Flexible work arrangements are the future
Technological advancements and changing views and needs of employees created a situation in which flexible work arrangements such as flextime have become increasingly important for both employer and employee. The war on talent is alive and kicking. Flexibility at work has become a tool to attract new talent.
What is workplace flexibility?
Defining the concept of flexibility at work is not easy. After all, there are many different forms of flexibility and therefore also different definitions. Flexibility is a concept that can have different meanings depending on the context in which it takes place. For example, it is primarily a way for organizations to create adaptability and competitive advantage and for employees to find a balance between work and private life (Hofacker & Konig, 2013). Work flexibility can, therefore, be defined as a mutually beneficial arrangement between employees and employers in which both parties agree on when, where and how work gets done. This definition is built on the idea of aligning the needs and interests of the organization with those of the employee to achieve mutual benefit: a win-win situation.
Different types of work flexibility
The labor market in the period after the Second World War is characterized by relatively stable labor relations. From the 1970s, however, there has been a trend towards greater flexibility in the labor market. Because periods of stable economic growth occurred only rarely, organizations were able to offer less stability to its employees. As a result, people were less likely to get a permanent contract. At the same time, the flexibility of the labor market was encouraged by the government. This was reinforced by a development that ran simultaneously with the above-mentioned developments: globalization. Due to globalization, companies are increasingly active internationally, with the result that they are faced with more and greater competition. In addition, changes, due to technological progress, happen faster and faster. All these developments together have ensured that markets have become more dynamic and complex. It is therefore virtually impossible to predict what will happen in the market. Partly because of this, internal resources of the organization have become even more important for achieving competitive advantage and better organizational performance. By starting from internal resources, the organization is placed in a position to be innovative and not only be responsive to what is happening in the market. However, due to the increasing complexity of markets, it is difficult for organizations to have all the resources they need. Flexibility is a solution for this because it enables the organization to adjust its internal resources to changing circumstances. This increases the internal change speed of the organization so that it can better respond to technological changes, actions of competitors and changing market demands. The people in an organization are crucial for this, an organization can only be flexible because its employees are.
Because organizations operate in different environments with different requirements, there are also several forms of flexibility to deal with this. In the literature, a distinction is usually made between four different forms of flexibility (Atkinson, 1984). The flexibility model of Atkinson (see Figure 1.1) is a visualization of this.
1. External numerical flexibility
This is about adjusting the number of employees to cope with fluctuations in the demand for products or services. This may include the recruitment of temporary or temporary employees. External numerical flexibility is achieved by attracting people from outside (new employment relationships). As this often concerns temporary positions, these are mainly filled by temporary employees.
2. Internal numerical flexibility (flextime)
To accommodate fluctuations in the demand for products and services, the hours of the current employees are adjusted. Internal flexibility is about creating flexibility with internal staff (in current employment relationships). This includes the use of flexible working hours, overtime, part-time work, evening and weekend services and working from home.
3. Functional flexibility
This concerns measures aimed at increasing the employability of employees. This is based on training, job broadening, teamwork and task and job rotation. This allows employees to be deployed more broadly in the organization and the organization to handle changes in the environment more easily. After all, employees are multi-employable, which means that illness cases and sudden fluctuations in the amount of work in departments can be absorbed.
4. Flexible rewarding
By means of flexible remuneration, part of the risk of the organization is placed on the shoulders of the employees. It is about the ability of organizations to reduce wage costs in the event of changing market conditions in order to be able to continue to recruit and retain employees.
The above-mentioned forms of flexibility, however, mainly related to increasing the flexibility of the organization. Looking at flexible working arrangements based on a win-win situation for employees and the organization, it is clear that most forms of flexible working are generally classified into three categories: location-independent working, flexible working hours and flexibility in contract hours (employment conditions) ).
