Part-Timers Gain Status, Benefits

Dec. 21, 2004
Shorter schedules encourage worker loyalty.

If all goes as planned, Janean Kleist will receive her doctorate in industrial relations from the University of Minnesota by yearend -- a laudable accomplishment for any working parent, let alone one who is the mother of four-year-old triplet sons and manager of executive compensation at Medtronic Inc. Her educational accomplishment might not have been possible -- and it surely would have been far more difficult -- without the enlightened human resource policies of Minneapolis-based Medtronic. The medical instrument manufacturer provides to part-time employees who work 32 hours a week or more the same benefits coverage (at no additional cost) that full-time employees receive. It also offers flexible hours. "The fact that benefits were no longer an issue eased the burden," says Kleist, whose part-time flexible schedule has allowed her to work from 6 a.m. to noon five days a week in the office plus a couple of hours at home. "Without that, it would have been a decision between working and not working. And my decision might have been different," she says. "But Medtronic has made a strong commitment [to the notion] that people have a balance in their work and family lives. That has allowed me to keep my career." The number of companies offering some benefits to part-time workers has been rising in recent years because of the tight labor market. But the number of companies that extend their entire benefits package --not just health and dental coverage, paid time off, and paid vacation -- to part-timers is still small. That's why IW Best-Managed Companies such as Medtronic, Sun Microsystems Inc., Baxter International Inc., Steelcase Inc., and Hewlett-Packard Co. stand out in the packages they provide. In most cases employees must work 20 hours per week to get benefits, although at Steelcase they need work only eight hours a week. "When we began to do this [in the early '80s], there was not a competitive need," says David Ness, vice president, compensation and benefits, Medtronic. "We just felt that there was an obligation on our part to provide a safety net to part-time employees. We feel that part-time employees are equally as important as full-time employees. The only difference is in the number of hours worked." Deb VanderMolen, who is in charge of work/life strategies for Steelcase, agrees. "It never occurred to us not to offer benefits" when part-time work and job-sharing became part of the company culture in 1972. Today, however, Medtronic and others have found that what they began because it was the right thing to do also gives them an edge in recruiting and retaining employees. "Potential job candidates see us as being responsive to the needs of our employees and taking care of their benefits," says Ness. "And it is a big advantage to us if we can retain a highly productive person who feels the need for more time off work to deal with family or personal issues." Medtronic's package for part-timers, for example, includes everything except long-term disability and sick pay for illnesses or injuries up to five days. "What's unique is that we offer all of the benefits to part-timers," says Ness, including salary continuation up to a maximum of 22 weeks if an individual is unable to work due to illness or injury. "All you need is to be an employee. Benefits for adoption assistance and tuition reimbursement are not trimmed in half if you work only 20 hours a week." However, unlike full-timers, part-timers working less than 32 a hours week at Medtronic -- unless they were previously a full-time employee, which a majority of them are -- must wait one year to be eligible for medical and dental benefits; the 40l(k) plan, in which the company match is in stock; and the employee stock ownership plan, in which employees receive Medtronic stock based on their salary and the company's performance. (Based on the stock's performance, that's a valuable benefit. Medtronic stock has grown at an average annual rate of 37.6% over the last 14 years. In other words, 50 shares of Medtronic stock purchased 10 years ago for $1,817 would be worth about $44,000 today.) Part-timers at Medtronic who work 20 to 31 hours a week must pay 40% of their medical and dental premiums compared to 20% for full-timers, and vacation time is accrued based on hours worked. "We tend to be pretty egalitarian, but in proportion," says Ness. A similar sliding scale based on hours worked is how most companies determine how much part-timers will pay for health and dental benefits. But at Sun Microsystems, as long as an employee in the U.S. works 20 hours a week or five months a year, he or she receives the same amount of Sun Dollars as a full-time employee to spend in the flexible benefits plan. In addition, Sun sponsors entry fees, facilities' usage fees, and officials' fees for approved organized sports competitions in which employees participate. Sun also lets employees use as much as 16% of their pay to buy company stock at a discounted price, compared to the standard 10% cap at most employers. "To attract the best, you have to have a very competitive work environment," says Sun spokesperson Ken Bradshaw. "Part-timers get every benefit that full-time employees do." It's all part of the culture that Chairman and CEO Scott