What Are the Financial Implications For A Firm Which Is Considering Offering Flexible Working Practices to Its Staff?

The directive covering flexible working were published in 2002 and were intended to persuade employers to initiate flexible working options for their workers. It is important to understand that the provision of these options was not compulsory under the directive. An employer is required to “seriously consider” offering flexible working to workers in specificcases where the employees have responsibilities to care for children under 16, disabled children under 18 or some adult dependents. “Seriously consider” is as rigorous as the regulations get regarding a company’s obligations, and that is just for the specific cases, many of whom would be asking for permission to Work From Home. Even in these specific cases the person must submit a formal application to thefirm as there is no automatic right to flexible working. For the remaining workforce the offer of flexible working is completely at the firm’s discretion.

So, what has been the response of employers to the directive? There is a long-held belief within the business community that any kind of law, rule, regulation or directive from the Government causes increased costs to employers. As the flexible working regulations were not compulsory it was up to individual employers to determine their own position and consider whether they could different kinds of flexible working without suffering any costs. Let us take a short look at the different types of flexible working, the cost implications of each and whether there are any benefits to be gained from offering them.

Many of the options involve varying the number and times of the hours to be worked. Part-time working is by far the most used option and has no extra costs connected to it. There are many operational benefits for employers using part-time workers and a cost benefit in only having to pay for the time worked. Installing “flexitime” will involve spending money on a computerised recording system to manageeach worker’s attendance. There will be some cost savings as any lateness and doctor or dentist appointments will be in the worker’s own time. Furthermore, the appeal of flexitime can help to retain experienced workers and reduce recruitment costs. Job-sharing is also an attractive proposition to thousands of members of staff and generates minimal additional costs to the firm. Again, there are operational benefits and experienced staff can be retained in the firm when they wish or need to work fewer hours. There are other variations which often occur in some industries with seasonal trading patterns or opening times. Annualised hours is self explanatory and will entail workers working extended hours at peak trading times of the year with longer holiday periods or shorter working weeks in the ‘off season’. An ideal example is term-time working which is widespread in the education sector.

Where there is often a cost implication for employers is when workers are allowed to Work From Home.
A newly formed Internet Business with the very latest communication technology will probably have planned to operate with Online Jobs from its launch as the cost of the technology can be balanced by a proportionate reduction in the need for office space when workers Work From Home. However, a firm that is firmly established would need to invest in the technology required to permit workers to Work From Home but could possibly take a first step towards becoming an Internet Business. The first task would be to identify any tasks within the firm that could be converted to Online Jobs and then estimate the costs involved. It is unlikely that savings could be made in reduced office space unless flexible working formed part of a company restructuring and subsequent relocation. However, if important workers were retained by permitting them to Work From Home then recruitment and training costs for new staff would be saved.