Study confirms positive impact of work-life balance policies

In June 2005, the German Minister for Family Affairs, Senior Citizens, Women and Youth, Renate Schmidt, presented a study on work-life balance as a motor for economic growth and social stability. The Prognos AG found that family-friendly policies not only increased the success of enterprises, as a result of productivity gains, but also fostered economic growth because they helped to raise labour force participation rates.

On 17 June 2005, Renate Schmidt, the German Minister for Family Affairs, Senior Citizens, Women and Youth (Bundesministerium für Familie, Senioren, Frauen und Jugend, BMFSFJ), together with Juergen R. Thumann, the President of the Federation of the German Industry (Bundesverband der Deutschen Industrie, BDI), and Hans Barth, Chair of the Advisory Board of Prognos AG, the commissioned research institute, presented the results of a study on the impact of work-life balance policies on economic growth and social stability.

The Prognos AG ran a simulation that was based on the assumption that, in Germany, one third of public and private employers would implement programmes to improve their employees’ work-life balance before 2015. The predicted effects for Germany by 2020 would be:

• around 220,000 additional jobs

• around one million additional births

• a productivity gain of 2.3% per hour

• an additional gross domestic product between 2006 and 2020 of EUR 248 billion

The simulation assumed that some of the hidden labour force as well as the unemployed could be encouraged to participate in the labour market if the balance between work and private life were improved. In addition, work-life balance policies would enable more couples to have children. Mothers would be able to return earlier from maternal leave and, thus, prevent their skills from depreciating. In general, re-integration into employment is much more probable after the parenthood phase. Moreover, the acceptance of a greater workload after returning to work would increase. In this respect, work-life balance policies lead to more productive and motivated staff; they can also result in employees identifying more with their enterprises. Staff turnover in family-friendly companies is significantly lower than it is in other companies; these higher retention rates have led to savings in recruitment costs.

Results of the simulation are derived from a survey of eight public and private employers: Bertelsmann AG, Commerzbank AG, DaimlerChrysler AG, Deutsche Telekom AG, Fraport AG, Vattenfall Europe AG, Voith AG and the Federal Insurance Institution for Salaried Employees (Bundesversicherungsanstalt für Angestellte, BfA). These employers have been putting into practice work-life balance concepts for a long time; they have, thereby, revealed a high level of support for such policies. According to the experience of the surveyed companies, people work best when they can strike a better balance between work and the rest of their lives. In this respect, a greater work-life balance brings benefits, such as improved commitment from employees, to business. These benefits compensate firms for the costs of work-life policies, such as increased managerial workloads.

The study recommends that companies should embed their family-friendly policies in the management concept of corporate social responsibility (CSR). Since CSR has become an essential criterion when evaluating an enterprise, companies can realise reputation gains as a prime benefit. These ease both the recruitment of high potentials and the development of stable relations with their customers.

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