Benefits of work flexibility for organizations
There are several reasons for the increased interest of organizations in flexible working. The aging of the employed labor force is one of the factors that contribute to the need for companies to keep up with the trend towards greater flexibility. The baby boom generation is aging and the growth in the number of young people is decreasing. Organizations are therefore working to make themselves attractive to both the young and the elderly. Offering flexible working methods is also important when recruiting new staff. In a competitive and tight labor market where good candidates are scarce, flexible working arrangements are a means for employers to distinguish themselves and to profile themselves as a “top” employer (Kossek et al., 2014). This makes the organization more attractive as an employer and makes it easier to hire well-qualified personnel. Because organizations can attract and retain talented employees through flexibility, they provide themselves with unique and valuable “internal resources”. Flexibility also plays an important role in the area of staff retention (Hill et al., 2008; Devereaux, 2011; Kossek et al., 2015). Staff retention can be described as a long-term goal of the organization to ensure that the best candidates choose the organization and that they remain connected to it (Idris, 2014). The challenges that have arisen with regard to retention of employees are mainly due to the changing needs of generation Y and the increased labor participation of female employees. This has encouraged organizations to offer their employees alternative work forms. This not only attracts people from generation Y but also dual-income households, people with disabilities who are unable to work regular working hours and individuals who want to develop themselves alongside work. Flexible work forms can also prevent people from leaving the organization because they want to work fewer hours (Kossek et al., 2014).
Benefits of work flexibility for employees
The measures that organizations take are a response to the changing needs of employees. The new generation of employees (from generation Y) have grown up with rapid technological and economic developments. Research shows that flexible working hours for this group, after the salary, has become the most important employment condition. In addition, the number of dual-income households has grown strongly in the past 20 years. This has increased the conflicts between work and private life. Organizations are responding to this, according to research from WorldAtWork (2011), with 59% of the companies having flexible working hours available for their staff. However, this high percentage does not mean that it is actually used. It often happens that employees formally have the possibility to make use of flexible working arrangements but that they do not know about this (Bousey, 2016).
For employees, flextime is a fulfillment of the wish to be able to meet personal preferences and requirements with regard to the balance between work and private life. To attract well-qualified staff, it is therefore crucial for organizations to be able to offer flexibility in working hours, location and working conditions. Flexible working for employees is generally formulated in the literature as “the ability of employees to make choices that influence where, when and for how long they are engaged in work-related tasks” (Hill et al, 2008; McNamara et al, 2012). The extent to which employees can exert this influence depends on a number of factors such as the nature of the position, the requirements from the organization and the available technology. This definition also shows that on the one hand it must be formally possible to be able to work flexibly, but on the other hand the employee must also use this space himself. Only the presence of flexible arrangements in the organizations is therefore not sufficient. The employee must want and also be able to make use of these schemes. An important part of this for the organization is the adaptation of processes in the organizations so that a culture can be created in which flexible working fits in optimally with the organization (WFD, 2011).
The main reason why employees want to work flexibly is that it provides for the need to monitor the balance between work and private life. The balance between work and private life can be defined as the way in which individuals combine and manage work and private life, including the various roles and conflicts that arise. In the past decade, the dividing line between work and private life has increasingly blurred (Kossek, 2005). Due to the flexibilization of the labor market, increased labor participation and technological developments, work and private life are increasingly intermingled. People now take work home faster or work at irregular hours, which can lead to conflicts in private life. These conflicts between work and private life can result in stress and health problems. However, the extent to which employees need flexibility also depends on factors such as gender and family situation. Women generally attach more value to the possibility of flexible working than men (Shockley & Allen, 2012; Radcliffe & Cassel, 2015). This is further reinforced in the situation that the woman has children. The participation of women in the labor market is constantly increasing, with the result that the traditional division of roles between men and women is becoming blurred. The “housewife” is gradually disappearing. This makes family life more difficult to combine with work. However, technological developments have made it possible to work location and time independently. Flextime has become one of the most important ways to monitor the balance between work and private life (Russell, O’Connell & McGinnity, 2009). Flexible working hours together with other flexibility options help employees to combine care tasks in private life with work. It has been found that this can lead to a reduction in stress, better health and fewer conflicts between work and private life (Kossek et al., 2014; Boushey, 2016). In line with these positive consequences, flexible work arrangements for employees are a sign that the organization is involved in facilitating a balance between work and private life, leading to positive behavior and higher job satisfaction.
