How Ryan Flipped To Flex
Like other professional services firms, Ryan LLC had a long history of demanding in-office hours — until a top employee’s resignation spawned a cultural shift to total flexibility.
|In 2002, Kristi Bryant joined professional tax services firm Ryan LLC as an entry-level consultant. By 2007, she had successfully climbed the corporate ladder by becoming a team leader at the firm. With the added responsibilities came the typical trappings of a corporate manager, mainly the rigorous, 60-hour-plus workweeks, many of which stretched well into the weekends.|
This sort of culture is standard practice in the tax industry. It had been at Dallas-based Ryan since its 1991 founding by CEO and chairman Brint Ryan. Prior to 2008, all of Ryan’s roughly 600 employees were required to be in the office at least 55 hours a week and log each hour of their work, billable to clients or not.
But by 2007, with her wedding approaching the following year, Bryant had had enough. “I felt like if this was what it was going to be like,” she said, referring to Ryan’s strict in-office hours policy, “I probably was not going to be able to keep up mentally and emotionally to be there for my family.”
Bryant submitted her resignation. What she likely didn’t expect was the reaction from Ryan, the firm’s CEO. Instead of accepting Bryant’s resignation, Ryan asked that she stay and be part of an effort to change the company’s culture around flexibility. Bryant was one of the firm’s top employees, and Ryan wasn’t about to let her go because of an outdated industry practice.
In fact, this wasn’t the first time Ryan was at risk of losing top talent over the firm’s hourly work environment. At that time, in 2007, the firm’s annual turnover rate was 22 percent, likely attributable to the lack of employee work-life balance. “Frankly, I was fed up about hearing about it,” Ryan said. “I was fed up with the complaints. I was fed up with the surveys and the information we were getting back.” He called for a team to figure out a companywide flexibility policy — and to do it quickly.
The resulting policy, “myRyan,” completely changed the firm’s culture. Today, Ryan employees only track client billable and project hours, along with internal project hours, according to Delta Emerson, Ryan’s president of global shared services. But employees’ work time, save for certain groups, is entirely flexible. Some workers, for instance, might spend about 70 percent of their time in the office and 30 percent working remotely, while others might split their time 60-40.
Voluntary turnover, meanwhile, is now in the single digits, and the business has grown significantly thanks to a number of acquisitions that coincided with the flex policy implementation. Most important, client satisfaction has increased. “The most important thing we learned throughout this whole exercise is that myRyan, in our view, enables people to achieve not just success at work, but success in life,” Ryan said.
Nevertheless, the transition to flexible work didn’t go entirely smooth. Managers experienced some initial discomfort with the practice, and extensive training was required to familiarize leaders with how to determine each team’s flexibility framework.
Flexibility has grown into a must-have in the talent economy. Thanks to advances in collaboration and communication technology, as well as shifting attitudes around what constitutes employee productivity, more firms have adopted policies loosening rules around workers’ in-office time. Around 80 percent of companies offer flexible work arrangements to employees, according to an October 2015 survey by WorldatWork, a nonprofit human resources association, and FlexJobs, a careers website. However, of those companies, only 37 percent have a written policy on employee flexibility.
Moreover, many forms of “flex-work” aren’t entirely flexible, according to Laura Sherbin, chief financial officer and director of research at Center for Talent Innovation, a nonprofit think tank in New York City. Some companies’ flexible work policies require employees to be in the office but in staggered hours, while others include various levels of autonomous flexibility as long as employees communicate with their manager and co-workers.
The idea that knowledge workers could work remotely out of the office started with business travelers. In client-facing industries especially, these workers could maintain their output while being on the road tending to clients. Sherbin said the concept went mainstream thanks to Lehman Brothers Holdings Inc., the now-defunct investment bank at the heart of the 2008 financial crisis. Shortly after the September 11 attacks in New York City, Lehman started a policy so it could still operate in the event that all its employees had to work remotely. “They were able to really flip the conversation and make it something that every manager needed to do,” Sherbin said.
Flexible work arrangements rose in popularity pre-2008, then some companies pulled back on the offering after the financial crisis. The firms that maintained the benefit, however, “realized that in the absence of huge monetary rewards that they used to be able to pay their employees, flex work was actually a great nonmonetary reward,” Sherbin said.
