Is flexible working the future?

“Almost one in five UK workers say they are likely to change jobs in the next 12 months as they seek better pay and job satisfaction.” – PricewaterhouseCooper

Job vacancies outpace unemployment

The Office of National Statistics states there are more job vacancies than unemployed people in the UK for the first time since records began.

The unemployment rate fell to 3.7% between January and March, its lowest for almost 50 years, as job vacancies rose to a new high of 1.3 million.

However, wages which rose by 4.2%, excluding bonuses, failed to keep pace with rising prices, a problem expected to intensify because of growing food and fuel costs.

The figures show “a mixed picture” said the Office for National Statistics.

• Despite employment continuing to rise, today’s figures underline the challenges facing workers who are seeing inflation eat away at their living standards.
• The data showed that there was a rise in the number of people moving from economic inactivity – classed as those aged 16-64 who haven’t been working or seeking a job – into employment.
• At the same time, people moving from job-to-job also reached a record high driven by resignations rather than dismissals.
• Total employment, while up on the quarter, remains below its pre-pandemic level.

An employee’s market

Demand is outstripping supply so that means potential employees can be choosey and employers need to up their game in attracting new staff or keeping existing staff.

A survey of more than 2,000 UK workers from a range of industries carried out by accounting giant PwC said workers were starting to “assert their power” at a time when many bosses are struggling to recruit. Key findings are:

• It found younger and highly skilled workers were most likely to be unhappy in their jobs or seeking a raise.
• Overall, Gen Z (those aged 24 and under) and Millennial workers (25 to 40-year-olds) were most likely to be seeking new jobs, raises or promotions
• Those in management positions were found to be more content with their current jobs than those in non-management roles.
• Demand for better pay was highest in sectors such as technology and lowest in the public sector.
• 18% said they were “very likely” to switch to a new employer within the next 12 months
• 32% also said they were moderately or slightly likely to switch
• 16% were planning to leave the workforce temporarily or permanently
• 60% also said they would prefer to work fully or mostly from home.
• The main motivators for changing jobs were
• An increase in pay (72%)
• Wanting a more fulfilling job (68%)
• “Truly be themselves at work” (63%)- a company culture that suited them.

Being an attractive employer

“The economic outlook may be uncertain but highly skilled workers are in hot demand and employers can’t be complacent,” said PwC boss Kevin Ellis.

“Employees will vote with their feet if their expectations on company culture, reward, flexibility and learning are not being largely met.”

Many workers changed jobs or left the workforce during the pandemic in what economists dubbed the “Great Resignation”, and PwC said the trend showed no sign of slowing.

Employers may be aware of the staff shortages but in an employee’s, market is your employee package really attractive?

We are seeing many job adverts which talk about hybrid working patterns (office & home) and flexible working practices.

Do you offer these arrangements which are becoming more standard than exceptions? Let’s take a look at the main types of flexible working that employers offer.

Different types of flexible working

Put simply, flexible working is about giving employees more choice over how long, where, when, and at what times they work.

Part-time hours

This is pretty self-explanatory as well as being a common type of flexible working. It’s simply, someone works less than full time hours, either by working less hours in a day, or less days in a week.

Working from home or remotely Something many employers had to get to grips with quickly during the pandemic: this is working somewhere other than the workplace.

Annualised hours

Employees commit to a set number of hours over the course of a year but have flexibility over when they work. They might have ‘core’ hours in a week they must work, but the rest can be worked as and when they choose to, or when there’s increased workload.

Compressed hours

Employers allow their staff to work the same contracted hours over fewer days. For instance, an
employee works 37.5 hours over four days (not five).

Flexitime

This gives employees the choice over what times they start and finish work. As an example, an employer may want their staff in work between 10am and 4pm each day but allow them flexibility at the start and the end of the day, instead of enforcing a rigid 9 to 5.

Job sharing

This is where two people split one full-time job between them. E.g., one person might do three days a week, and the other does two days a week.

NB – we acknowledge that this approach is not possible for all jobs ie retail, hospitality, engineering, etc.

Pros and cons of flexible working

If you’re considering flexible working arrangements in your organisation, it’s important to know the good, the bad, and the ugly truths:

The Good

The main benefits that flexible working practices can bring to employers.

Productivity

It should come as no surprise that by empowering employees with choices over where they work, at what times and for how long, will boost their motivation and results for company productivity.

• According to CIPD (and based upon findings from HSBC),
  81% of those who have access to remote working believe it increases their productivity. What’s more, if employers can offer homeworking arrangements, the time employees would have spent commuting might be spent doing a bit of extra work in order that they can finish early or doing the school run.

Retention

• 51% of employees say job flexibility is more important to them than salary when making job choices.

Want to keep hold of your staff? It’s about flexible working options – and that might be the case for more than half of your workforce!

Employee engagement is driven (in part) by the quality of relationships that employees experience at work.
And trust is the foundation of any relationship.

By giving employees choices over certain aspects of their working day, you’re giving them your trust. And trust drives loyalty.

Wellbeing

• 39% of employees have seen an improvement in their mental health due to flexible working.

With mental health seeing a worrying decline in the last few years, this is something employers should take very seriously.

Further, employers have a ‘duty of care’ to their employees. This means they have a legal obligation to do all they reasonably can to support health, safety, and wellbeing.

This is an important consideration for organisations that are striving to achieve best practice.

Recruitment

Offering flexible working arrangements will widen your talent pool. Think about primary carers who have plenty to offer an employer but can’t start at 9am due to childcare commitments. The provision of flexitime could open the doors to a raft of talent.

On this basis there’s also good reason to believe that increasing flexible working opportunities could reduce the gender pay gap.

The Bad

Potential cons of flexible working

Payroll

The headache it can give your payroll team. Employees working compressed hours or doing flexitime can be treated the same as full-time employees i.e., their pay stays the same, as does their holiday entitlement. So that’s nice and easy.

However, where employers allow employees to work different/fewer hours, this is going to change things for payroll. For part-time workers, it’s fairly straightforward as the hours are fixed each week /month.

But for workers who work annualised hours things get more complicated. Will employees be paid in equal instalments throughout the year? Or only for hours worked during the pay period? When can employees on annualised hours take holidays.

Recruitment

Another potential issue with this more flexible approach concerns employees who can work anywhere, any time. If we shift to this way of working, then surely it doesn’t matter where an employee lives. But what does this mean for the job security of UK employees? Will their jobs be taken by offshore workers?

The Ugly

This approach is not possible for all job roles, all companies or all sectors particularly customer facing services such i.e. retail, and hospitality and for factory based production such as engineering and manufacturing.

Employee resentment and dissatisfaction may occur if they are not able to take advantage of this flexibility for legitimate business reasons such as additional costs, staff capacity issues or a detrimental effect on the business performance.

Conclusion

By 2025, millennials will make up 75% of the workforce. Making up such a large proportion of the workforce, we must ask, what does this millennial workforce expect from their jobs, careers, and work-life balance?

We work with many businesses large and small across a range of strategic and operational issues, so If you would like support or advice about how to introduce more flexible working within your organisation then contact us for a discussion at enquiries@cdialliance.co.uk