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Flexible working can raise productivity and engagement

Flexible working can raise productivity and engagement
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Peninsula Team, Peninsula Team

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Firms need to consider whether they are offering the right levels of work flexibility in light of latest employment rules

Following news that the Employment Relations (Flexible Working) Act 2023 received Royal Assent and will update the legislation for businesses from summer 2024, now is the time for businesses to consider their flexible working practices, explains John Edwards, chief executive of the Institute of Financial Accountants (IFA)

Reviewing working practices gains further importance when considered alongside the latest findings of a survey of nearly 3,500 members of the Institute of Financial Accountants (IFA).

The IFA asked respondents about the factors affecting their work in the last 12 months. Nearly a third (29.4%) cited a change in personal circumstances, 14.5% a family crisis; while 42% had been affected by personal or family health issues. One in five said mental health challenges had affected their work.

For employers, this marks a continuation of trends seen through the pandemic and indicates a long-term requirement enabling flexible working.

While flexibility is often represented as an employee-focused advantage, adding to the administrative and managerial burden for businesses, the reality is not so stark.

From June to December 2022, 60 major UK employers took part in a government-backed trial of the four-day working week, offering their employees 100% of their original salary for 80% of their original hours, as long as employees committed to 100% maintained productivity.

The results were astonishing, with 18 businesses adopting a four-day week as their new practice, and 56 companies extending their trial of the four-day week with a view to making the move permanent.

The trial incorporated some 2,900 employees, and by its conclusion, the study evaluated that business revenue stayed broadly the same, while sick leave went down by 65% and 71% of employees self-reported lower levels of burnout.

A four-day working week is just one approach to flexible working, with other innovations including compressed hours, annualised hours, home working, self-selection of hours within an extended working day, or in some cases, granting employees total control over their own working hours, including when, where, and how long.

Some businesses even offer unlimited annual leave, with the employee granting assurances for productivity and output and the employer measuring employee capability and setting expectations around advance notice of leave and overlap with colleagues for example.

All of these approaches require commitment to innovation, and a shift in managerial monitoring from time-bound practices, ie, the number of hours per week, to result-based monitoring such as output, quality, client retention, and contribution to turnover for example.

This approach to flexibility does not suit every business, but those that can prioritise innovation and adaptation will reap the rewards.

According to a CIPD survey, 87% of employees now want flexibility, but employers are failing to match up to these needs or expectations, despite the reported advantages.

The same analysis found that workers who are afforded good flexibility are more engaged, happy and productive, generating as much as 43% more revenue and improving performance by as much as 20%.

Practical issues

Practically, businesses need to consider how they can innovate to meet the changing needs of their workforce, without compromising quality of service for clients.

For some, international outsourcing is providing additional resource for day-to-day tasks, enabling in-house teams to focus on quality of service, while for others, call answering services, a client triage team, or office-based rotas can be utilised to meet client expectations while freeing employees to set their own flexible schedule.

What is clear is that solutions are not one-size-fits-all, and businesses will have to consider their own working environment.

Indeed, despite the measurable success in the government-backed trial last year, ministers still issued a warning in October to local councils, discouraging them from trialling or adopting a four-day working week. The government was concerned it would be implemented without practical measures in place to maintain standards, and will therefore deliver poor value for money for local taxpayers.

Rule changes

Legislation is changing in 2024 to give workers more rights to request flexible working and providing greater clarity for employers too.

When the new laws coming to effect, employees will be able to request flexible working options twice per year, and they will have the right to do so from day-one of employment, compared to the current 26-week privilege that is implemented.

Employers must then consider and approve or decline the request within two months, and may only use and evidence one of the following eight statutory reasons if they opt to decline (note that these reasons will remain unchanged from the existing position):

  • the burden of extra costs;
  • their work cannot be reorganised among other staff;
  • additional people cannot be recruited to do the work;
  • flexible working will affect quality;
  • flexible working will impact performance;
  • the business will not be able to meet customer demand;
  • there is a lack of work to do during the proposed working times; and
  • the business is planning changes to the workforce.

Small businesses can gain a competitive edge here, by opting to consider requests more quickly or more frequently, establishing a reputation for being a people-first employer.

Alongside the changes announced to the Employment Relations (Flexible Working) Act 2023, a new Statutory Code of Practice on Flexible Working is being introduced by Acas, replacing the 2014 Code.

With the post-pandemic shift in flexible working and attitudes towards more people working this way, the previous Code was no longer relevant in today’s workplace.

It is clear that the pressures of modern life, are driving workplace challenges, and businesses need to be able to adapt to support their employees.

Many will opt to remain focused on the historical approaches for employment, but in doing so will lose their competitive edge at a time of industry skills shortages, while also failing to capitalise on the obvious advantages to a more flexible approach. Will you be reviewing your flexible working strategy?

For information on flexible working, visit BrAInbox today for instant answers to questions like Can an employee make more than one flexible working request per year?

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