McNealy has tried to create. "There is more to life than work," says McNealy. "Maintaining the right balance between career and other parts of your life is necessary for your happiness and well-being. That's why we provide a broad range of benefits and programs to help [employees] achieve a healthy, active, and secure life." Getting an edge in attracting and retaining employees is just one of the ways companies can profit from treating part-timers like full-timers. "It helps companies that need clusters of people at certain times" and helps them extend customer service hours without creating hardships on employees, says Jane Weizmann, senior consultant in the Washington office of Watson Wyatt Worldwide, who believes that benefits for part-timers will be a growing trend because of workforce demographics. In addition, she says, "Instead of an ad hoc workforce, you can get a reliable workforce that is attached to you by more than just a [salaried or hourly] relationship. It creates loyalty among part-timers because of their ability to obtain benefits that they might not have been able to obtain or retain otherwise. And other employees might offer to work part time rather than quit the workforce outright." Encouraging part-time work pays off, says Medtronic's Ness: "My sense is that part-time employees have had a greater longevity at the company, on average, than full-time employees." He also believes that employees who have switched from full-time to part-time hours "produce more. They come in more fresh and energetic [than many full-timers] because they feel balanced in their lives." That's an opinion part-timers themselves share. "I feel that I can accomplish as much in 32 hours as I did in 40 hours because now I am more focused and efficient when I am here," says Karen Holtsclaw, a member of the diversity and inclusion team in the human resources department at Steelcase, who worked full time for 14 years before switching to a 32-hour schedule six years ago that includes half days on Monday and Friday. "You become highly efficient," concurs Gen Barron, who works four days a week as a manager at Medtronic's on-site health-and-wellness fitness center. "You learn to restructure your workdays so that they are more efficient." Many part-timers say that they find themselves with a higher commitment level after they switch from full-time to part-time status. "I am willing to go above and beyond what's required to get the job done," says Carol Chamberlain, a project leader in human resources information systems at Medtronic who seven years ago reduced her workload from full time to three days a week and then two. "I am very committed to Medtronic because of the opportunity to have flexibility, maintain my career, and continue to develop new skills." Part-time employees who work at companies where they have access to benefits say they have improved both their work and personal lives by reducing their hours in the workplace. "I'm sure Baxter wouldn't care if I went on a field trip with my son or daughter, but the frequency at which I'd feel comfortable doing that would be different if I worked full time," says Alice Campbell, director of work/life initiatives, who works four days a week and isn't sure she'd want to go back to full time. "That extra eight hours at home has made a huge difference in the ability to be involved in my son's life," adds Steelcase's Holtsclaw. "I'm just grateful that I have an employer that allows that flexibility . . . and the same access to benefits coverage. It makes a difference to me. With that comes security and peace of mind because I've had that choice." Nancy LaMarca, benefits design and delivery manager at Hewlett-Packard, who has taken off every other Friday for the last 18 months, agrees. "I can have a day to spend with my grandchildren and not feel stressed because I will have two other days to get all the things done that I need to. But it would have been difficult if I had had to give up health benefits." (Her husband, a software manager in the network division, has taken off every Friday for the last three years.) As much as the part-timers gain from the arrangements -- most part-timers readily concede that they wouldn't be working without the ability to retain their benefits -- the companies with such progressive policies benefit even more. "We have several employees with 20 or more years who have switched to part-time work," says VanderMolen. "It is good for them to ease into retirement, but it is also good for us to retain their knowledge and skills." Companies also are able to retain -- at least on a limited basis -- valuable workers who might have left the workforce completely without the ability to work part time with benefits. "Having one-half of a person is better than having no person at all," says LaMarca, noting that 2.5% of HP's employees work part time. Similarly, at Baxter, 3% to 5% of employees work part-time schedules at any given time including Campbell; Donna Namath, manager of work/life initiatives; and Terri Scanlon, manager of employee benefits. "I would not be working for Baxter . . . if I did not have this schedule," says Namath, who began working part time in 1988 because she had two small children and wanted to finish college "It was the sanity level I needed."

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