Workplace Flexibility is a Key Component of Compensation

For US workers, options like hybrid/remote work and flextime are no longer rare luxuries or “nice to have” perks. According to a new survey from The Conference Board, a majority now consider workplace flexibility a basic element of competitive compensation—one that can make or break a company’s ability to attract and retain talent.

Overall, the survey finds exactly 50% of US workers are satisfied with their current compensation. With average annual pay raises already at 22-year highs, simply raising base salaries further may soon be cost-prohibitive. In this environment, forms of non-salary compensation are increasingly important.

Among these non-salary elements, nearly 2 in 3 workers rank workplace flexibility options (location, hours) as important. That’s higher than any other component of total rewards—including competitive bonuses, paid time off, retirement plans, and healthcare options.

The latest workforce survey from The Conference Board was fielded from September 20 to October 4 and polled over 1,500 US employees—predominantly office workers. Respondents weighed in on their current work situation, how they felt about their current compensation, and what benefits they value most.

COMPENSATION PRIORITIES

When asked to select the five non-salary compensation elements they considered most important, there was broad consensus among US workers surveyed in September 2023:

• 65% said workplace flexibility options (location, hours).
• 64% said bonus, commission, or other incentive pay.
• 60% said generous paid time off.
• 59% said retirement plans – company contribution/match to 401(k) or 403(b).
• 53% said healthcare plans that are flexible and affordable.

These findings corroborate our previous survey, when the same five items topped the list. In February 2022:

• 71% said workplace flexibility options (location, hours) were important.
• Only retirement plans ranked higher (72%).

Far fewer respondents prioritized items beyond this top five. In the latest survey:

• 35% said equity awards (stock options or stock grants).
• 21% said dental/vision plan.
• 14% said employee wellness programs.
• 13% said mentoring/coaching programs.
• All other options—e.g., student debt relief, parental leave, tuition reimbursement—scored under 10%.

“The drumbeat of ‘Return to Office’ has faded to a new reality: Flexibility, in one form or another, is here to stay,” said Diana Scott, Leader of The Conference Board Human Capital Center. “A year ago, many foresaw an impending recession that would loosen the job market and compel workers back toward the prepandemic normal. Instead, 2023 has seen a remarkably resilient economy continue to empower workers—and workers value flexible work arrangements.”

“Employees’ focus on flexibility amid a tight labor market puts the onus on HR leaders and C-suites to ensure hybrid workforces remain engaged, productive, and connected in the years ahead,” said Rita Meyerson, EdD, Principal Researcher at The Conference Board. “But it also opens new avenues in the competition for talent. Unlike salaries, bonuses, health care or retirement plans, workplace flexibility is the rare employee benefit that can save—rather than drain—financial resources, giving an advantage to companies that plan proactively.”

VALUING FLEXIBILITY

A notable gender gap exists in compensation preferences. Generally, women value workplace flexibility and related benefits more than men do:

• 72% of women prioritize workplace flexibility options, compared to 57% of men.
• 64% of women prioritize generous paid time off, compared to 55% of men.

By contrast, men—who are more likely to switch jobs than women—put relatively greater emphasis on financial incentives:

• 41% of men value equity awards (stock options/grants), compared to 29% of women.
• 66% of men value bonus, commission, or other incentive pay, compared to 62% of women.

Employees whose current working situation is partially or fully remote value flexibility more than in-person workers—and may be unlikely to consider jobs that don’t offer similar options:   

• 67% of current remote-only workers prioritize workplace flexibility options.
• 68% of current hybrid workers prioritize workplace flexibility options.
• 49% of current in-person–only workers prioritize workplace flexibility options.
• Just 15% of survey respondents currently work entirely in-person—versus 53% hybrid and 32% remote-only. This suggests firms that don’t offer flexible options will face an increasingly limited hiring pool.