According to conventional wisdom, workers, especially young workers, value flexibility.
But according to a recent study from the National Bureau of Economic Research (NBER), flexible work arrangements don’t count for much when people decide where they want to work.
Princeton economist Alexandre Mas and Harvard economist Amanda Pallais tested how much value workers placed on flexibility while they were recruiting call center workers for another study. After applicants applied for the job, the researchers asked more than 3,000 of them to choose between a job that offered a standard 9-to-5 schedule or the same job, but with one of five flexible scheduling options: choose when to work; choose how many hours to work; work on a traditional schedule, but from home; choose both how much to work and when; and hear from your employer one week in advance when you’ll work.
The difference between hourly pay for each of the job options varied randomly. Sometimes it was the same. Sometimes the alternative work arrangement paid more, or a lot more, than the traditional job, and sometimes the traditional job paid better.
Mas and Pallais found that when workers chose between the two types of jobs presented to them—one an alternative work arrangement and one a traditional, office-based, 9-to-5 job—workers overwhelmingly place little value on flexible options.
The chart below details how much applicants on average were willing to give up in pay per hour in order to obtain an alternative work arrangement rather than a traditional, office-based, 9-to-5 job. On average, they were willing to take a pay cut of 48 cents an hour if they could set their own schedules. But they weren’t willing to give up any pay to set their own number of hours. In fact, they were willing to take a pay cut of 22 cents an hour to avoid that option. In a focus group, workers said that they were worried they would not work as many hours as they should if they had the choice.
When the traditional and flexible scheduling options paid the same, only 60% of applicants chose the option to schedule their own hours. When applicants knew they would be paid $5 more per hour to choose their own schedule, 20% of them still chose the fixed schedule.
More than anything, applicants valued not having their employers choose their schedules a week in advance. They were on average willing to accept a $3.41 per hour pay cut in order to have a traditional regular schedule instead. People didn’t want a variable schedule set by employers because they didn’t want to be assigned weekends and evenings, the researchers said.
Millenials in the study didn’t have special feelings about flexiblity. The strongest predictor of whether someone would choose a flexible arrangement over a traditional schedule was gender, with women about 30% more likely to choose flexible schedules than men.
One reason the results of this experiment may differ from the common perception that flexibility is a deciding factor for prospective employees (especially Millenial employees) is that there have been few studies that ask job applicants to actually put a value on flexibility.
“If you ask people, do you prefer flexibility? Of course, everyone would say yes, they prefer flexibility,” Mas said. “But when you pose it as, ‘You can chose a job where you get paid less, do you want to take that?’ That’s a different scenario. It’s rubber meets the road at that point, and people, at at least what we found, largely say no.”
The PWC survey that is often cited as evidence that Millenials would rather “give up pay or delay a promotion to achieve an ideal schedule,” for example, asked its survey panel “Which three benefits would you most value from an employer?” Higher pay wasn’t an option, only “I’d prefer no benefits and higher wages.” When in the same study Millenials were asked, “Which of the following things do you believe make an organization an attractive employer?” 44% said competitive wages. Only 21% said flexible work schedule.
Another often-cited study, which examined the gig economy, asked survey respondents about their “satisfaction” with the flexiblity in their work and found that those who worked in the gig economy rated this quality higher than those who had traditional jobs. Again, this is not quite the same as valuing flexibility. “I don’t doubt that when people have more flexible jobs they’re more satisfied,” Mas says. “I also believe that when people are paid more they are more satisfied.”
The idea that workers, especially Millenials, love flexibility has become an important matter for companies setting policies. In the gig economy, it’s become the broken record response from companies like Uber, Lyft, and Handy when anybody questions the arrangements they have with their workers, who do not have benefits such as employer-contributed social security payments or unemployment insurance because they are not technically employees.
Sometimes, “flexibility” actually means that employers have flexibility to set their workers’ hours on short notice.
“People just want a fixed schedule,” Mas says. “They don’t really care about being able to adjust it.”