Flexible working: Let flexibility be your friend and reap the benefits in cost savings

More than 14 million people in the UK work flexibly – a clear indication that employers understand the need to achieve the right work-life balance. But flexible working provides much more than that. Happy staff mean loyal staff, and in today’s economic climate that’s perhaps more important than ever.

The level of support that the government’s decision to extend the right to request flexible working has received is encouraging. The extension, recommended in the Walsh Report in May 2008, will allow people with parental responsibility for children aged 16 and under to request flexible working. This extends the right to about 4.5 million more workers.

The new regulations provide people with the right to request flexibility, not the right to demand it. If companies have a justified business case for not allowing staff to work compressed hours or part-time for example, then they have every right to refuse them. The regulations are there to improve conditions for both parties.

At present, almost 40% of public, administrative, education and health workers work flexibly, which includes working from home, part-time and staggered hours. This is closely followed by employees from manufacturing, catering, services industries and the financial sector.

These companies recognise that the cost of recruiting and training new staff far exceeds the price of retaining existing staff, which can amount to an average of £4,000 per employee.

Some companies have also benefited from reduced buildings costs – rent, electricity and IT support – by cutting down on the hours employees are in the office. BT for example, estimates total savings on property costs of £450m a year through its homeworking initiative. The telecoms giant currently contracts about 10,000 people to work from home.

Over the past months, the government has consulted with businesses to determine what steps we should take when the new regulations come into effect in April.

We had proposed to remove the need for employers to agree to a request for flexible working in writing, with the aim of reducing a layer of regulatory burden on businesses. But three-quarters of respondents to the consultation (including employers), told us they preferred the current system, which ensures they have a full record of the activities of their staff.

Moreover, the cost savings of removing this requirement were deemed minimal and would be outweighed by the risk of confusion or unrealistic expectations where there was no record of what had been agreed.

Our job now is to assist employers in implementing the new arrangements. The government is running a publicity campaign targeting both individuals and businesses to use the Business Link and Direct.gov websites. Both sites will have information and toolkits on the implementation and impact of the new rules.

With consumer demand dropping significantly in many sectors, flexible working is playing quite a different role in today’s recession. Manufacturers in particular, have adopted part-time hours and extended sabbaticals in order to retain staff rather than laying them off.

By cutting down on hours and costs, businesses can at least ensure their staff are being paid something and that they are in place once the market does pick up again.

There are some really good examples of companies that have taken on flexible working to adapt to the economic climate. Take Leeds-based recruitment company Equals One, where employees voluntarily chose to job share rather than face forced redundancy. Its staff recognised the need to adapt to market change, while at the same time protecting as many jobs as possible.

In today’s recession, flexible working practices are likely to become more widespread as companies look for alternative ways to cut costs. But when the economy picks up, I hope that businesses will continue to offer their staff the same flexibility. For me, flexible working makes good business sense.

Pat McFadden, employment minister, Department for Business

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