The business case for flexible working
As with any changes in working practices and policies, they are only sustainable if there is a positive business rationale. Given the various barriers described above, having a good evidence base for the benefits of flexible working is essential.
The key benefits were previously outlined, but they are worth exploring in more detail.
Attraction of talent
Most organisations today, particularly as we are seeing record high levels of employment currently, are finding it harder to access and recruit the skills they need. There is a strong unmet demand for more flexible jobs, which will open up new supplies of talent.
Timewise have used the research evidence that 87% of people want to work flexibly, but only 11% of jobs are advertised as being flexible, although as noted, this is on the increase.31 This is especially true for roles with skill shortages and hard-to-fill vacancies.32 Their research also showed that today only just over 10% of jobs at /(20k full-time equivalent are advertised as being open to flexible working. A vital step in showing how the organisation is taking flexible working seriously and seeking to attract more diverse talent, is to advertise jobs as being open to flexible working.
In the UK, there is an initiative supported by the UK Flexible Working Taskforce (jointly chaired by the CIPD and Department for Business) to use a tagline on job adverts first promoted by Working Families of‘Happy to Talk Flexible’ working. More and more organisations are using this but there is still a long way to go.
Improved engagement, job satisfaction and loyalty
Staff are more likely to recommend their employer, stay loyal to their organisation, and go the extra mile if their employer offers flexible working. Flexible workers have a higher level of job satisfaction, commitment, and are more likely to increase discretionary effort compared to those who do not work flexibly.33 Engagement in these terms can yield significant advantages for employers — potentially generating 43% more revenue and improving performance by 20%, compared to disengaged employees.34
Reduced absenteeism and improved wellbeing
Flexible working can reduce absence rate35 as it allows employees to manage disability and long-term health conditions as well as supporting their mental health and stress.36 From all the characteristics that have been studied of what a good job looks like and how people feel about their work, improving or sustaining their wellbeing is for most the most significant determinant of their engagement and their productivity.37
Parents and carers (especially those on low incomes) benefit the most. They tend to have increased wellbeing and are less troubled by stress when given access to flexible work.38
Employee retention and progression
Flexible working practices are a key reason for staff at all career stages being satisfied with their work and staying with their employer. Access to flexible working allows people to continue working as their life circumstances change and therefore can reduce staff turnover. For example, in the USA, work redesign initiatives in retail have shown a positive link between working-time flexibility and reduced voluntary turnover as reported by Timewise in their 2018 research paper on flexible working in retail. The US technology products retailer Best Buy trialled giving employees flexibility over working time and measured productivity in the trial teams. Voluntary turnover rates reduced by 90% and productivity increased by 41%. People were happier and healthier too and more motivated to stay.39
For senior and managerial staff, flexible working arrangements are pivotal for being able to continue to work and develop as professionals, particularly if they become parents.40 For entry-level employees, flexible working reduces job-life spillover, which in turn improves retention and commitment.41
Productivity
Employees and managers agree that flexible working increases individual performance and can be more motivating than a bonus or extra pay. A 2017 study by HSBC found that nine in ten employees consider flexible working to be a key motivator to their productivity at work (89% — even more than financial incentives at 77%).42 Of those who have access to remote working, 81% believe it increases their productivity. Managers and co-workers also report a positive or neutral impact on individual performance in terms of quality and quantity of work when flexible working practices are adopted.43
When it comes to working with others, flexible work schedules help employees balance their work and life responsibilities and boost performance,44 increasing average labour productivity for large and small businesses.
Improving workforce gender diversity
By providing more opportunities for women with children to return to work, the normalisation and support of flexible working arrangements can help businesses to reduce their gender pay gap.45 Flexible working supports more diverse talent pipelines within organisations and helps improve board level diversity. As some global analysis shows, companies with diverse boards outperform their rivals and have an opportunity cost equivalent to around 3% of UK GDP.41’ Well-publicised research by McKinsey has shown how gender diverse leadership teams also deliver an 18% return on equity premium, which they estimated could add /^150 billion a year to the UK economy by 2025.47
Engaging and retaining older workers
Flexible working is also important for many workers as they get older. Their need and ability to work changes, and some flexibility in work is often critical to attracting and retaining them.
In almost all of the more developed nations in the world, populations and workforces are ageing, so providing the flexibility for older workers to continue to engage is an important economic and social imperative. Europe, the US, Russia, Japan and Korea all have significantly ageing populations. As an example, in the UK a third of workers will be over 50 by 2020, and within 20 years, nearly a quarter of the UK population will be aged 65 or over. Japan has already reached these kinds of statistics, driving a lot of change in the workplace to support and sustain the older workforce. The US Bureau of Labor Statistics reported that by 2024, 25% of the US workforce will be composed of workers over the age of 55, and a third of those workers will be older than 65.
Labour market participation for the over 50 age groups are therefore of necessity increasing, particularly among women. In the UK the percentage of workers aged 65 and over has doubled in the last decade.48 This potentially marks a reversal of the trend towards early retirement observed in the last quarter of the 20th century. But still participation rate in the UK is lower at 11% than the G7 average of 15%.
Agility and responsiveness to market change
Flexible working allows companies to adapt to fluctuating market demand to boost responsiveness and competitiveness. The Confederation for British Industry (CBI) Employment Trends survey 2017 found that 99% of all businesses surveyed believes that a flexible workforce is vital or important to competitiveness and the prospects for business investment and job creation.49
Tesco, Lloyds Banking Group and the Ford Motor Company are three examples of organisations using flexible working to increase responsiveness to customer demand:
- • A Tesco superstore uses part-time working and multi-skilling practices to meet customer demand more effectively, generating value equivalent to approximately 13% of total workforce costs.
- • A head office function of Lloyds Banking Group generates value equivalent to 7% of total workforce costs through using freelancers to meet seasonal demand and locating staff across multiple sites to lower the costs of their premises.
- • A Ford Motor Company Ltd manufacturing plant saves the equivalent of about 3% of total plant costs by using outsourcing, flexible absence cover and alternative maintenance shifts to achieve cover in line with plant needs.50
