Refusals to accommodate flexible working requests are costing businesses almost £2bn a year, one of the first reports to quantify the economic benefits of flexible work has revealed.
Flexonomics, commissioned by construction giant Sir Robert McAlpine and flexible working campaigner Mother Pukka, found that flexible working annually contributed £37bn to the UK economy. It forecast that a 50% increase in flexible working could result in a net economic gain of £55bn for the entire economy, while creating 51,200 new jobs.
The study defined flexibility as any way of working that suits an employee’s needs – it did not simply entail working at home. It revealed how even hard-to-flex sectors like construction could embrace the working model whether it be through self-rostering or mutually agreed shift swaps.
The high cost of refusing to accommodate flexible working requests was the result of employers not appreciating how flexible working boosted productivity and employee morale. Employers who refuse to allow it also did not realise that flexible working was linked with far lower employee absences. These errors were costing business almost £2bn a year, Flexonomics concluded.
Flexible working, the report said, was about far more than simply working at home. It could be introduced in:
- Working patterns – this can consist of anything from part-time working through to annualised hours, flexitime, compressed hours or self-rostering.
- Workload – this includes reduced hours, job sharing, zero-hour contracts, phased retirement and commissioned outcomes.
- Workplace – offering employees the choice to work from the office, at home or both (hybrid working).
- Life events – broadly consisting of career breaks or shared parental leave.
The report highlights how even the traditionally “hard-to-flex sectors” can embrace flexibility. Construction workers, it argued, could take advantage of self-rostering while those working in healthcare could swap mutually agreed predictable hours.
Ahead of the publication of the government’s consultation into flexible working (which ends on 1 December 2021), the report called for more clarity in job adverts. The authors said that although the government was consulting on proposals for a day one right to request flexibility, this still required new recruits to either know if such options are available and to have the confidence to ask. If all people who could apply were informed in advance, the pool of candidates for any given job within a business would be broadened.
The study urged the government to be more proactive about communicating to businesses the benefits of flexible working. It should explore making the working arrangement as default for the civil service and publish a list of flexible working employers.
Paul Hamer, chief executive of Sir Robert McAlpine, said there were myths about flexible working that needed puncturing. “The misconception that flexible working is only applicable to a select few sectors needs to change. Flexible working can refer to working patterns, workload or time spent in the workplace, and this report, one of the first of its kind, demonstrates the glaring benefit to the UK economy if adopted more widely.”
For Anna Whitehouse, founder Mother Pukka and Flex Appeal, flexible working “has never been about location, it’s always been about inclusion.
“It’s about including talent. Talent with caring responsibilities, talent living with disabilities. People who are looking to work in a human – or even humane – way that’s ultimately good for business. For the last six years, Flex Appeal has been lobbying the government, campaigning on the streets of London, Manchester, Cardiff, Bristol and Edinburgh. And now we can prove that it’s good for business.”
The research, published by Pragmatix Advisory, was based on ONS figures and focused on the business impacts of flexible working alone, which included implementation costs, reduced absence, lower staff turnover, increased productivity, the contribution of lower wage inflation over time to business profits, and the cost of replacing staff.
It is possible that the benefits of flexible working are even more pronounced than the authors contend because the modelling did not account for a reduction in government spend on benefits due to flexible working options, or the number of potential new employees joining the workforce due to increased availability of flexible working arrangements and the tax and National Insurance contributions of these new workers.