The business benefits of flexible working
The Authors
Peter Thomson, Director, Future Work Forum, Henley Management College, Henley-on-Thames, UK.
Abstract
Purpose – Flexible working is a key contributor to business success but is often categorised by the human resource (HR) function as a “family friendly” benefit. If it is introduced strategically it can make a major contribution to the bottom line and to the credibility of HR. this paper aims to look at flexible working and its business benefits.
Design/methodology/approach – This paper provides an overview of flexible working and its benefits, with the latter demonstrated through business and individual case studies, and puts forward a model for strategic implementation.
Findings – The East Riding of Yorkshire made substantial measurable improvements to the level of service through the introduction of flexible working and turned a department around from failure to award-winning in a period of two years. Individuals at Vodafone are successfully finding a work/life balance using flexible working options.
Originality/value – A well-managed project plan is required to ensure successful execution of a pilot and the implementation of new working practices across the organisation. The model for strategic implementation in this paper provides a best practice tool.
Article Type:
Research paper
Keyword(s):
Flexible working hours; Benefits; Business improvement; Corporate strategy; United Kingdom.
Journal:
Strategic HR Review
Volume:
7
Number:
2
Year:
2008
pp:
17-22
Copyright ©
Emerald Group Publishing Limited
ISSN:
1475-4398
Flexible working is growing rapidly in many organisations, thanks partly to legislation, such as that in the UK, which gives employees the right to request flexible working from their employer. However, it is all too often being introduced as a reaction to an employee request or in response to an operational issue and not as an integral part of human resource (HR) strategy. Yet there is now clear evidence that organisations that have embraced new working patterns have benefited from increased productivity, lower employee turnover and lower absenteeism.
One reason that flexible working is not viewed strategically is that it is often seen as an employee benefit and is included in “family friendly” policies designed to help employees with their work/life balance. Legislation, such as that in the UK, reinforces this message by giving the right to request flexible working to parents of young children and carers of disabled and elderly relatives. This right is not automatically extended to other employees, which inevitably gives out a strong message that child care is a valuable use of an individual's time but other personal activities are not. If employers simply follow the legislation they are effectively discriminating against people without children and even some people with children if they are aged over six.
Taking a strategic approach
If, however, HR directors were to take a strategic view of flexible working they would see that it is likely to be a major contributor to business success and should be introduced across the whole organisation and not just for a section of employees. While flexible working in its various forms is an employee benefit it is primarily a business tool to enable organisations to get better value for money from their human assets. If HR wants to be seen as part of the business and not just a service organisation, it needs to be driving for employee productivity and leading this change process. In practice, unfortunately, the HR function is often holding up progress by introducing laborious processes and policies that stop line managers from giving people flexibility to work in a way that suits their lifestyle.
It is put succinctly in the Equal Opportunities Commission's (2007) excellent report Enter the Timelords, as follows:
Change won't happen unless government, employers and employees stop thinking of this as just a personal issue, to be negotiated by individuals for specific caring reasons, that is, as a ‘concession’ from the norm, with only personal benefits. Third-generation flexibility is so much more powerful than that. It has the power to transform individuals' lives, the health of our businesses and the British economy.
So, what do we mean by flexible working?
We are often stuck with a view of “flexitime” as the only implementation of flexible working. This conjures up images of “clocking in” and counting hours, then taking time off at short notice to compensate. In practice we are experiencing a whole range of new working practices under the umbrella of flexible working. Any variation from full-time, Monday to Friday, “9 to 5,” fixed location or permanent work can get included in someone's definition of flexible working. It does not have to be variable on a week-by-week basis, but it probably has an element of employee choice or influence on the time and location of work.
One example of a popular flexible working pattern is compressed hours. This is where the employee chooses to work longer hours per day and take an extra day off regularly. The “nine-day fortnight” is a particular example of this and a popular implementation allows people to take three days off on alternate weekends. There is now an infinite variety of hours of work, some of which have been driven by customer demands for 24/7 services, and arrangements such as annualised hours, zero hours contracts and term-time working can be managed to align the availability of people with the prevailing workload.
The place of work has also become more flexible, encouraged by mobile technologies that allow people to work from their virtual office wherever they are. Initiatives such as the UK Government's Project Nomad
The benefits to be gained
The rate of return on well-founded and planned flexible working projects can be very high leading to improved business performance on service delivery and customer satisfaction, efficiency savings and reduced recruitment and retention costs. There are also environmental benefits and improvements in employee morale, productivity and loyalty. Examples are given below of improvements achieved in local authority environments and identified as part of the Nomad project:
- Moving from a central urban office to regional satellite offices produced savings of 33 per cent in accommodation costs.
