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The benefits and risks of flexible working

At a glance

  • With evolving working practices and employees desiring a better work-life balance, various types of flexible working are on the increase – but businesses need to strike the right balance
  • Poor adoption of flexible working by businesses can lead to increased risk around employment practices and a weakening of management controls
  • There are significant benefits including greater efficiencies and a more motivated workforce

Working ‘nine-to-five’ is still the dominant working model across the UK; however, many employers are now embracing various new models of operating that allow employees to be more flexible with their working hours to enable a better work-life balance.

For businesses operating with a higher degree of flexibility, the benefits can include a more efficient and productive organisation, a more empowered and motivated workforce, increased staff retention, reduced levels of absenteeism, and also better customer service.

“Flexible working should be viewed as a positive development in our modern businesses life,” says Russell Corbould-Warren, Zurich’s Head of SME Underwriting.

“There are, however, challenges with implementing a flexible hours model and these are largely based around a reduction in consistent control for an employer, the potential for inequitable employment terms and an actual perceived worsening in work-life balance/expectations from some employees.

Types of flexible working

  • Part-time working
  • Flexi-time – scope to change work hours outside of ‘core’ business periods
  • Job-sharing
  • Working from home or remotely
  • Compressed hours – for example, fitting a five-day week into four days
  • Term-time working – paid or unpaid leave during school holidays
  • Annual hours

“And if employers focus on the open-endedness of flexible hours, some employees will see their business as trying to exploit them and make them work longer hours, whether they want to or not.

“The true intention is to flex around employees’ lives – allowing workers to drop kids off at schools, for instance – and there is a clear responsibility to make sure employers consider the health and wellbeing of their employees, but this is an incredibly difficult balance to keep.”

All employees in the UK, whether a parent of a child under the age of 16 or not, now have a legal right to request flexible hours and businesses have a legal obligation to provide a valid reason if they cannot say yes.

“From an insurance point of view, flexible working hours alone will probably not lead to an increase in employers’ liability claims, however brokers should discuss the potential for an increase in legal costs with their clients who are making this change,” adds Russell.

If flexible hours leads to a perceived inequitable treatment of staff – if Person A is allowed to shorten their contract, say, but Person B sitting next to them in a different team cannot – this can lead to more disputes, tribunals, and potentially more unfair dismissal cases.

“Having different people on different work patterns and on different shifts can also be a real challenge for businesses to keep up with their mandatory training regimes – like health and safety courses – and to maintain their team ethos, values and business culture,” says Russell.

“An employer must therefore be transparent when making these decisions and have good business reasons and a rational and logical argument for allowing or rejecting such requests. Although, at the end of the day, businesses still need to run and that is why they are allowed to say no.”

The older generation of workers can also view flexible working slightly differently to younger employees and this, too, can create problems.

Flexible working should be viewed as a positive development in our modern businesses life. There are, however, challenges with implementing a flexible hours model and these are largely based around a reduction in consistent control for an employer, the potential for inequitable employment terms and an actual perceived worsening in work-life balance/expectations from some employees

Russell Corbould-Warren, Zurich’s Head of SME Underwriting

“People in their 20s, 30s and early 40s are more open to the fact that there is a blurring of work and personal life as long as there is a balance that is appropriate,” says Russell.

Changing working practices

Paradoxically, the internet and growth of the digital economy is driving this flexible working culture. Traditional industries such as manufacturing have long operated on 24-hour working rotas but the tertiary sector is now adapting these practices.

Zurich’s SME & Risk in 2020 report came to the conclusion that the UK may even see a return to the shift-work patterns of previous decades.

“There is a developing need to respond to customers out of normal nine-to-five hours,” says Russell. “The ‘I want it now’ generation, where people buy goods online and demand a next day delivery as well as an instant response to a problem, has created an expectation that someone will be on hand at 8pm, say, to answer any queries a customer may have.”

Brokers could discuss this emerging opportunity with their clients and provide some general guidance around risks with implementing the flexible working practices and relevant insurance products that can assist with managing those risks.

“The needs and expectations of modern businesses and employees are changing and those SMEs who successfully implement more flexible working practices will attract new talent and reap significant benefits,” adds Russell.

Image © Getty

For more information, get in touch

Steven Taylorson | SME Underwriting Manager | 0207 648 3900

Leave a comment

Melody Slinn

November 26th, 2014 at 4:00pm

Additional benefits to letting staff work more flexibly, particularly letting them work remotely, are of great benefit to the wider community and environment as well as saving the company from a financial point of view. Commuting costs the employer. Employees have to earn a salary that will pay commuting costs, additional childcare costs. Having a 1:1 desk policy means that you are having to retain a fixed overhead that is inefficient financially. And then there's the cost to the environment of people having to commute. Local economies can benefit hugely by having staff working nearer home with them spending locally rather than where they work. And last but not least from an HR perspective it lets you recruit and retain talent and have greater access to a wider, more diverse pool of people. All in all flexible working - from all perspectives - makes your staff happier - why do more employers not embrace it?