Flexible working arrangements and the SME impact

As more workers seek flexible working arrangements (FWA) in a bid to strike a better work/life balance, SME owners are asking themselves if it’s a good and permanent fit for them and their business.

‘All employees have the right to ask their employer for permanent or long-term changes to their working arrangements,’ explains Community Law NZ. ‘This can be about when they do their work (which days or hours) or where they do their work (for example, working from home), or both. 

‘Your employer has to follow a set process when they respond to your request, including replying in writing within a set time.’

There are eight accepted FWA types, including telecommuting, remote work and job sharing, and it’s within these broader frames that you’ll find what most of us assume to be a FWA – 10-hour four-day weeks, early-finish-Fridays, home working, and suchlike.

FWA is not new

Technology and Covid has obviously had a huge impact on making FWA more achievable, but flexible working is not a new concept. According to iOFFICE, in the 1930s economist John Maynard Keynes forecast a 15-hour work week by the year 2030, and in the mid-1960s, ‘German management consultant Christel Kammerer argued that balancing childcare with professional responsibilities was to blame for the lack of women in the workforce… calling the proposed solution ‘flexiwork’.’

Are flexible working arrangements practical for small businesses? At first glance, perhaps not. With fewer workers employed, organising staffing to meet the daily needs of an SME business can be more challenging. Many SME departments; finance, sales, marketing, etc. are made up of sole employees or teams of two and three.

However, Forbes reports that ‘more than half (54%) of employees surveyed globally would consider leaving their job post-pandemic if they are not provided some form of flexibility in where and when they work,’ based on findings from the EY 2021 Work Reimagined Employee Survey.

In times of talent shortages and skills gaps, this is a sizeable number, considering it costs a minimum of 50-60% of an employee’s annual salary to replace leavers.

Taking the productivity advantage

So what are the positives? Employsure cites a study by Stanford University in the US, where ‘not only did flexible working arrangements increase productivity, it also saved the employer $2,000 (USD) per employee.

‘There are fewer distractions at home, and it’s much easier to focus when there’s no superfluous meetings, casual colleague drop-ins or constantly ringing phones. Productivity improvements may also be due to the fact that people feel a need to work harder to justify their arrangement.’

As well as considering the structural and organisational impact of FWA on a business, owners and managers should consider any practical advantages. Home workers don’t require parking spaces and don’t get stuck in the daily commute – time and resources which SME owners are effectively paying for – and many experts believe that home-working employees are naturally empowered to work at times that best suit their individual productivity levels.

Fewer office workers can also provide opportunities to save on rent costs by considering shared coworking space options, renegotiating current leasing arrangements or renting smaller premises.

An Institute of Directors survey found that 74% of company directors plan on working from home after the pandemic, and half will reduce the long-term use of workplaces.

On a people level, will such initiatives benefit a team’s mental health and wellbeing? Will FWAs create a positive and productive work culture within an organisation? Will FWA boost staff loyalty and retention?

Still not sure? Why not consider trialling a more rigid framework of flexible working over the first four months of 2022? Consult your team and analyse which departments and to what roles FWA may be best suited.

After four months, see what sort of results you’re getting and go from there. It will enable you to make improvements as you refine the process. Of course, flexible working might not be right for your business, but it will give you a chance to explore the possibilities through a low-risk strategy.

Further Reading

Business.govt.nz outlines employer obligations and employee expectations around flexible working arrangements, explains the types of options available, and includes a handy quiz to discover if your workplace is truly FWA-friendly and FWA-ready.

Employment New Zealand has a wide range of policy information, guidelines and resources for both employers and employees including a Flexible Work Toolkit, which provides advice for business owners to use flexible working as a means of attracting and retaining talent.