What we know – and what we don’t – about flexible working and productivity

February 27, 2020

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by Emma Stewart, CEO, Timewise

  • In January, the Carnegie UK Trust and the RSA published Can Good Work Solve the Productivity Puzzle? essays featuring new research, opinion and analysis by representatives from almost 20 organisations from policy, business, trade unions and civil society. The collection sets out how a focus on good work can be encouraged to improve wellbeing by boosting good jobs and helping solve the UK’s long-standing productivity puzzle.
  • The week that Timewise publish their annual updated ‘Power’ list celebrating the people and places who make a success of flexible working, this blog explores the emerging evidence on flexible working and productivity, and how we can encourage job design innovation to unleash the productivity and wellbeing benefits of flexible working.  

In the fifteen years since the Timewise team began focusing on flexible working, there’s been a huge evolution in both its perceived value and the attention it has received. Once a hushed-up perk for a small number of maternity returners, with few champions, flexible working is now a core ingredient of workplace strategy. Indeed, it was a central pillar of the recommendations of Matthew Taylor’s landmark Review of Modern Working Practices.

The review spearheaded a growing understanding into the social and economic value of Good Work; that is, work that benefits individuals and society as much as businesses. And Taylor was clear about the role that flexible working has to play in making work good:

“The Review believes that genuine flexibility, whereby individuals and employers are able to agree terms and conditions that suit them both… is both the key strength of the UK labour market, and also a core component of fair and decent work. As a society, we should be bolder in designing flexible jobs that allow people to remain and progress in the labour market as their circumstances change.”

Today, then, flexible working is a strategic goal for forward-looking organisations, and a legitimate aspiration for employees (and not just those with children).  And when you look at the business case, and the impact of working flexibly on employee well-being and engagement, it’s easy to see why.

The positive impact of two-way flexibility

Genuine, two-way flexible working, which delivers for employers and employees alike, has been shown to boost talent attraction and retention. It helps drive inclusion and diversity, and supports the progression to senior level of key groups, including women. And having less people in the office at the same time can lead to savings on office space and other business overheads.

Flexible working also delivers better work-life balance, with the knock-on effect of supporting mental and physical health and improving well-being. Government figures have shown that in 2017-18, 57% of all sick days were due to work-related stress, anxiety or depression; tackling these through more better flexible working is clearly good for everyone involved.

The link between flexible working and productivity

So what about productivity? Does the ability to work flexibly make you more productive?

There are some figures to suggest that this is the case. A 2014 survey by BT found that the productivity of flexible workers increased by 30%.  Similarly, a YouGov survey from 2015 suggested that 30% of office workers felt their productivity increased when they worked remotely. And in a study of flexible workers undertaken by Cranfield University[1], over 90% of managers said the quantity and quality of work improved or stayed the same.

Additionally, it is simple common sense to assume that, if you’re working fewer days a week, you are likely to be more engaged on those days. That if your job fits well with your life, you’re likely to bring more energy to it. That working from home, with fewer interruptions, can increase your output. And that if you hang on to experienced team members, who know what they’re doing, your team as a whole will deliver more, better, and more efficiently.

Rising interest in the four-day working week

Certainly, these assumptions have contributed to increased interest in the concept of the four-day working week. In the last year, there has been a swathe of articles about companies who have switched their employees onto this pattern, without any dip in productivity or loss of pay. A key early example of this, Perpetual Guardian in New Zealand, ran a pilot which they say revealed a 20% increase in productivity. And a number of companies in the UK have followed suit.

Why this solution is more complex than it seems

Does this mean we can all just move to a four-day week for the same money and watch our productivity soar? If only it were that easy.

As I’ve explained in detail elsewhere, introducing a four-day working week isn’t just a schedule tweak. Most of the examples we’re hearing about are coming from one end of the employment market – office-based roles within knowledge and creative industries, such as PR. In frontline and shift based sectors it is far more complicated to introduce – or only possible to do so at a prohibitively high cost to the business. And when talent isn’t seen as a high commodity the business case for investment is hard to make.

Furthermore, in a shift-based environment, the concept of a four-day working week doesn’t really fly, as employees aren’t working a standard five-day week. What most of them really want is more control and predictability over when and how much they work, to achieve what we at Timewise term ‘shift-life balance’. And with over five million people working in permanent shift-based roles, it’s imperative that we explore how we can achieve this, for the benefit of workers and the economy.

Indeed, as Lord Skidelsky noted in his Labour Party-commissioned report exploring the feasibility of legislation to limit hours of work “Capping working hours nationwide… is not realistic or even desirable, because any cap needs to be adapted to the needs of different sectors.”

So if the four-day week isn’t the answer to increasing productivity on a large scale, what is? I’d argue that there are two big steps we need to take to tackle this issue in a robust, sustainable way:

    1. More investment into designing jobs that deliver two-way flexibility

If we agree in principle that two-way flexibility supports productivity, we need to make it more widespread. That involves understanding what kinds of flexibility are most appropriate for each role or sector, changing workplace cultures to support different working patterns, and increasing management capability to deliver them.

As with the four-day working week, this is more straightforward in office-based knowledge and creative sectors than it is in shift or service based ones in sectors such as health and social care, retail, hospitality, construction and teaching. These are industries that face complex operational as well as cultural constraints to making two-way flexibility work. But they are industries that employ millions of frontline workers who service our economy. Some of whom need more control and security over their working patterns, and others more opportunities to progress into better paid part time work to fit with caring or health reasons.

We need to test and catalyse new approaches to designing two- way flexibility in these sectors, particularly as many are struggling with skills shortages. But we face both a capability and a capacity gap in understanding how to redesign work, rather than invest in another skills training programme as a way to maximise performance. To drive change we will need government-level investment. We invest in technical innovation to support economic growth in this country; it’s time we invested in job design innovation too.

    2. Proper research into the impact of flexible working on productivity

Once we have more models of flexible working in place, across a wider range of different sectors and role types, we will be in a far better position to research the link between flexible working and productivity. The figures I have quoted above are not sufficiently up to date or wide-ranging; we need to do more to prove the link, particularly at a sectoral level.

By doing so, we’ll create a virtuous circle in which more organisations are prepared to move to a more flexible approach, which will boost their productivity, which will in turn encourage others to follow their lead.

We’re tackling flexible working R&D – but we need more support

At Timewise, we’re already on this journey. We have led a number of research projects exploring innovative flexible options, in complex sectors such as social care, nursing, teaching and retail. Right now, we’re piloting flexible working in the construction industry, and investigating the role that flexibility can play in supporting older workers, through the work of our Innovation Unit.

But we are just one organisation; and although we are supported in this work by a number of like-minded partners, there’s a limit to what we can achieve. To really drive change at scale, we need more social partnerships between business sector bodies and agents for change, backed by government and industry investment.

If we really want to take productivity to the next level, whilst delivering a happier, healthier workforce, that’s the first step. And we need to start now.

 

~Notes~

  • This piece originally appeared in the Can Good Work Solve the Productivity Puzzle essay collection. It does not reflect the view of the Carnegie UK Trust, only the view of the author.
  • The Carnegie UK Trust has been active for many years in the push to look beyond purely economic indicators to measure and value social progress. We advocate the use of wellbeing frameworks, which measure the success of society not only in terms of its material wealth but also extend to, for example, indicators on quality of work, health, the environment and our sense of security and cohesion. Solving the productivity puzzle, and unlocking the benefits in living standards this can help deliver, must be addressed within this wider need to rebalance the measures through which we understand and assess our progress.

 

[1] Cranfield University/Working Families 2008: “Flexible Working and Performance”