How to successfully implement flexible work arrangements
Kossek et al (2015) also make a distinction between three “pitfalls” of flexibility (see Table 1.3). The first pitfall is about the unintended consequences that flexibility can have for employees in terms of social interactions with colleagues and the relationship between work and private life. For example, flexible working has a negative effect on the degree of interaction between colleagues, supervisor and the rest of the organization. Flex workers are less often present (or at different times) in the office than colleagues who do not work flexibly. This is the reason that flex workers may have the feeling of being isolated from the rest of the organization, making them less likely to use flexible work arrangements.
Another problem is that it is difficult for managers to map out, reflect on and reward the performance of flexible employees. Managers do not always have more insight into the results and the way of working of flex workers in the organization. However, managers are an important link in the translation of organizational policy to the workplace. The same applies to flexibility schemes, on the one hand managers can choose to encourage it and, on the other hand, to stop it. In line with this, employees may have the impression that their choice to work flexibly has a negative effect on their career options. The negative consequences can, for example, be expressed in the form of fewer career opportunities, poorer assessments and less training budget. Employees are concerned that flexible working creates the impression of colleagues and supervisors that they are less involved and committed to the work (McNamara, Pitt-Catsouphes, Brown & Matz-Costa, 2012). This is partially confirmed by a study by Leslie, Park & Mehng (2012), where it has been found that employees who use flexible working arrangements to increase their own productivity are considered more involved than employees who do not use flexible working arrangements. It has also been found that employees who use flexible working arrangements for private reasons were considered to be less involved than employees who do not use these arrangements. The way in which flexible working is used by the employee is therefore an indicator of the involvement of these employees for the organization.
In addition, employees look at the behavior of colleagues and the culture of the organization to determine whether there is a negative or positive attitude towards flexibility in the organization. In organizations where people have a negative attitude towards flexible working and an attempt is made to conform employees to ‘the norm’, employees will make less use of flexible schemes. To prevent employees from working flexibly due to this fear and social control, an important role is reserved for the manager, who must, therefore, be able to objectively assess employees. By setting clear requirements and expectations, part of the fear of employees can be removed. In addition, it is important that a culture is created in which flexible working is seen as a tool to improve performance. However, Kossek et al. (2015) also warn about the phenomenon described above as the negative impact of flexibility on private life. They state that, by working flexibly, the chance that work-related matters penetrate private life is greater. After all, flex workers take work tasks home more often and this increases the chance of conflicts with private matters.
Secondly, it is important that there are flexible working rules and that they are fair and just. An important distinction with regard to flexibility in work is that between availability and use (Allen et al., 2013). The availability is about the extent to which there are formal arrangements within the organization that enable flexible working for everyone in the organization. However, this does not mean that it is actually used within the organization and that employees benefit from it. Many organizations have established conditions that employees must meet in order to qualify for flexible working. McNamara et al (2012) state that most employees obtain flexible working arrangements through informal agreement rather than through formal arrangements. An important role is reserved for managers who often determine which employees are ultimately eligible to work flexibly. If employees feel that this happens randomly and therefore unfairly, it will lead to a disruption of work relationships. Clear policy in the form of rules and guidelines is therefore important. Furthermore, the introduction of flexible working also influences the world
The above figure shows that there are different phases with regard to flexible working in organizations. Before starting to improve or implement schemes, it is important that organizations evaluate the phase of the flexibility spectrum. The model runs from phase 1, where people only use flexible working in special cases, up to phase 4. In the final phase, flexible working is part of a results-oriented culture and is used as a strategy to achieve better business results.
