Flexible working: how British companies are coping

This article by Andrew Bibby, in a slightly different form, was first published in Financial Times, 2004

What was all the fuss about? The government's legislation giving employees with young children new flexible working rights came into effect in April 2003, and the message from most sources seems to be that, by and large, business has taken these new obligations in its stride.

The DTI's first survey into the take-up of the ‘right to request' flexible working (available to parents who have children under 6, or disabled children under 18) was published in April 2004, and it offers an upbeat assessment of the success of the legislation. Employers are not obliged to automatically grant employees' requests to work flexibly, but they are, however, now required to consider such requests seriously. The DTI found, in fact, that only 11% of requests made since April last year were turned down. Of the remainder, most were fully accepted, with 9% being agreed after mutual compromise.

“Positive responses from employers have been matched by positive employee responses,” says Mike Emmott, employee relations advisor at the Chartered Institute of Personnel and Development. He argues that the balance in the legislation (which is strong on persuasion but relatively light on sanctions against employers) was got right. “Employers would have been much more hostile if every disputed issue ended up at a tribunal – and I think tribunals would have been overwhelmed,” he says. He adds that many employers are now taking the opportunity to extend the right to request flexible working to other employees not covered by the legislation, a development favoured by the CIPD.

The CIPD itself has surveyed the take-up of flexible working rights, in a joint survey with Lovells published last Autumn. Like the DTI report, this appears to suggest that employers are coping well. 90% of the 510 companies investigated reported no significant problems with the new requirements, and 76% said that the effect of the legislation has been negligible.

But Working Families, the charity which works with both employers and employees to promote flexible working, is not yet convinced that everything is quite as rosy as it appears. Sarah Jackson, Working Families' chief executive, says that her organisation's more sceptical view is partly the result of operating a helpline for parents, which brings to light the practical problems they can be facing. “Our impression is that quite a lot of companies are turning down requests for flexible working informally, before the requests get to the formal stage. People, especially those in low income, low status jobs, can be put off very easily,” she says. These cases would not show up in the official statistics.

She also points the finger at medium-sized companies, as representing the business sector which may be having most difficulty in coming to terms with flexible working. Large companies generally have the HR resources and experience to cope, she says, whilst very small firms often have the flexibility to be accommodating to individual workers. “It's the middle ground where people can be more old-fashioned,” she claims.

Certainly, Working Families' own research suggests that some companies are suffering from a lack of adequate HR expertise and advice. The flexible working legislation offers companies eight legal grounds on which to turn down an employee's request – in practice, ample scope for almost every conceivable circumstance. Despite this, Working Families found that, in half the cases it examined, employers were giving reasons for refusal which were not permitted under the law. In one case, for instance, a firm claimed that it was only prepared to operate a 5% quota for part-time staff. Another company turned down a request for compressed hours working on the grounds that it was ‘unhealthy'. “Some companies don't know their way around employment legislation,” Sarah Jackson says.

She goes on to say that a more substantive challenge for some companies to overcome can be line managers' traditional perceptions of their role. “People can be very comfortable managing 9-5, Monday-Friday employees. To say to them instead ‘You have to think about outputs', that's a big shift to ask managers to make,” she says.

As Sarah Jackson implies, the development of flexible working offers companies the opportunity to address more fundamental management changes, moving away from conventional command and control supervisory styles. In practice, different companies are adopting different procedures for dealing with flexible working requests. Whilst some medium-sized firms currently involve senior management in the issue many others allow the decision to be taken at line management level.

Sarah Jackson argues for a more strategic approach, claiming that companies should be won over by the benefits they themselves can gain through supporting flexible working. “The business case arguments are very strong. It's about better recruitment and retention, and also about having a content and productive workforce,” she says.

Her view of the business advantages is partially echoed by Mark Crail, managing editor of the specialist IRS Employment Review, which recently undertook an in-depth study of employers' experience of flexible working requests. He also sees some potential benefits in terms of staff retention, though he adds that this applies only where companies are also competitive in terms of the other conditions they offer. He also suggests that an enlightened approach to flexible working may help improve absence management.

The difficulty at the moment, however, is that the hard data which could demonstrate the business case for flexible working simply does not yet exist. As a consequence, business opinion remains divided. When the CIPD asked the 510 companies it surveyed whether the new employment rights had led to business benefits, 32% replied positively, 34% replied in the negative, whilst another 34% admitted that they didn't know. It's clearly early days yet: the full benefits - and the problems too - for business of the flexible working legislation may only become more apparent in a few more years' time.