The business benefits of flexible working

Peter Thomson

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.

Peter Thomson is Director,

Future Work Forum, Henley
Management College,
Henley-on-Thames, UK.

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.
Keywords Flexible working hours, Benefits, Business improvement, Corporate strategy,
United Kingdom
Paper type Research paper

lexible 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
individuals 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

DOI 10.1108/14754390810853129

VOL. 7 NO. 2 2008, pp. 17-22, Q Emerald Group Publishing Limited, ISSN 1475-4398

STRATEGIC HR REVIEW

PAGE 17

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 Commissions (2007) excellent report Enter the
Timelords, as follows:
Change wont 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 someones 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
Governments Project Nomad[1] have catalogued some of the remote working practices and
provided advice to others wanting to follow suit. Working from home has increased in
popularity as the time and stress of commuting has continued to grow, with the number of
teleworkers in the UK doubling from 1997 to 2005 (Ruiz and Walling, 2005). There are also
new forms of contractual arrangement that sometimes get included in the flexible working
definition. Part-time working and shift work have been around for a long time but newer
arrangements such as job sharing and family contracts are starting to emerge. The ultimate
flexible worker could perhaps be the self-employed individual who has total control over
when and where (and even if) they get the work done.

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:
1. Moving from a central urban office to regional satellite offices produced savings of 33 per
cent in accommodation costs.
2. Flexible working arrangements led to a 25 per cent reduction in accommodation costs.
3. Use of regional centres reduced work-related car journeys by 30 per cent.
4. Substantial productivity improvements, often reported at over 25 per cent, resulting from:

PAGE 18 STRATEGIC HR REVIEW VOL. 7 NO. 2 2008

 [. . .] there is now clear evidence that organisations that have

embraced new working patterns have benefited from
increased productivity, lower employee turnover and lower
absenteeism.

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.

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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 wasnt 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. Im 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 companys flexible approach to the changes in
my personal circumstances.
My future plan at Vodafone is to continue developing my team of customer service advisors.
Im 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.

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 There must be a clear objective aligned to corporate strategic

goals, a planned process, properly resourced implementation
and a good communications plan.

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:
1. Planning:
B

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.

2. Develop and prepare for a pilot programme:

B

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.

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3. Run pilots, evaluate success and roll-out:

B

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.

Note
1. Information available at www.projectnomad.org.uk

References
Equal Opportunities Commission (2007), Enter the Timelords: Transforming Work to Meet the Future,
Equal Opportunities Commission, Manchester.
Ruiz, Y. and 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

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