The often overlooked cost benefits of flexible employment
Tuesday, August 14, 2018/
Flexible working has long been seen as a solid strategy for promoting the participation of women in the corporate sector.
The basic thinking goes that if you end — or at least relax — the strict start and finishing times of the standard working day, while offering options for staff to take time out for personal reasons, then you’ll see more women with caring responsibilities able to pursue and take up roles within these organisations.
And the modern version of this thinking is that if you can get more men working flexibly, then you’ll ‘normalise’ this behaviour beyond it being an option for working mothers alone. That means everyone benefits from flexible work options and those same mothers are not penalised for using it.
Of course, all the benefits of flexible working extend well beyond boosting women’s workforce participation figures. It offers more options for employees to manage their health and wellbeing. It enables employees to mix up how they commute to work, and potentially avoid wasting time and energy sitting in peak-hour traffic. It can improve labour productivity, as well as employee retention and staff loyalty.
And then there’s the really big benefit for large organisations: the ability to save on direct, clear costs.
Those cost savings may come through things like productivity improvements and savings on recruitment costs — but they’re not so easy to measure or clear to predict. It’s much easier to measure more direct cost savings, such as the money a corporate will save on real estate costs, should companies be able to move beyond the necessity of having every employee sitting at a desk, from Monday to Friday.
This was a point that Lisa Annese, CEO of the Diversity Council of Australia, recently shared with Georgie Dent and I on the Women’s Agenda podcast.
She said she can see a trend in organisations moving towards flexible working for business reasons, because they are trying to reduce property costs, or they are trying to meet the staffing demands of working in a global marketplace.
On the property costs savings, we’ve seen this with some large organisations significantly reducing their property footprints in expensive real estate markets like Sydney and Melbourne in recent years. They’ve moved away from separate offices, to open floor spaces and in many cases to hot-desking environments — where there may not always be enough desks for the entire workforce. Staff are expected to spend some time out of the office, to work from home, and potentially to arrive at different points in the day.
But Lisa warns this isn’t always a great outcome for working parents, who might be arriving after 9am. She warns that it may see them crowded out of getting what are perceived to be the ‘good desks’. She also warns against companies using flexible working as a means to further casualise the workforce.
The real goal is to see the normalisation of flexibility as a concept in corporate Australia to make the giant leap to the normalisation of flexible careers. The goal is for it to become standard practice to progress and excel in your career while working flexibly, rather than seeing the stint that you’re working flexibly or part-time as a holding period on your personal progress.
I believe more focus on the cost savings for employers would help. This is where we move into promoting the ‘smart business benefits’ rather than declaring it’s the ‘right thing to do’ in order to attract a more diverse workforce.
There’s a great case study on the Victorian Department of Environment, Land, Water and Planning. Recent research by consulting firm Nous found that the department has saved $31 million a year following its efforts to improve workplace flexibility.
The study found much of the cost savings came through productivity, with employees declaring that they were able to “work smarter and better” due to being able to work from home or part-time. It also saw benefits in being able to recruit from a wider pool of candidates, reduce absenteeism and improve overall staff retention.
It’s also interesting to explore the benefits that New Zealand company Perpetual Guardian found when it undertook a firm-wide trial of all employees working four days a week, while still getting paid for five. As I wrote recently, CEO Andrew Barnes invited researchers in to measure the outcomes, particularly as he wanted to ensure the trial wouldn’t further over-burden of over-stress staff. The researchers found no drop in productivity, despite staff all technically working 20% less hours. They did see an increase in staff satisfaction and engagement, along with a desire to keep working with the company longer. Stress levels were found to be lower following the trial, while an employee’s perception of their work life balance had improved.
These costs benefits are things that are not always measured, and therefore difficult to notice immediately — unlike savings on property costs, which can be clear from the outset.
In order to mainstream flexible careers, we need companies to see the real and clear cost benefits on everything from improved productivity, to reduced stress levels, to higher staff retention, and to the best benefit of all: the ability to access a much wider candidate pool.
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