Opportunities for flexible working are an attractive part of any employment offer and, since the pandemic, have become far more common. In fact, remote and flexible work has become the norm for many companies and roles. Most leaders see flexibility as a way of making the workplace more accommodating. But is there a hidden cost? 

Flexible work arrangements (FWA) are widely seen as an appealing part of any job offer. Unfortunately, those arrangements have tended to be career-killers. Historically, working outside the traditional, full-time, on-site employment model has taken a toll on pay, promotion probability and performance ratings. Leaves of absence have had long-lasting, negative effects on opportunities for advancement and pay. We know this is particularly impactful for women, who are more likely to use them.

It is not yet clear how the pandemic has affected flex and remote work trends or how it will impact career equity. With so many employees working remotely in whole or in part and with organizations far more experienced in managing remote employees, it’s possible that the negative effects we’ve seen historically will be overturned. Still, the strength and consistency of those historical patterns suggests employers need to be on the alert for the resurgence of unintended negative consequences.  

Our recently published, Employer’s Guide to Achieving and Sustaining Pay and Career Equity at Work outlines persistent adverse effects, historically, from key practices.

Part-Time Employment

Employees who work on a part-time basis are generally less likely to be promoted and to receive high performance ratings, all else being equal. We find strong and persistent damping effects of part-time status on FTE-equivalent pay. Turnover rates are substantially higher for these workers, as well. Since women are more likely to be in part-time employment, this effect adds to systematic, long-term disparities for women in employment, advancement and pay.

Leaves of Absence

All else being equal, employees who take leaves tend to be paid less than their colleagues, are less likely to advance within their organizations and are less likely to receive high ratings — effects that persist long after the employee returns. Here again, we find that these employees are more at risk for voluntary turnover. Since women are more likely to take a leave for childbearing or other caregiver obligations, the systematic negative effects of leaves of absence also accentuate pay and career disparities.

Remote Working

Most of the data we have collected around remote working was gathered prior to the pandemic, so it remains to be seen how new and widespread practices around working from home will affect equity in this area. However, given the significant historical negative impacts of remote work on advancement, we think this is an area that warrants close attention.

Our data shows that engagement is sometimes actually higher for remote workers and that turnover probability is lower. Traditionally, opportunities to work remotely were an accommodation to employees, so this is not surprising. However, this effect has not been strong enough to overcome the longer-term weakening of career prospects associated with remote work. The strongest and most consistent negative effects show up in promotion probability and ratings. The career challenges of remote work do seem to cut across groups, however, and we do not note a systematic disadvantage for women or people of color.  

Representative Case: Global Consumer Products Company 

Despite leadership’s strong commitment to diversity, pay equity, and career equity, flexible working factors actually impeded the ability of the company to successfully implement its diversity, equity and inclusion strategy. The company’s internal labor market analysis showed that, all else being equal, part-timers were about 50% less likely to be promoted, more than 70% less likely to receive a high performance rating, and had a 25% higher turnover probability than comparable full-time employees. 

Employers must proactively advance their underlying culture around flexible work to ensure that those who opt in to these benefits are not penalized. Part of that may involve encouraging more balanced uptake in FWA opportunities.

Those on leave were similarly affected. They were half as likely to be promoted and more than half as likely to be highly rated. Turnover was more than 80% more likely globally and more than 150% more likely in the U.S. And in the U.S. population, the promotion deficit for remote workers was more than 25%. 

The effects at this company were felt disproportionately across groups. Women and people of color were more likely to opt into flexible work arrangements, and three times more women had part-time status versus men. The proportion of part-time Black and Hispanic employees was more than two times that of white employees. Asian employees were slightly less likely to be part-time. Black and Hispanic employees were more likely to take leaves than white colleagues, and almost 3% of women took leave, on average, compared to less than 1% of men. No consistent demographic patterns were detected with respect to remote working, specifically.

These results are representative of what we commonly observe — even among progressive employers with advanced DEI strategies. According to our Let’s Get Real About Equality report, two-thirds of organizations globally report that they offer a variety of flexible work arrangements, but only 45% of organizations say that part-time employees have the same opportunities to advance as full-time employees. Only 44% say they value employees who work remotely equally. Based on what we see when analyzing hard data, these perceptions are likely overly optimistic.

The takeaway? Policies alone cannot solve for both accessibility and equity when it comes to flexible work. Let’s Get Real About Equality found that only 33% of organizations train managers to support employees through parental leave and return-to-work, and just 34% train them to support their employees’ use of flexible work options. Employers must proactively advance their underlying culture around flexible work to ensure that those who opt in to these benefits are not penalized. Part of that may involve encouraging more balanced uptake in FWA opportunities. For instance, when men are encouraged to take family leave to the same extent female colleagues are, a trend we see more often in European countries, attitudes toward family leave are normalized and the negative consequences neutralized or diminished. Establishing processes and technologies that make it easier for employees on FWA to remain fully in the loop at work and remain engaged with supervisors and colleagues even while out on leave or away from work can be an important part of the culture change required.

To guard against the resurgence of negative, unintended consequences of FWA, it helps for organizations to know and track their workforce data, including the demographic distribution of those opting for FWA and how they fare with respect to pay, promotion and retention rates compared to those who are not. Qualitative appraisals can be useful as well, for example, eliciting input from those on FWA about their experience and the challenges they have faced.

The pandemic changed norms around flexible work, and we do not yet know how the traditional biases and blocks may change. What we do know is that organizations must work to understand embedded biases and adapt organizational cultures to obliterate stereotypes about what defines a productive worker, before we can see true equity in this area. We also know that simply offering FWA options to employees is not good enough. A check-the-box approach to DEI policy can end up undermining the ability of women and people of color to succeed at work. That’s a recipe for failure.