Can flexible working really impact the bottom line?

Working from home

Flexible working was once a rare exception in many businesses. Back in 2002 when the legal right for some employees to request flexible working was first introduced, fears were raised on the impact this might have on an organisation.

The reality and what we are seeing a decade later is very different. Latest Chartered Institute of Personnel & Development figures (CIPD, May 2012) suggest that 75 per cent of the UK’s current workforce now utilise some form of flexible working.

Even though unemployment levels are high, many companies struggle to find high quality skilled candidates. Often, those employees who utilise a more flexible arrangement with their current employer experience difficulty finding a new, similarly balanced role.

Many skilled workers are striving for a better work-life balance.

David Cameron and Nick Clegg revealed that the Coalition Government cabinet would be adopting flexible hours so that these high profile working dads could share parenting duties.
But flexible working is not just for parents and carers. The Government is looking into extending the right to request flexible working to everyone – and that’s not just because it’s what employees want. Research has proved that it can deliver exceptional efficiencies and benefits to business.

Sarah Jackson, Chief Executive of work-life balance organisation Working Families says that the Government’s Modern Workplaces Consultation Paper suggests that a proposed extension of the right to request flexible working will lead to an estimated £222.5 million net benefit to employers.

Don’t assume flexible working automatically means part-time. Flexible working may mean full-time – but at hours outside the traditional 9-5. It could mean working slightly shorter hours, perhaps working some of the time from home. Often an office based, slightly later start which allows an individual to see children off to school is all the flex that is required to benefit. The idea is that you find the right balance that works for both employer and employee, ‘Flexible working’ is more of an attitude and approach to attracting and keeping good people in your organisation, rather than a process.

Key benefits to business include:

  •  Recruitment and retention – Companies can attract high calibre job applicants if they offer flexible working. A PricewaterhouseCoopers (PwC) survey found that flexible working is now more highly-valued by both men and women ahead of bonuses. Companies with flexible working policies also retain employees longer, reducing costs in advertising, recruiting and training staff. Empowering staff to work remotely might allow you to employ a highly-qualified applicant who lives too far away to commute and doesn’t want to move home in the current climate.
  • Cost savings – Flexible working can save money in other ways including lower pro-rata salary and benefits packages. If you have more than one employee working flexibly they can share desk space reducing overheads and allowing you to grow your business without needing more office space. Staff working from home can reduce office costs further.
  • Forging loyalty – The value employees place on flexible working means they show greater loyalty and commitment and are more likely to go that extra mile when the company needs it. Some people work better at different times of the day and flexible working means they can work when they are at their best – increasing productivity.
  • Reduce absenteeism – A survey by the Chartered Institute of Personnel and Development (CIPD) and Simplyhealth in October 2011 said stress had become the number one cause of long-term workplace absence. Employees working flexibly are less likely to be affected by stress.
  • Company brand – A reputation for offering flexible working creates a positive image of your company with its customers and in the wider community.
  • Improved customer service – Having staff working various hours extends the times at which your company can operate meaning greater convenience for customers.

Here are some examples of companies reaping the benefits of recruiting flexibly.

A local SME who didn’t quite have the recruitment budget to compete with larger organisations was encouraged to consider recruiting for a full-time position more flexibly to become more competitive in the candidate marketplace. By offering flexibility around working hours they were able to attract high calibre candidates and ended up with a new employee who valued the opportunity to use her expertise and also achieve a better work-life balance. Salary budget restrictions might have prevented them employing someone as well qualified without the additional benefit of flexible hours.

A large, global organisation was suffering staff retention issues. The high turnover rate meant heavy costs in terms of recruitment, advertising and training. By recruiting for the most problematic permanent positions more flexibly they have attracted professional and experienced employees looking for a better work-life balance. Staff retention rates increased dramatically, substantially reducing the company’s recruitment spend.

A new local start-up business needed to grow cost-effectively by recruiting new employees more flexibly. By employing well-experienced people who worked a shorter day or week in exchange for pro-rata salary and benefits packages, the business was able to grow at a financially manageable rate. It also means that they have been able to take on additional employees they hadn’t anticipated being able to afford, allowing them to grow their business profitably at a much quicker rate than expected.

Having a more ‘flexible’ approach can enable a business to becomes more efficient, productive and streamlined; building more loyal and resilient workforces, all while reducing cost.