- Flexible working arrangements led to a 25 per cent reduction in accommodation costs.
- Use of regional centres reduced work-related car journeys by 30 per cent.
- Substantial productivity improvements, often reported at over 25 per cent, resulting from:
- improved attendance stemming from lower absence;
- improved customer service due to increased contact at times convenient to the customer;
- reduced employee turnover leading to lower recruitment, induction and training costs;
- reported higher levels of employee satisfaction, up from 60 per cent to 89 per cent satisfied; and
- lower levels of reported stress.
UK public sector unit turns to flexible working
One good example that illustrates the business benefits of flexible working is East Riding of Yorkshire in the UK. East Riding of Yorkshire was created in April 1996 and became the largest unitary authority in the country. It was brought together from five different councils, with the intention of saving millions of pounds, which it did. The back office was centralised in Beverley, moving people from Goole or Bridlington, both 25 miles from Beverley. The Council employed about 17,000 people.
Revenue Services, a division of the Finance Directorate at Riding of Yorkshire, employed 270 staff. Its core business is collecting taxes, such as council tax, business rates, council house rents and sundry debtor accounts. The division also assessed housing and benefit claims and claims for social services. By 1999-2000, employee turnover was running at 35 per cent per annum and included 13 staff leaving on one day to go to the neighbouring authority, from a department of around 50. There were 7,800 claims waiting to be handled by Revenue Services and it was taking 103 days to assess a new claim (government guidelines are 36 days). Because of this, there were 1,000 face-to-face enquiries every week. So when a new head of service was appointed in March 2000, a fundamental service review was conducted to identify the issues. The key capacity constraint was identified as failing to retain capable staff.
Poor staff retention was directly linked to the working practices and the introduction of flexible working was identified as a potential solution. The ground was prepared by thinking about working at home, from home, touchdown centres, working close to home, fewer days and different cycles. High-level support was sought and, because the service was failing, the chief executive and council members were motivated to do something urgently.
Finding the right balance in the pilot
In November 2000, the first home workers were established with five people on a pilot. To keep up the momentum other initiatives were also introduced, including compressed working – either four days in five, or nine-day fortnights. This proved really successful, even at managerial level, and seems to have resulted in more commitment from workers when they are in the office. However there was still the issue of dragging people in on a 50-mile round trip. So, two processing centres were opened in August 2001, one in Bridlington and one in Goole, using accommodation that the council still owned.
By 2003 there were 21 staff working at home, representing almost 10 per cent of the staff. Once the telephony had been resolved, so that people could take customer calls at home, there were plans to accommodate another 15 to 20 people who wanted to work at home. There are 15 mobile staff working on a touchdown basis and 25 staff working at the two processing centres. There are ten occasional home workers, e.g. managers, and 65 per cent of all staff now work compressed hours.
The results of the pilot showed that productivity increased on average by 20 per cent, compared directly to previous work performed in the office. Initially some productivity levels went up by 50 per cent but then settled down and averaged out at 20 per cent. Sickness absence reduced by 50 per cent and remains at that level. Employee turnover dropped from 35 per cent per annum to 8 per cent so the outflow seemed to have been stemmed. The project was sold to Council members and the chief executive on the basis that “for every four home workers the increase in performance is equivalent to one job.”
Realising significant performance improvements
It was calculated that in Revenue Services every 1 per cent reduction in sickness would increase full time equivalents (FTE) by 1.8. Reducing staff turnover by 1 per cent would also result in an increase of 1.8 FTE. The actual results achieved meant the 3 per cent reduction in sickness was equal to 5 FTE and the 27 per cent reduction in turnover was an increase of 48 FTE. That meant a total increase in capacity of 53 FTE, an increase of 29 per cent in the available workforce, which was a major contributor to turning round the performance of the division.
The change in performance of the Revenue Services division over the first three years of flexible working was dramatic. Benefit claims in progress went down 7,800 to 300 and they were only those awaiting information. Every claim is now dealt with on the day that all the information is available and the time to assess new claims has reduced from 103 days down to 26. Face-to-face enquiries dropped from 1,000 per week to 300 and complaints dropped from 56 per month to six.
So flexible working was directly responsible for turning this department from a poor performer to an award-winning success.
In 2002 it won the award for Benefit Team of the Year from its professional body, The Institute of Rating, Revenues and Valuation, and it has recently been awarded the service wide Charter Mark, which is given to public sector organisations in the UK that continuously improve their customer focus.
