How flexible working could help your business to become more agilePosted 28 Sep 2018 This alternative to redundancy can prevent staff lay-offs. Trevor Johnson reports
Everyone hates getting rid of staff . But when the financial future is uncertain and there’s less work coming in, making redundancies often seems the only viable option.
The good news is that it doesn’t have to be. Latest government research shows that 80 per cent of businesses are now prepared to think about offering flexible working hours - and over 20 per cent are already doing so.
Reduction in working hours
John Wright, a London business analyst, says: “This has resulted in staff in many companies keeping their jobs when at first it seemed they would lose them. It usually means some reduction in working hours, but many people think that’s preferable to losing their jobs.
“One popular system requires people to work peak times, but lets them chose their remaining working hours. This gives them some sense of control, even though they’re working less.”
In fact, the law gives the right to request flexible working to employees who are parents of children up to 16, parents of disabled children up to 18 and carers of adult relatives. But an increasing number of companies are offering flexible hours to all staff likely to face redundancy.
“It’s a way of saving on redundancy costs and the expense of recruiting and training new staff when the economic situation eventually improves,” John explains.
One method, used by a City law firm, involved offering staff the option of working four-day weeks on 85 per cent of pay or taking a sabbatical of up to 12 weeks on 30 per cent of pay. This way, it was able to retain key members of staff . After a year, an improvement in business allowed the firm to reinstate the five-day week.
An increasing number of variations on flexible working are now being tried as an alternative to redundancy. The most successful include:
The employee works the same amount of hours, but over fewer days.
Originally used by seasonal industries, employees work an agreed number of hours a year, worked flexibly to coincide with the company’s busiest times.
Splits a role between two employees and the reduced amount of work allows them to work more flexibly.
Employees organise shifts between themselves, choosing hours that are best for each person. Zero hours contracts. They don’t guarantee employment, but require workers to be on call.
A voluntary arrangement that reduces an employee’s hours for an agreed period, with a guarantee that they will return to full-time working on a specific date. Working from home. One of the most painless ways of cutting costs without cutting jobs is telecommuting. It can reduce the costs of keeping someone working in an office by at least 20 per cent.
How it can work
Consultants cite a recent case of how flexi-hours can work when an engineering business wanted to reduce its costs by 20 per cent. It had an experienced production team, which it was reluctant to break up by redundancies.
After a majority decision of 75 per cent, the workers agreed to explore other options. As a result, they decided to work 90 per cent of their usual week over four slightly longer days and take a pay cut of 10 per cent.
The factory would close on one day a week, giving the company another 10 per cent in cost savings.
The arrangement was tried for three months and then extended for a year, after which it was able to revert to normal working with a turnover nearly eight per cent higher and a substantially increased profit. No one lost their jobs.
Should you accept an offer of flexi-hours working? Advises Richard Hemmings, a lawyer specialising in redundancy legislation: “It’s important not to make any snap decisions. Discuss your options with your union or employee representative, if you have one, and talk things over with your family - it will affect them, too.
“Remember, your employer can only reduce your hours if your contract of employment allows it. If not, your employer will have to negotiate a change in your contract. You should also check that your contract allows you to take on another job, should you wish to, while you’re on reduced hours.”
Depending on what your contract says, there’s usually no limit to how long you can be put on reduced hours.
But Richard adds: “If you have been in this position for four weeks in a row or six consecutive weeks during a 13-week period, you should be able to claim redundancy pay if you decide you have had enough.”
Employee and employer benefits
Management expert Paula Gooding says that in many cases flexi-time has benefited both employees and employers: “Choosing the hours you work means you can avoid a tedious commute, more easily arrange childcare and maintain a better worklife balance by finding more time for hobbies and sport.
“Companies are reporting that flexible working is resulting in happier employees, better morale and a higher level of productivity, despite the fact that in many cases take home pay has dropped.
“No one wants to earn less, but when it means keeping a job and living in hope that a cut in hours is only temporary, the majority of workers seem to accept the situation philosophically.”
Well, usually. John Wright remembers a case of a disgruntled quantity surveyor who told him: “When they said we were going on a flexible three-day week rather than get made redundant, my instinct was to tell them what they could do with their job. After all, I’d been with the company 25 years.
“Things were tough, but working only three days meant I had time to get my CV in order. In the end, the company didn’t survive, but I got the redundancy pay I wouldn’t have got if I had quit and a far better job with a rival firm.
“I guess I’ve got a lot to thank flexible working for.” Read more like this< Back