When Emerson started working as a senior director for the training function at Ryan in 2004, she noticed an unbalanced system of long workdays. Even if an employee worked 16 hours one day, Emerson said, they still had to work at least the required daily eight hours the following day to avoid pulling from their allotted paid time off banks. Policies like this led to high turnover, with an estimated 60 percent of employees mentioning in their exit interviews that a lack of work-life balance factored into their decision.
The culture of long in-office hours permeated other aspects of the firm. Internal talent reviews, for instance, used employee hours logged as a point to award raises and promotions. “We’ve realized that that was really a false and meaningless metric,” Emerson said, because regardless of how many hours someone works, client satisfaction and revenue are more important.
Although myRyan didn’t come into effect until 2008, the precursor to it came in 2006 with the firm’s 24-employee Workforce Effectiveness Committee, chaired by Emerson and set up to rethink employee flexibility. The team gathered research and discussed ideas to reduce turnover, Emerson said, as well as how a potential flexibility policy could contribute to the firm’s performance. Ryan’s Houston office at the time had the highest voluntary turnover rate of the entire company — about 30 percent for its 80 employees. As a result, Emerson and her team decided to pilot a flexible work program there in the fall of 2007.
Bryant’s resignation submission expedited a companywide rollout of the program the following year. Ryan tasked Emerson and her team with figuring out the new system.
The shift started in January 2008, with the official rollout of myRyan the following August. During these months, ongoing communication efforts kept employees informed of upcoming changes. The firm’s 70 managers also received training ahead of time so they could best lead its more than 600 employees in the transition. Still, not all managers were keen on the idea. Some thought nobody would show up to work. Other leaders just wanted to get the job done and serve clients.
The policy would nonetheless have a set of fundamental principles. What became clear early on was that the firm’s flexibility policy would look different for each team. Receptionists, for example, must have the phones covered from 7 a.m. to 8 p.m. However, these shifts aren’t set in stone. Every two weeks, the firm’s receptionists at the Dallas office determine how to divvy up each of their required 30 hours a week, providing accommodation for those who like long days or who enjoy coming to the office later in the day. Otherwise, salaried employees can work anywhere, anytime, as long as they meet results.
To hold workers accountable to goals, the firm created a “Ryan Success Measures” dashboard. After giving thought to each position and group, Emerson and her team decided on what benchmarks and goals to track for everyone and which to customize. Items such as client satisfaction scores, revenue generation and goal achievement track within the dashboard to provide managers with the concrete results employees produce. This software, created by an internal IT, finance and human resources team, took about a year to complete after myRyan went live.
Finally, when an employee isn’t performing, there is an option to pull their flexibility benefit, although it happens rarely. “We’re assuming going in that everybody has earned it, and it’s yours to lose,” Emerson said. The dashboard system allows for total transparency, so employees are aware if their production numbers are slipping to the point where the benefit might be revoked.
Even with these principles in vvshift to flexibility needed outside help amid some early struggles, namely manager discomfort and confusion around team-specific policies. With a few years of myRyan under its belt, the firm signed up in 2011 and 2012 for the “National Workplace Flexibility Study,” a coordinated research effort by Life Meets Work, Career Life Alliance and the Boston College Center for Work & Family.
The trio studied and provided tools to three organizations, including Ryan. Jennifer Sabatini Fraone, associate director of Boston College Center for Work & Family, conducted surveys and focus groups with the organizations; Kyra Cavanaugh, president of Life Meets Work, led training; and Kathy Kacher, president of Career Life Alliance, conducted follow up coaching with managers.
At first, managers expressed positive feelings about myRyan, but they still needed better communication tools and resources for making the program customized for each team. “In general, flexibility is not something that can be prescribed or strictly dictated from the top of an organization,” Fraone said. “Each work group is so unique in their functions, in their goals, in how they measure productivity that each group needs to be able to figure out how flexibility works for them.”
Cavanaugh conducted three workshops with Ryan managers in February 2012 to address these concerns. The workshop, called “Working as a Flex Team,” included topics around communication and team-building tactics, performance management strategies, optimizing technology and measuring success.
