firms, the participation of employees on parental leave in continuous vocational training is promoted in order to facilitate their reintegration in the workplace after the parental leave comes to an end. In this respect, almost 6% of German companies offer training programmes for employees on parental leave. According to a questionnaire by the Institute for Economic and Social Research within the Hans Böckler Foundation (Wirtschafts- und Sozialwissenschaftliches Institut in der Hans Böckler Stiftung, WSI) on behalf of the BMFSJ, 17% of the respondents reported that they received an offer by their firm to keep their vocational skills up to date. Moreover, collective and works agreements sometimes prescribe firms’ preferences for employees on parental leave when choosing a person to participate.

Works agreements often set out the assistance that firms can provide to employees in finding appropriate child-care facilities. Such agreements have been made, for example, at Allianz and Roche Diagnostics. In addition, the establishment of a kindergarten affiliated to the firm is often included in the works agreement. According to the Federal Statistical Office (Statistisches Bundesamt, destatis), 278 firm-specific kindergartens were operating in 2002. This number is, however, likely to underestimate the true figure of such facilities as many firm-specific child-care initiatives are operated by external child-care providers or parents’ initiatives and are not classified in official statistics as firm-owned kindergartens. According to the IW survey from 2003, external child-care provided and/or subsidised by the firm is almost as widespread as self-operated child-care facilities are. For example, the EADS Deutschland aspires to provide internal or external care facilities for employees’ children aged from 6 months to 12 years at several locations.

Views of the social partners on work-life balance policies

The IW survey contains statements of social partners made in interviews. Robert Reichling, head of the wage and collective bargaining department at the Confederation of German Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA), declared that employers’ support for work-life balance policies has proved to be vital in recruiting and retaining highly-skilled women within companies. In addition, he stated that collective agreements could only set out the broad parameters of work-life balance policies which had, then, to be specified at the firm level. According to Ina Müller-Mack, human resource manager at Deutsche Bank, workplace agreements can signal the firm’s commitment to work-life balance, but should be handled flexibly in practice.

Wolfgang Schroeder, head of the European collective bargaining section of the German Metalworkers’ Union (Industriegewerkschaft Metall, IG Metall), claimed that additional collectively agreed programmes were necessary to reconcile family and work. These programmes could be embedded within 'a bargaining policy that extended beyond wages and working time to qualitative aspects of employment'. According to Erich Klemm, chair of the works council at DaimlerChrysler, works agreements on work-life balance policies should facilitate the reconciliation of career ambitions with raising children for both men and women.

Commentary

Given declining birth rates and the ageing workforce, the reconciliation of family life with career path is gaining importance not only for the economy as a whole, but also for every individual company. Work-life balance policies can enhance productivity and increase the quality of work. Moreover, companies are becoming more and more aware that such policies can facilitate both the recruitment of highly qualified workers, especially women, and the retention of employees who would otherwise leave the firm in order to deal with family matters. Collective and works agreements can provide the parameters for work-life balance policies, but these should then be specified individually between employer and employee. (Oliver Stettes, Cologne Institute for Economic Research, IW Köln)