Re-thinking Workplace Flexibility - Novated Leasing & … · 2016-10-26 · Re-thinking Workplace Flexibility The business case for exible ... This whitepaper lays out the clear,

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Re-thinkingWorkplace FlexibilityThe business case for flexible working practices

Flexibility

Re-Think: The Way We Work

August 2016

David Coplin Chief Envisioning Officer, Microsoft UK

“We need to take a more flexible approach to both the workplace and the work we do; one that provides us both the physical and cognitive space to harness the incredible power, insight and experience we offer, but focused not on the individual processes but instead on the overall outcomes our organisations are seeking to achieve.”

Contents

- Foreword ............................................................................................................................................

- Introduction ..................................................................................................................................

- The business case for flexibility ...................................................................................

1. Proven increase in employee engagement ..................................................................................

2. Significant reduction in costs ..........................................................................................................

3. Greater gender diversity & inclusion ..............................................................................................

4. Easier to attract top talent ...............................................................................................................

5. Stress reduced and time regained .................................................................................................

6. More efficient communication ........................................................................................................

7. Increased innovation ........................................................................................................................

- Addressing the objections ................................................................................................

1. “It’ll cost too much to implement.” ................................................................................................

2. “Employees will take advantage and productivity will drop.” ....................................................

3. “How can I manage staff when they’re not in front of me?” ......................................................

- Conclusion ......................................................................................................................................

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August 2016

Foreword 1

Greg ParkesExecutive General ManagerAutopia

Maja PalekaDirectorJuggle Strategies

The business case for flexible work practices is gaining momentum, but in some corners of the corporate world it is still a subject that is somewhat taboo.

There is a mounting body of evidence that substantiates the business case for flexibility - employees that are able to work flexibly are more engaged, more productive, and have more fulfilling lives. A more engaged and productive workforce invariably results in driving high performing businesses to increasing levels of profitability.

While tech firms, telcos, the ‘big four’ banks and accounting firms are trail blazing in this field and reaping the rewards, many sectors struggle. The paradigm shift from the focus on ‘visibility’ and ‘inputs’ (you must be at your desk between 9am-5pm), towards a focus on ‘trust’ and ‘outcomes’ (culture of empowerment and accountability for results) can prove too much to even contemplate.

The business case for flexibility, the common objections against, and the strategies to overcome them, are all presented here. We demonstrate the fact that now, more than ever, flexibility is a business opportunity that leaders can’t afford to miss out on.

We need to re-think the way we do business, we need to re-think flexibility.

3August 2016 | Re-thinking the way we work

“What I really like about this approach [Flexibility] is that it disrupts the status quo and encourages open conversations right from the start. It empowers people to speak up and discuss how they can make their work and career ambitions fit with their life stage and commitments outside of work.”

David Thodey, Former CEO, Telstra

This whitepaper lays out the clear, and demonstrable benefits of flexibility, addresses common concerns and hopefully, provides you with all the information required to overcome the persistence of the status quo.

The world is changing, and flexibility isn’t just an employee perk anymore, it’s a strategic priority.

Flexibility has the potential to make your business more profitable, your employees more engaged and if implemented correctly, it will completely transform your business.The key is to ensure buy-in and support from all sections of the business, because writing a policy and hoping for the best, simply doesn’t work.

Introduction 2

4 Re-thinking the way we work | August 2016

“We like to give people the freedom to work where they want, safe in the knowledge that they have the drive and expertise to perform excellently, whether they [are] at their desk or in their kitchen. Yours truly has never worked out of an office, and never will.”

Richard Branson, Founder and Chairman of Virgin Group

What are flexible working arrangements?

A variety of work practices can be gathered under the umbrella term ‘flexibility’. From job sharing to compressing a working week, flexible start & finish times to working from home.

- Flexible start & finish times

- Job sharing

- Rostered days off

- Working from home

- Compressed working week

- Purchased leave

Why should you implement flexibility in the workplace?

Apart from the many reasons listed here, in 2009 the Australian Government introduced legislation that almost insists on it. The Fair Work Act 2009 (FW Act) provides employees with a legal right to request flexible working arrangements if they have been employed for 12 months, and the request can only be refused on reasonable grounds.1

1 Fair Work Act 2009 (Cth) clauses 65-66

What are the potential roadblocks?

Depending on who you’re talking to, the objections could be any of the following:

“It’ll cost too much to implement.”

“Employees will take advantage and productivity will drop.”

“How can I manage staff when they’re not in front of me.”

How can you overcome them?