An important part of the coaching on team-based customization came in the form of a Flex Team Blueprint. The document guides teams with a list of questions and suggestions for how to build its individual flexible work framework, including those around success factors and team-specific challenges. Most important, the blueprint helps determine meeting frequency, expectations around employee accessibility and communication strategies and priorities. A team’s final agreement on these grounds ends up as a formal agreement.
This Flex Team Blueprint helps teams agree on the above listed aspects of flexible work, so each person is on the same page. Later, when a new hire comes on, groups use it to onboard their new employees. Teams can also revisit their agreement and change as needed.
The researchers planned a 90-day pilot between the training and post-study surveys to assess managers’ change in attitudes around flex work. In the post-study survey in August 2012, Fraone used questions from the pre-intervention survey to measure the change. Before the study, 73 percent of managers felt that if they had a question about managing flexible work, they would know where to turn for help. After the study, 93 percent knew where to look. Another prior concern was that managers would play favorites; that item in the survey decreased by 40 percentage points after the study.
A final concern from managers was that myRyan would lead to a decrease in productivity and customer service. However, 22 percent of managers from the study saw improvements on both fronts, Fraone said. Also, 98 percent of managers participating in the study said they saw flexibility having a positive impact.
Today, Ryan has training for both teams and managers called “myRyan Team Blueprint Agreement.” “If we had not done that [study], I’m not sure we would have figured out how to handle the Team Blueprint,” Emerson said. “It was our missing piece.”
When the myRyan project began, the firm had 677 employees. Following multiple mergers and acquisitions, the company is now global and employs around 2,200 employees and receives numerous awards each year for its workplace culture.
“It’s not even comparable to what it was before,” Bryant said, referring to Ryan’s culture. She said she now works around 45 hours per week, which helps her be present at work and with her husband and two children. “There’s just a general consideration for each other’s time, but yet also the ultimate goal is to get the work done in an efficient manner.”
Although the time and location for getting work done looks different for each group, about 75 percent of Emerson’s 200-person team are at the office most days and 25 percent at home. Other teams, such as service delivery, might have a 60-40 split, she said.
This variety of flexibility has led to boosts in employee morale and other tangible benefits. Despite implementing this program at the start of the financial crisis, Ryan said the following year was “the most profitable year in our history.” “What it proved to me was that not only could we do this, but we could do it and still achieve a very strong result financially and a very strong result organically,” Ryan said.
As a recruiting tool, myRyan has proved especially successful. Emerson said that during onboarding conferences, Ryan asks his new hires if their decision to join the firm had anything to do with myRyan. “Every hand, invariably, in every chat that we get from those who respond to the poll on the WebEx, goes up,” Emerson said. “It’s at least 90-95 percent. It’s a huge factor in what draws people to Ryan.”
Client satisfaction has also increased. During the first year of myRyan, client service scores increased six percentage points to 96 percent, according to a 2013 case study on Ryan’s implementation by professional services firm Deloitte. In 2012, the score jumped to 98 percent. Perhaps most important, turnover has also improved. In 2007, the firm’s annual turnover rate was 23 percent; by 2010, it had shrunk to 8 percent.
Still, there’s work to be done, as the firm aims to expand on the success of myRyan into other initiatives. One such effort is “Great Rated Teams,” an initiative planned for the end of 2016 that will survey people at the team level to determine if the myRyan culture seeped into each of the company’s roughly 450 teams.
The current measures of success will morph from the Ryan Success Measures dashboard into a separate Great Rated Teams dashboard. The existing dashboard puts heaviest weight on goal or revenue achievement. However, the new dashboard will feature team engagement factors and employee feelings about management.
Additionally, the company plans to revisit its real estate needs, as those who work from home won’t need permanent desk space at the firm’s office. Emerson said Ryan is considering establishing more collaborative, unassigned work areas for employees likely to work remotely most of the time.
Looking back, Emerson acknowledged the risks involved in switching to myRyan. While the arrangement has ultimately benefited the firm, it didn’t come without its share of headaches. When initiated there were about a dozen employees who never showed up to work and were let go. These initial pains, however, helped Ryan rid its culture of the wrong people and further aligned it with a strategy to keep and continue to attract the right people.
“You have to take a leap of faith that the most talented people — those that you want to keep — are the ones who are going to be responsible for achieving the result,” Emerson said.
Lauren Dixon is an Associate Editor at Talent Economy.