In order for flexible working in the organization to be successful, HR has an important role to play (Kossek et al., 2014). They can achieve this by firstly positioning flexible working as a part of the strategy, as a result of which it is no longer seen as just a collection of individual agreements. Creating regulations and policies is crucial for this. It is, however, important that HR can create support by substantiating the benefits of flexible working and demonstrating that the ways of flexible working suit the employees and the requirements of the organization. It is therefore important to keep a finger on the pulse, to be open to feedback and to improve the flexible working program. To substantiate the benefits, one can show, among other things, that flexible working contributes to increasing employee engagement, that it is a way to reward employees and how it can contribute to improving business results. Furthermore, it is important to create support among managers so that policy on the floor can actually be implemented. If flexible working is introduced in such a way that both the objectives of the employees and those of the employer can be achieved, then it leads to many benefits that have already been extensively discussed in the literature described above.
The figure below lists the factors that are important for the successful introduction of flexible working in the organization.
- In the first instance, it is important to know which forms of flexible working fit the functions in the organization. The requirements from the position must allow flexible working.
- Subsequently, measuring the effects of flexible working on various parties is crucial. In an organization, changing the working method has consequences for several groups, including employees, managers and customers. Keeping a finger on the pulse with regard to the effects of this is of great importance.
- In line with this, the establishment of clear performance objectives is a way of making this measurable.
- Finally, communication and feedback play an important role. Good communication is important, especially between the employee and the manager, otherwise the effectiveness of flexible working is at stake.
- Giving feedback is important to ensure that it continues to offer benefits for all parties involved.
Work flexibility leads to an increase in performance
Despite an increase in the benefits of flexible work arrangements for organizations, they are often still reluctant to implement and encourage those arrangements because they are afraid that this is at the expense of productivity and entails higher costs (McNamara et al., 2012). However, research shows that offering flexible work arrangements, in addition to higher retention, also leads to an increase in productivity and efficiency (Eaton, 2003; Kossek et al, 2007). Employees are more effective and productive because they are less distracted by social interactions (Shockley & Allen, 2012; Kossek et al, 2014). Moreover, it has been found that it also leads to a decrease in absenteeism (Heywood & Miller, 2015; Boushley, 2016). This stems from the fact that flexible working employees experience less stress and health problems. Lower absenteeism has a positive effect on productivity and reduces costs. Furthermore, a research study done by Vodafone showed that 86% of the organizations that work flexibly, observe an increase in productivity. This is in line with other research that shows most employees and managers experience an increase in productivity due to flexible working (WFD, 2011).
An experiment with working from home at the Chinese travel agency Ctrip showed an increase of 13% in productivity (Bloom, Liang, Roberts & Ying, 2015). About 9% of this increase came about because employees worked more minutes per hour. The cause of this is that they took fewer breaks and had fewer sick days. The other 4% productivity increase was due to the employees did more in an hour, it turned out that this was due to a quieter and better working environment.
Another advantageous point of flexible work arrangements for employees is the fact that they have less travel time (Kossek et al., 2015). Thanks to flexible working hours, for example, one can travel outside peak hours, which makes travel time shorter. When working from home commuting is even completely unnecessary. For organizations this is advantageous because employees spend less time traveling, making fewer long days and therefore being able to work healthier and fitter. This subsequently has a positive effect on productivity. Moreover, it also saves costs because no travel expenses allowance has to be paid.
Technological progress makes it possible to share and obtain information beyond the boundaries of time and space, this offers the employee more control over his work throughout the day. This flexibility gives employees more autonomy to organize their work tasks according to their own preferences and to coordinate work and private care tasks with each other.
In conclusion, it can be said that there are several factors that influence the use of flexible working arrangements by employees. For example, it has emerged that for employees it is primarily a way to safeguard the balance between work and private life. The manager of the employees and the fear of possible negative consequences also play a role in this process. After all, he often determines the extent to which employees feel encouraged to work flexibly. The culture of the organization and the social aspect are also factors that count. It has also become clear that the way in which flexible working has been introduced into the organization is also important. This has to do with the policy and vision that the organization has on this. Finally, flexible working has a positive impact on the performance of employees and it is important that clear objectives are set.