How Much Is Work-Life Balance Worth on the Job Market?

Mar 23, 2017 | By Suman Gidwani, Dan Connolly & Uyhun Ung in Blog

 

work life balance

People talk about achieving work-life balance all the time: if you want better balance, you can just utilize your strengths, or not be afraid to say no, or buy a #wearable. But the fact that achieving work-life balance continues to be a listicle topic du jour suggests that these solutions aren’t the real answers. Solutions to the problem of work-life conflict are not costless. So the ideas42 work-life balance team ran a simple experiment: How much do we really value work-life balance? What do we expect as compensation, and what are we willing to give up?

Our experiment tested how varying levels of work-life balance described in a job posting affected the desirability of the job, the perception of its prestige, and how much people expected that job to pay. We showed our roughly ~1000 participants (recruited through Amazon’s Mechanical Turk) three different job descriptions: one with relatively worse work-life balance (50-60 hours per week, frequent weekend work, long hours every day), one with relatively better work-life balance (flexible working policies, no more than 40 hours per week, weekend work “extremely uncommon”), and one with a neutral work-life balance (no concrete mention of what to expect). We presented each condition and asked participants to rate how prestigious and desirable they found the jobs, as well as what they thought the average salaries were.

Here’s what we thought we would see: Given what we’ve been hearing during our qualitative research on the importance of work-life balance, we predicted that we would see a rise in expected salary as the work hours of a job increased. If work-life balance is a valuable trait for a job, then participants should expect jobs with worse work-life balance to pay more. We then hypothesized that if people are willing to trade salary for flexibility and balance, then desirability should remain stable. Finally, we hypothesized that prestige of a job might be a confound: the job with poor work-life balance might be perceived as more prestigious, therefore warranting higher salary estimates and more desirability.

What did we find? Last things first: There was no difference in perceived prestige across the conditions. The job with poor work-life balance was as prestigious as the jobs with neutral and good work-life balance, indicating that people did not assign additional merit to a job with poor work-life balance.

Desirability told an equally interesting story. Participants found the jobs to be significantly different in desirability, with desirability increasing as work-life balance increased. Originally, we hypothesized that if participants expected that as work-life balance went down, salary went up, then these inversely related job traits would result in no net effect on desirability. But it could be the case that the reverse is true: people see the jobs as varying in desirability because they think the jobs pay about the same, so work-life balance is what makes a difference in how desirable the jobs are.

Well, it turns out that’s not true either. While people find jobs with a good work-life balance more desirable, they do not necessarily expect that those jobs pay less. The job with poor work-life balance did elicit a higher expected average salary, but there was no significant difference in expected salary between good and neutral jobs.

One hypothesis is that until we presented the job with poor work-life balance, the value of work-life balance was not salient enough to affect salary estimates We also might be encountering simple loss aversion: people were much more averse to losing work-life balance in the poor condition, leading to higher expected salary, than they were excited about gaining work-life balance.

Peeling back one more layer of this story, we found that a 25-50% increase in work hours (from 40 hours in the neutral condition to 50-60 hours in the poor condition) led to only a 10% increase in expected salary, showing an imbalance between perception of work hours and salary. Troublingly, this suggests that additional hours per employee are cheap on the labor market – not just because of the fixed costs of recruiting, hiring, and benefits, but because individual workers don’t trade off time and wages at an equivalent rate.

What did we learn from this experiment? Advertising work-life balance has no effect on perceived prestige of a job, but it does make a job more attractive. In addition, improvement in work-life balance doesn’t lead people to think that it pays less, but people definitely expect to be paid more for a decline in work-life balance.

What does this mean for you? We recommend job-seekers think carefully about what they’re willing to forgo for a higher salary. On the hiring side, understand that good work-life balance can make a job seem more desirable to candidates.