By entering into a process of discovery and consultation with your peers, it’s possible to get to the bottom of the objections. Once this has stage been completed, the objections can often be dispelled with the facts presented in this whitepaper, and elsewhere.


HIGH LEVEL OF CUSTOMER SERVICE

EFFECTIVE COMMUNICATIONS

HIGH LEVEL OF EMPLOYEE ENGAGEMENT

STRONG EXECUTIVE LEADERSHIP

EFFICIENT PRODUCTIVITY

CONTINUOUS QUALITY IMPROVEMENT

ABILITY TO INNOVATE

STRONG SALES AND MARKETING CAPABILITIES

80

73

71

71

68

59

59

58

%

Predictors of Business Success

100 20 30 40 50 60 70 80

2 https://hbr.org/resources/pdfs/comm/achievers/hbr_achievers_report_sep13.pdf 3 https://www.youtube.com/watch?v=-_WgV-f5Mv8

Source: Harvard Business Review Achievers Report2

There are seven key areas that help build the case for flexibility in an organisation, many of which demonstrate a measurable, and direct link to increased profitability.

The business case for flexibility 3

1 Proven increase in employee engagement

Flexibility has been proven to increase employee engagement, one of the top predictors of business success according to Harvard Business School2.

In Australia, Mirvac was able to increase engagement levels by 20%3, simply by implementing a flexible working program for all employees.

Flexibility = Engagement = Productivity


4 http://www.forbes.com/sites/kevinkruse/2014/01/07/employee-engagement-the-wonder-drug-for-customer-satisfaction/#4a54984129815 http://www.samsung.com/au/business/resources/activity-based-working-whitepaper.pdf6 http://www.workflexibility.org/take-five-stanford-economist-nicholas-bloom-business-case-telecommuting/7 http://www.samsung.com/au/business/resources/activity-based-working-whitepaper.pdf

Employee engagement also has a direct impact on customer satisfaction, and productivity4.

A seemingly obvious result of a more engaged workforce, is a more productive talent pool as demonstrated by a wide body of research.

In Australia, Telsyte5 reported a 16% increase in productivity thanks to increased engagement, while in the US a Stanford University study6 showed a 13% increase, and AMEX7 saw an incredible 43% increase in productivity. All as a direct result of a high engagement.

Growth

Profit

CustomerSatisfaction

CustomerLoyalty

Productivity

Service

RetentionEMPLOYEEENGAGEMENT


2 Significant reduction in costs

When a flexible working program is implemented properly, with the right tools to really make it work, an organisation will see a reduction in costs in a number of areas.

Real estate

When more people are working from home, organisations don’t need as much office space – which can lead to a reduction in real estate costs.

With hot desking being more prevalent in most flexible workplaces, ‘desk move’ requests are significantly reduced too, allowing IT time to focus on more critical tasks.

Disaster recovery

As employees can already work from anywhere, anytime, business continuity & disaster recovery plans are less complex. Alternative offices are not the burning platform they once were, and with the right technology already in place, disasters are not what they used to be.

Absenteeism

This costs Australian businesses roughly $3,000 per employee, per year11, and can easily be reduced with flexibility.

After implementing flexible working arrangements, Microsoft12 saw sick leave reduce by 40%, and the American Management Association13 reported a 63% reduction in unscheduled absences, across a number of organisations implementing a range of flexible practices.

Attrition reduction

It makes sense that when people are content in their roles, they’re likely to stay, and once again the research backs this up.

A Stanford study14 saw a 50% decrease of attrition when employees could work from home, and a recent Australian study by the Diversity Council15 showed that 18% of all staff, have considered leaving because of a lack of flexibility.

CISCO8

37

REAL ESTATE COSTS

MICROSOFT9

30

REAL ESTATE COSTS

JONES LANG LASALLE (JLL)10

20

REAL ESTATE COSTS

20

ENERGY CONSUMPTION

20

INFRASTRUCTURE COSTS

% REDUCTION

REDUCTION IN COST

% REDUCTION

% REDUCTION

% REDUCTION

% REDUCTION

100 20 30 40 50

Real Estate Costs Reduced by Flexibility

%

8 http://www.cisco.com/c/en/us/about/cisco-on-cisco/collaboration/connected-workplace.html 9 http://www.managementexchange.com/story/microsoft-netherlands10 http://www.jll.com.au/australia/en-au/Documents/jll-au-activity-based-working-2012.pdf11 http://www.dhs.net.au/insight/2015-absenteeism-survey/12 http://www.managementexchange.com/story/microsoft-netherlands13 http://globalworkplaceanalytics.com/resources/costs-benefits14 http://www.workflexibility.org/take-five-stanford-economist-nicholas-bloom-business-case-telecommuting/15 https://www.dca.org.au/News/News/Findings-of-DCA’s-major-new-study-into-the-attitudes-of-Australians-at-work/60


