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Who Wouldn't Want to Work Here?

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After reading Patrick Kiger’s article in Workforce Management, I can’t help but spread the word about Best Buy's amazing new Results-Only Work Environment.  ROWE, as it’s called, is a radical experiment whose aim is to redefine the very nature of work itself.  In ROWE, most of the rules associated with working in the business world – mainly keeping set hours and coming into the office each morning – are thrown out the window.  Employees can come and go as they please, as long as they get their work done.

 

According to Kiger, since Best Buy began switching to ROWE on a division-by-division basis in 2002, 2,400 employees, or 60 percent of the 4,000 people at its headquarters campus, have converted to the new way of working.  Employees in divisions that convert to ROWE report in surveys that they have better relationships with family and friends, feel more loyalty to the company and feel more focused and energized about their work.

 

But does the company make money?  Apparently so.  The Best Buy per-employee cost of turnover is $102,000, and ROWE teams have 3.2 percent less voluntary turnover than non-ROWE teams. So once Best Buy's 4,000-person headquarters is completely converted to ROWE, the company stands to save about $13 million a year in replacement costs. Also, when workers switch to ROWE, their productivity jumps by 35 percent.

 

Most organizations I know define a flexible working environment as handing an employee a cell phone and other mobile gadgets and telling them that they can work from home, but only if they’re sick.  But I wonder, is this the way of the future?  Best Buy sure has metrics that say it is, and I for one am fascinated.  Anyone out there working for a company doing something similar?

Published Wednesday, October 18, 2006 7:00 AM by AlexandraLevit
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Erich said:

Who wouldn't love to work in such an environment?  But I do have to question the numbers.  First, there's something wrong with a company that has an average employee turnover cost of $102,000.  That seems ridiculously high.  The $13MM figure is an extrapolation from the $102k figure, so that seems high as well.

There was an article in Entrepreneur magazine just last month about another company that has the same philosophy for employee schedules.  They had a higher turnover because they were removing non-productive employees, which is contrary to the above article.  Of course, the interview/hiring process was very thorough to ensure the best candidates possible, that will not abuse the system.
October 19, 2006 3:44 PM
 

AlexandraLevit said:

Hi Erich, I too was wondering what failsafes were in place to ensure that people don't abuse the system.  I don't know much about turnover costs, but I agree, over $100K does sound like a lot.  
October 19, 2006 6:30 PM
 

TrackBack said:

Since Best Buy adopted the Results Only Work Environment, turnover is down and productivity is up.
October 20, 2006 3:55 PM
 

Gary said:

I think if you have the right people it would work well. I know I would prefer to work that way. It only takes one person to screw it up. I'm curious about the failsafes as well. It is just like the employee empowerment theory. It works on certain people and not on others.

I would think of it as a reward for quality work. If somebody was a performer I would give them more freedom. Doing it the other way around seems a little like putting the cart before the horse.
October 25, 2006 1:54 AM
 

AlexandraLevit said:

Hi Gary, great idea and thanks for the comment.  I also think that this type of program would be awesome as an incentive for stellar work.  After all, companies are always complaining that they're too strapped for cash to give decent raises, but something like this might be a viable alternative.  I do agree with you that a company has to have a tremendous amount of trust in its employees in order to pull it off.
October 25, 2006 7:16 PM
 

Mary Paulsen said:

I have worked flex time for over 22 years. The only drawback I ever ran into were managers that were paranoid...if they can't see the employee the employee must not be working. Here is the bottom line, does the work get done. It does not matter if the employee works 8-5 or flextime or from home, does the work get done. If not get rid of the employee, don't blame the work hours or conditions. If more employers would move to flex times they would incur less time off for sick days. people would not want or need as many vacation days because they can run their errands, doctor appointsments or kids functions and still get their work done and turn over does go done. That should be the first clue to employers, the employees are happier and the whole idea does not cost the employer a dime.
December 12, 2006 11:36 AM
 

AlexandraLevit said:

Hi Mary, thanks so much for your comment!  You make excellent points, especially about the sick day factor.  Employers in general should be trusting of their employees, particularly if the work is getting done well, and with no complaints.
December 12, 2006 4:04 PM

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About AlexandraLevit

Alexandra Levit has been there and done that. She's the author of They Don't Teach Corporate in College: A Twenty-Something's Guide to the Business World (Career Press, 2004). Alex has spent all of her post-college career (eight memorable years) in Corporate America and recently founded the career consultancy, Inspiration @Work. She speaks frequently at universities and corporations and has appeared in more than 500 media outlets including ABC News, Associated Press, National Public Radio, the New York Times, USA Today, and the Wall Street Journal.

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Water Cooler Wisdom is a career advice blog by Alexandra Levit, author of They Don't Teach Corporate in College: A Twenty-Something's Guide to the Business World . Water Cooler Wisdom is sponsored exclusively by Getthejob.com.
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