Flexible work saving government millions annually, study finds

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Flexible work is boosting productivity and women’s participation in the workforce, according to a report released over the weekend.

It’s also saving Victorian organisations hundreds of millions of dollars a year.

The Department of Environment, Land, Water and Planning — well known for its efforts over several years to improve flexibility — is benefiting to the tune of $31 million per year, argues the report from consulting firm Nous.

The state government commissioned Nous to make the case that increased flexibility is not just about social justice, but makes good business sense. The release also includes a tool for calculating the potential savings available to other organisations.

“Today’s report proves that flexible workplaces are not only the right choice but the smart choice,” says Minister for Women Natalie Hutchins.

Labour productivity improvements comprise the majority of the benefit, with employees saying that measures such as working from home or part time allowed them to “work smarter and better”.

Improved ability to recruit quality candidates, improved retention of experienced employees and reduced absenteeism also brought benefits.

Flexibility is particularly important for women — ABS data showing that in 2015-16, women took 95% of primary parental leave used by non-public sector employees. Women are also more likely than men to have other caring responsibilities. In 2015 the proportion of women who provided primary care to a person with a disability was twice the proportion of men. Flexible work arrangements enable women with caring responsibilities to participate in the workforce.

If men are supported to work flexibly, it will hopefully encourage them to share the burden of unpaid work with women more equally. Perhaps normalising flexible work will reduce the career cost of working part time, which the Department of the Prime Minister and Cabinet recently identified as one of the contributors to the gender gap.

But it’s still a work in progress. The Workplace Gender Equality Agency’s gender equality indicators reveal that, while 45% of Australian employers have policies on flexible work and family and caring responsibilities, only around 13% have a strategy for implementing such policies.

The costs of flexibility

The benefits of flexibility were partially offset by increased administration costs, according to the report.

This includes increased complexity from managing more people — an inevitable part of more part timers — as well as additional training for managers not used to dealing with staff working offsite or different hours.

But the benefits easily outweigh the costs, says Nous — the $31 million figure for DELWP is net of these costs and equivalent to 2.25% of the department’s annual appropriations.

The lessons

The study looked at two other organisations — Catholic not-for-profit Mercy Health and regional statutory corporation Wannon Water — and found benefits for both, though of quite different sizes. Mercy Health is saving just under 4% of its budget per year, compared to around 0.2% for Wannon Water.

The report notes the importance of context when calculating the potential benefits for any organisation. Mercy Health, for example, faces a shortage of nurses, while Wannon Water is one of the few employers of highly skilled staff in southwest Victoria. As a result, Mercy stands to gain much more from being seen as an employer of choice, and the subsequent improved recruitment and retention that brings, compared to Wannon Water, where staff have few choices for alternative employment.

There are a few other lessons to come out of the investigation.

Implementing flexibility requires an incremental approach. It doesn’t tend to be done in one big go, but starts with the easier changes and progresses through to more fundamental shifts. This is one of the reasons it can be hard to definitively measure the benefits, says Nous — “initiatives can roll into each other”.

“Taking a staged approach to implementing flexible work enables organisations to test what works and allow the organisation’s culture and work practices to catch up with its strategic direction and policies on flexible work.”

Organisations can offer flexible work without compromising customer service. Public organisations face many constraints when it comes to dealing with customers, whether that be members of the public or a minister. There are often legislative requirements as well as customer demands. All three organisations managed to increase the flexibility available to staff without damaging customer service, however.

One was even able to improve its service. “For Wannon Water, using flexible start and finish times where these are varied across members of a team enables the organisation to provide even better customer service as support is available over a longer work day.”

Supportive leadership is critical. “Leaders who work flexibly themselves and who openly support flexible work can set the tone for a whole organisation,” the report says. “Each organisation said that policy changes were rarely sufficient on their own to create the ‘lived experience’ of flexible work for employees. The organisational culture needed to change as well.”

Managers should be supported to manage flexible teams. “Leading a flexible team presents new challenges for managers. They must first be able to properly weigh up requests for flexible arrangements, noting that granting flexibility to some staff may have consequences for others or for broader team solidarity”, it says. Managing based on output, rather than visible activity, is a useful approach in any workplace, but is particularly important when team members may not be present in the office.