Resilience through Flexible Working Tuesday 3 rd March

Resilience through Flexible Working Tuesday, 3 rd March 2015 Flexibility

Flexible Working • The term 'flexible working' describes a type of working arrangement which gives some degree of flexibility on how long, where and when employees work. • The flexibility can be in terms of working time, working location or the pattern of working.

Flexible working relates to an organisation’s working arrangements in terms of: working time, working location and the pattern of working.

There has been increasing interest in issues of flexibility at work in recent years – due to a belief that this can link to sustained competitive advantage: • An organisation that is flexible is able to deploy its people and make use of their talents more effectively and efficiently. • The more flexible an organisation becomes, the better able it is to respond to and embrace change. • Flexibility, particularly in terms of hours of work, is valued by employees and can thus help with recruitment and retention.

Defining flexibility Much derives from John Atkinson’s model of the ‘flexible firm’, which suggests a workforce composed of three basic groups: core workers, peripheral workers and subcontracted workers. Central to the model are two types of flexibility: functional and numerical. The flexible firm Source: Atkinson (1984)

Functional flexibility is applied specifically to the core workers (permanent, full-time staff) and means that instead of working to rigid job descriptions, individuals are capable of undertaking a broad range of duties, at different levels. Numerical flexibility is applied to the peripheral group (parttime/temporary staff) and subcontracted staff. These individuals are less central to the organisation’s success because their skills are more widely available. They enjoy less job security than core workers and will be among the first to have their hours cut or to be laid off. Other forms of flexibility suggested include temporal flexibility (relating to when people work) and financial flexibility (variable payment systems).

In recent years, it has been suggested that the notion of the ‘core worker’ is no longer appropriate. The supposition is that employers will increasingly wish to buy a specific service from a worker rather than pay for the worker’s time. Instead of seeking job security, people will focus more on employability and develop portfolio careers. Organisations will become increasingly ‘virtual’ and society increasingly ‘jobless’.

Reasons for increased interest • A response to increased volatility in product markets • New technologies • Interest in established Japanese management techniques • The decline in the size and influence of trade unions • Increased female participation in the labour market – resulting in greater interest in work–life balance issues • Government encouragement • Short-term thinking in financial markets • The growth of the service sector and the evolution of a ’ 24 hour society’.

Functional flexibility Is associated with: • Reduction in the number of job descriptions • More teamworking • Flatter hierarchies • Job rotation schemes. Advantages – • People are deployed where they are most needed. • It allows a faster response to change. Disadvantages – • It is costly (training and administration costs). • There may be resistance from employees. • Some skills are too complex/specialised to be shared.

Numerical flexibility People are employed on different forms of ‘atypical contract’ so they can be deployed where they are most needed when they are needed. • Part-time contracts • Temporary contracts • Subcontractors • Homeworking.

Part-time contracts Just over a quarter of the UK workforce are part-timers, 80% of whom are women. Other key groups are the retired and students. Main reasons for the creation of part-time posts: • To respond more efficiently to peaks and troughs in demand • In response to a demand from employees. Disadvantages: • Workers may show less commitment to the organisation • Inflexibility in terms of the hours individuals are available for work (because other commitments are often a priority) • Increase in training time and costs when two or three individuals employed in place of one full-timer. are

Temporary contracts These can either be for a fixed term or on a seasonal basis to carry out a specific job, or for an indefinite period. Main reasons for employing temporary staff: • To cover for absent staff • To match staffing levels to peaks in demand • To deal with one-off tasks • To adjust staffing levels/provide cover while levels are changed • To provide specialist skills • Because applicants have requested temporary work • To screen for permanent jobs • Because they are easier to recruit • To reduce wage costs • To reduce non-wage costs.

Subcontractors Two basic forms of subcontracting: 1. The use of consultants and other self-employed people to undertake specific, specialist work 2. The subcontracting out of a substantial body of work (such as cleaning or security) to a separate company – who can take advantage of economies of scale to carry out the work more efficiently. Another possibility, which is becoming more common, is the rehiring of retired employees on a self-employed basis. This allows the organisation to draw on organisationspecific expertise, but only when there is a particular demand.

Homeworking This can be an attractive option for both parties: • Employees have more control over their hours of work, etc. • Employers reduce costs in terms of office space, etc. Employers should be wary of the potential drawbacks: • Individuals’ morale may drop as a result of isolation from coworkers. • Traditional performance management techniques and control systems are not appropriate. • It is harder to maintain effective communication.

Flexible Working hours • Flexible working hours: • part time working, job sharing, temporary working, agency workers and casual employment, term time and seasonal working, remote and home working and virtual organisations.

Temporal flexibility Involves a move away from setting specific hours of work: • Flexitime • Annual hours schemes • Zero-hours contracts

Outsourcing The situation in which an organisational function that is customarily carried out on an in-house basis by the organisation’s own employees is instead purchased from an external specialist provider. Reasons for outsourcing: • Some companies are not large enough to be able to justify the employment of specialists (accountants, etc). • It enables the organisation to focus on its ‘core activities’. • It can result in substantial costs savings, due to economies of scale. • Quality assurance – when there are problems with performance, it is easier to threaten a provider with the loss of a contract than it is to manage an in-house performance improvement programme.

Problems with outsourcing: • Legal disputes over the meaning of contractual terms • Managing the relationship effectively • Poor levels of service • Communication difficulties • Problems in evaluating/monitoring performance levels. At the base of the issue is the fundamental matter of the difference of interest between the two parties: • The client wants a decent level of service provided on an ongoing basis at a reasonable cost. • The contractor wishes to maximise profits and reduce costs.

Zero Hours Contracts (CIPD Report) • Are zero-hours contract workers/employees obliged to be available for work? • Overall, our findings from both our survey of employers and survey of zero-hours contract workers suggest that in the majority of instances, zero-hours workers are not obliged to accept work and are not penalised by their organisation when they turn work down.

Criticisms of flexibility 1. The main criticisms are characterised by a tendency to equate the concept of ‘flexibility’ with that of ‘employment insecurity’. There is a supposed incompatibility between the principles of the flexible firm and high-commitment P&D practices. 2. Such employers tend to seek staff who are already trained, rather than developing people themselves. This would ultimately result in chronic skills shortages and thus damage the health of the national economy. 3. Ethical considerations: developing a peripheral workforce allows employers to exercise a greater degree of power – exploiting these individuals’ desire for greater stability. 4. Widespread adoption of the flexible firm model would result in an unequal society.

Employability and mutual flexibility How can we reconcile the two positions – the commercial case for greater flexibility (greater efficiency and adaptability) versus the possible long-term harm that results from the creation of insecurity? • The term ‘flexibility’ covers several very distinct types of employment practice – not all of which are associated with insecurity. • Staff have more to gain in the long term from improving their ‘employability’ than they do from remaining in employment with one organisation. Reilly’s term ‘mutual flexibility’ refers to forms that bring benefits to both employers and employees.

Barriers • Knock-on effect of service that the organisations can provide