A flexible approach can work in bad times, too

As the economy slows down, a number of businesses are viewing flexible working as a sensible managerial response to harder times.

Work-life balance and the idea of giving more autonomy to workers once seemed to be side-effects of the economic boom – nice-to-have but not fundamental. But as the economy slows down a number of businesses are viewing flexible working as a sensible managerial response to harder times.

Although the aggressive approach to curbing workforce numbers and wage bills is still very much the norm, there are glimmers of a different approach – one that appears to have taken its lead from the debate about work-life balance. This is not a question of strange times and strange bedfellows, more an emerging recognition that flexibility may bring mutual benefits.

In the months before September 11, it had begun to infiltrate the engineering sector almost by stealth – a lifeline for companies with recruitment difficulties and high labour turnover. There were a fair few of these. A survey by Remuneration Economics (to July 2001) shows engineering labour turnover hit an all-time high at 14.9%. Moreover, during the year more than four out of five companies had conducted a recruitment campaign for engineers or craftsmen.

In these conditions new working practices became a key determinant in the competition between employers to capture gifted people. Options such as better leave for parents – Ford has just introduced a ground-breaking 40 weeks’ paid maternity leave for employees, reduced or flexible hours, job-sharing and remote-working – are enticing employees in a way that more traditional pay and benefits packages have often failed to do.

Cynics argue that this sort of recruitment and retention-focused flexibility is a phenomenon of confidence, to vanish in the face of economic downturn. And it’s true that in the airline industry we have already seen a consequence of September 11 in the large-scale shedding of jobs.

But it’s also becoming apparent that flexible working has confounded its critics. The concept has dug itself in to the collective employment psyche and is beginning to adapt to different groups, needs and conditions.

24-hour production

Earlier this year at BMW Oxford, home of the new Mini, the company reached a two-year pay and conditions deal with the workforce to cover the new model. The agreement provides for flexibility on pay (increases of just below 7%) in exchange for a return to a standard 37-hour week (from 36 hours) and flexible working time to allow for 24-hour production.

In October the airline pilots’ union, BALPA, came to an agreement with British Midland to introduce voluntary workplace flexibility schemes such as shortened hours, and job shares, to stave off redundancies. At once the ‘win-win’ rationale is clear: employee loyalty is maintained while employer costs are controlled with the added benefit of lower recruitment costs in the event of a market upturn.

It may be tempting to limit flexible working which emerges from a negotiation to protect jobs rather than increase benefits to options such as an increase in short-term working, rotating shifts, off-site working and so on.

But it doesn’t have to be so. Employers discovering flexibility can be a friend in harder times don’t have to lose the competitive advantages created when employees retain their ability to balance work and family life. Offering employees temporary career breaks, flexible hours, or part-time work could be alternatives to the traditional redundancy approach. Where it works properly, employers could reap the benefits of increased staff loyalty and morale, not to mention retaining key staff who could otherwise be off to a competitor.

In November the Bain Commission on flexible working rights for parents with young children will finally report, setting out the legal circumstances though which an employee’s request for flexible working can be enforced. For companies suffering recruitment and retention problems or needing to cut staff bills – such as those in the engineering sector – a push to recognise workplace flexibility can still work for both employer and employee alike.

At a time when the debate could have stalled in a cul de sac of economic uncertainty, it has instead been given an added dimension which the Bain Commission can incorporate into its report – flexibility and business are not fair-weather friends.