Key takeaways:

• Flexible work arrangements, such as work from home options or the option to set work hours, give employees some control over when, where and how they work.
• Improve workplace inclusivity for demographics like carers and older workers by allowing them to fit work around their obligations.
• Improve productivity by raising staff retention, engagement and wellbeing.
• Different demographics thrive in different flexible work arrangements. Use data on the diversity in your workplace to inform flexible work strategies.

Maximising workforce productivity could involve working fewer hours and getting away from the office. Sound paradoxical? Some of Australia’s biggest companies, from Telstra to Westpac, don’t think so. They’re encouraging employees to work from home and set their own work hours.

Flexible work arrangements give employees some control over when, where and how they work. The exciting news: pretty extensive research finds that workplaces which offer flexible arrangements are both more inclusive and more productive.

But like all workforce management strategies, the success of policies depends on implementation. Businesses need data on the diversity of their workforces to implement tailored flexible work arrangements in alignment with the needs and preferences of their staff.

Flexible work promotes inclusive workplaces

Growing hubbub over flexible work practices reflects the changing demographics and needs of modern-day workers. While women historically left work to rear children, in Australia and many other OECD countries, the majority of working couples are now in dual-income relationships. Compared to previous generations, modern working couples with dependents are pressed for time.  

In this environment, flexible work options can be hugely attractive to employees. The option to work from home or choose work hours gives staff the liberty to tailor their work schedule around their caring and other obligations. In a Bain & Co survey of over 1,000 members of the Australian business, not-for-profit and government community, 22% of men and women returning to work after parental leave reported that “the availability of flexible options was important in their choice to return to work.”

Given that caring obligations are a primary barrier to female workforce participation, flexible work options can help businesses achieve higher gender parity. Bain & Co found that 50% of women working flexibly are “experienced employees or junior to middle managers, who primarily do so to care for children.” They conclude, “It’s clear that flexible working is a critical enabler to retaining women in the workforce.”

Given that parental leave policies in many countries continue to assume that women are the primary caregivers in relationships, flexible work arrangements open to all genders can also help distribute parenting responsibilities more equitably. Access to flexible working arrangements is a key requirement of the Employer of Choice for Gender Equality citation awarded by the Australian government’s Workplace Gender Equality Agency (WGEA).

Here’s a case study. In September 2013, Telstra adopted a company-wide “All Roles Flex” initiative where performance is measured by outcomes, not face time. All Telstra’s advertised jobs now have the designation “flexible.” A year later, female representation among new employees was up by more than 6%. The number of women joining Telstra began exceeding the women leaving, ending a long-standing retention issue.

Another demographic shift in Australia and several other developing countries is the rising proportion of older workers. As populations age and medicine and health breakthroughs advance, people are working for more years than previous generations. Economic growth also increasingly relies on businesses retaining older workers as sources of expertise, experience and labour, as last week’s blog post explored.

But older workers have their own demands when it comes to work–life balance. As one researcher, Carol T Kulik, puts it, “On the one hand, they’re physically capable of working longer, so they could stay in the workforce. On the other hand, they’re tempted by retirement so they can travel, spend quality time with family and friends, or pursue a favourite hobby.” Flexible work arrangements such as job sharing (one job shared across two people) or phased retirement (a worker gradually decreases their work hours over several years) can give workers the best of both words.

Flexible work maximises business performance

Flexible work may increase workplace inclusivity, but what are the impacts of practices like working from home and job-sharing on productivity? Research suggests flexible work options can unleash performance. First, as a previous blog post has explored, a diverse workforce can itself be a source of improved business outcomes, by facilitating increased innovation, staff morale and community insights. WGEA concludes, “Attracting and retaining diverse talent is crucial to future-proofing the workplace and the Australian economy more broadly. Making workplaces more flexible and responsive to the needs of employees is a key way of doing this.”

Flexible work practices also promote productivity through retention. When staff resign, the costs of finding and training a replacement can be significant, not to mention the flow-on effects of losing a worker with institutional experience and expertise. In contrast, flexible work can remove barriers to returning to the workplace and prevent premature resignations, particularly from demographics such as new parents and older workers.

One researcher sums up the win-win effects of flexible work: “For employees, this means being better able to fit their jobs around other responsibilities, such as looking after children or elderly relatives. For businesses, this means retaining staff and saving the tens of thousands of pounds it costs to replace them.”

• 

Flexible work may be a particularly effective strategy for retaining younger workers. Research finds that millennials place a premium on work-life balance compared to older generations. In a survey of nearly 10,000 workers across eight countries, Ernst & Young found that lack of flexibility was among the top reasons millennials quit jobs. In another study, EY found that “almost 80% of respondents aged between 28-35 reported that they desired the option to work remotely.” Businesses looking to recruit and retain the next generation of talent should examine their array of flexible work options closely.

Finally, flexible work improves performance by increasing staff wellbeing and engagement. Simply, workers who feel positive about their workplace are also more likely to go above and beyond. Freeing workers from the rigidity of fixed work hours and a fixed workplace also allows workers to measure their productivity by output rather than facetime. For example, an employee can get more out of their time by extending their work hours during high-pressure periods and reducing them during periods where the workload is low.

All these arguments in favour of flexible work informed Westpac Bank’s “All in Flex” campaign in June 2015, which made all existing and new roles in the company eligible for flexible work arrangements. “If people have the flexibility to manage their personal commitments, they are more likely to bring their whole selves to work every day. And that means they’re more likely to do their best work and exceed customer expectations,” says Brian Hartzer, Westpac Group CEO.

Implementing flexible work practices

As is the case with all policies, however, the success of flexible work arrangements in promoting inclusivity depends on implementation. Different demographics thrive in different work arrangements. Older workers, for example, may be more interested in phased retirement options than millennials. In contrast, work from home options may improve retention among both groups. Businesses interested in unleashing their productivity through flexible work arrangements can start by gathering data on the diversity and demographics in their workplace to inform their strategy.

Studies into the effects of flexible work have also found that “best practice” companies do not implement flexible work arrangements in isolation. Businesses exploring flexible work should implement at least four simultaneous changes to broader workplace structures.

First, businesses may need to invest in specific technology and resources to make flexible work possible. Companies where employees often work remotely, for example, may benefit from advanced video conference and communications tech to supplement reduced face-to-face meetings.

Second, staff need to know that they will not be penalised by choosing unconventional working arrangements. Research finds staff are more likely to take up flexible work options when there is active encouragement from senior leadership—and particularly when managers themselves act as models by choosing flexible work options.

In companies where flexible work has been associated with women and child-rearing, leadership may have to implement strategies to remove the stigma associated flexible work. The Australian Human Rights Commission has found that 27% of fathers and male partners have reported experiencing discrimination related to parental leave. Men are also twice as likely as women to have their request to work flexibly rejected. The productivity benefits of flexible work should be well communicated across all levels of a company.

Last, flexible work arrangement should be accompanied by clear expectations when it comes to workloads and continued communication around issues of stress and mental health. Flexible work practices have sometimes been found to conversely increase workloads and stress. This can be attribute to a number of possible reasons, such as blurred boundaries between work and home/leisure. Remote working can lead to a sense of isolation from colleagues.

Diversity Atlas can help your business or organisation implement flexible work arrangements that align with the diversity of your workforce and members. Get in touch about unleashing the power of difference.