Flexible working benefits from a personal perspective
The above case study shows the business benefits of flexible working, but equally there are benefits for individuals. Anna Welton, a customer service team leader with Vodafone UK, the mobile phone operator, explains what flexible working means to her: “I started working for Vodafone in January 2002 as a customer service advisor. I then moved roles to customer service coach and then to my current role, team leader. Last year I returned from maternity leave and placed my son in the care of a nursery to enable me to continue my role at Vodafone full time. However, while at nursery my son fell ill and as a result I started taking time off work to look after him, and this in turn meant that I wasn't fulfilling my role at work. I decided I needed to change my working pattern and looked to my line manager at Vodafone to explore my options.
“My manager suggested working in the evening as a team leader again and spending the daytime with my son. I have now been working like this for the past six months and feel that it really suits my lifestyle. I'm thrilled to be working as a team leader once again and feel far happier that I can be there for my son during the day. Vodafone has been supportive and helpful throughout and I really appreciate the company's flexible approach to the changes in my personal circumstances.
“My future plan at Vodafone is to continue developing my team of customer service advisors. I'm so pleased to be back in this role as I enjoy spending time with my team, coaching each member individually and developing them to feel empowered enough to find the right solution for the customer and enjoy making a difference and a contribution to the business.”
Making it happen
The potential benefits of flexible working are high, but achieving them, as with any substantial organisational change, requires the change to be managed. There must be a clear objective aligned to corporate strategic goals, a planned process, properly resourced implementation and a good communications plan. The visible support of senior managers is critical including a willingness to change their own management practices where necessary. It is important to train managers in how to lead a more flexible workforce so they can adapt their leadership style to suit the new environment. The change management process should include adequate provision for piloting the new working practices for a variety of employees and learning how best to introduce it for the rest of the organisation.
Following are the key stages of implementation:
-
Planning:
- identify the needs of the business, people and internal and external customers;
- determine what flexible working options might help achieve these requirements;
- appoint an active, high-level champion;
- form and brief a cross functional project implementation team;
- review what is already happening;
- identify the benefits, advantages and disadvantages, and likely problem areas;
- develop and agree clear goals and objectives – communicate them at all levels;
- agree the measurement and success/failure criteria and monitoring/feedback methods;
- identify what resources are needed and available and act to fill any gaps; and
- produce the project plan and agree who is responsible for delivering it.
-
Develop and prepare for a pilot programme:
- develop and launch an internal communications plan;
- use the plan to manage stakeholders' expectations throughout the programme;
- develop assessment tools and methodologies;
- draft interim policies and procedures;
- run executive briefings – get top level, organisation-wide support and involvement;
- select the area(s) and people where the pilot(s) will be run;
- run management and supervisor briefings;
- run staff orientation sessions;
- brief and train the managers and staff selected for the pilot(s);
- acquire, test and install equipment and services together with appropriate support and management processes and resources; and
- conduct health and safety risk assessments.
-
Run pilots, evaluate success and rollout:
- launch the pilot programme;
- evaluate progress and success at project milestones;
- implement any changes required;
- conduct end of pilot assessments (surveys, workshops, data analysis, etc.);
- report findings and make recommendations to senior level;
- obtain executive agreement to implement flexible working in appropriate areas;
- publish definitive policies, procedures and user guides;
- launch flexible working as a recognised practice in the organisation;
- continue to publicise through an awareness campaign; and
- continue to monitor and evaluate and make any changes when required.
With a successful implementation of flexible working the HR function can take credit for improving the performance of the organisation and contributing to the bottom line of the business. By taking a strategic approach to working practices they can lead this initiative and prove to their colleagues that they are true business partners and gain the respect they rightly deserve but rarely achieve.
References
Equal Opportunities Commission (2007), Enter the Timelords: Transforming Work to Meet the Future, Equal Opportunities Commission, Manchester, .
Ruiz, Y., Walling, A. (2005), "Home-based working using communication technologies", Labour Force Survey, Labour Market Division, Office for National Statistics, London, October, .
About the author
Peter Thomson is Director of the Future Work Forum at Henley Management College, which he founded in 1992. Based on the research carried out by the Forum and by collecting expert views from over 200 speakers at Henley, he has acquired a unique view on the future of work and how it impacts individuals, organisations and the management of people. Prior to setting up the Forum, Thomson was the personnel director for Digital, at the time when the company pioneered teleworking and other working patterns. He is a fellow of the CIPD and a past branch chairman and speaks at many conferences on the future of work and related topics. He is also a director of WiseWork Limited, an organisation specialising in helping businesses to introduce flexible working. Peter Thomson can be contacted at: peter@wisework.co.uk