%

CURRENTLYUSING

HAVE NOTUSED

FLEXIBILITY MODELS

CURRENTLYUSING

HAVE NOTUSED

FLEXIBILITY MODELS

Women Empowered by Flexibility

%57 51 53 43

3 Greater gender diversity & inclusion

Although it can help men and women, women are generally responsible for more primary care giving, and therefore more in need of flexible working arrangements to help return to the workforce. Once again the statistics show this to be true, and Australia wide, more women have made a request for flexibility than men (58% vs 43%)16.

When implemented across the board, flexibility allows men to participate more in caring responsibilities too, further enabling women to take on more challenging roles.

Flexibility empowers women

Flexibility not only helps women return into the workforce after child birth, but it empowers them too. Women working in a flexible business are three times more likely to recommend it as a good place to work, and just as likely to say it’s a place where women can progress to senior levels17.

As demonstrated below, Bain18 reports that in flexible organisations, there is a 6% increase in women’s confidence to become a senior leader, and a 10% increase in aspiration to become a senior leader.

Gender diversity makes a business more profitable

Apart from just being the right thing to do, greater gender diversity makes a business more profitable. Senior executive teams with higher levels of gender equality have consistently outperformed those with less female participation.

For example, in a global McKinsey study, businesses with greater female representation at the Board level, demonstrated a 53% higher Return on Equity, and 14% higher EBIT.19 Similar results were shown by Catalyst in a study of 353 of the Fortune 500 companies20.

Source: The power of flexibility boosting gender parity, Bain18

In short flexible work practices are a way to get more women meaningfully engaged in the workforce, to the significant benefit of the bottom line.

Flexibility = Gender Diversity = Profitability

Flexible work practices also preclude the need to travel every day, making it much easier for disabled employees, and those battling physical or mental health issues to remain actively employed.

“I am confident I can become a senior business leader”

“I aspire to be a senior business leader or executive.”

16 Australian Work Relations Study 2014, Employee Relations Survey. Base = 3,057 enterprises17 http://www.bain.com/Images/BAIN_REPORT_The_power_of_flexibility_Boosting_gender_parity.pdf18 http://www.bain.com/Images/BAIN_REPORT_The_power_of_flexibility_Boosting_gender_parity.pdf19 http://www.mckinsey.com/business-functions/organization/our-insights/is-there-a-payoff-from-top-team-diversity20 http://www.catalyst.org/system/files/The_Bottom_Line_Connecting_Corporate_Performance_and_Gender_Diversity.pdf


7 Increased innovation

Starting a new business has never been easier. Websites can be built for free, with no technical knowledge, and the cost of entry into many markets is much reduced.

Innovative individuals can, and do, simply drop out of corporate Australia to set up on their own. Often selling their services back to the organisations they’ve just left!

The rise of the ‘mumpreneur’ phenomenon certainly demonstrates an opportunity missed.

When women leave the workforce to have children, and can’t return because of a lack of flexibility, these ‘entrepreneurial mums’ are establishing and building their own successful businesses instead.

Flexibility allows people to create a better work life balance, reducing the impetus to leave and easing the return to work, preventing a brain drain from the corporate world.

4 Easier to attract and retain top talent

The big end of town, such as Telstra, ANZ and Westpac are all offering flexibility, while the tech and start-up worlds are miles ahead in this regard. Businesses that don’t adapt, will soon be left with the bottom of the talent pool, and will suffer the consequences.

5 Stress reduced and time regained

As our cities become larger and more congested, hours of productivity are lost to commutes, and as employees rush to maintain schedules, stress levels are increased. Flexibility removes all of that, giving people more time to work and more control over their lives - increasing their general well-being too.

With less travel involved, the organisation’s carbon footprint is also reduced, and the geographical reach for hiring talent, is increased.

6 More efficient communication

Tools that deliver flexibility have the added benefit of increasing the efficiency of communication. There are fewer meetings, for example, as employees are more critical in evaluating the need for a face to face. And when they are scheduled, people are better prepared as they’ve probably driven to work specifically for that purpose.

Greater familiarity with video conferencing technologies also reduces the need for interstate and overseas travel, and global expansion is eased, as people can more comfortably build relationships and collaborate over long distances.


“Technology now allows people to connect anytime, anywhere, to anyone in the world, from almost any device. This is dramatically changing the way people work, facilitating 24/7 collaboration with colleagues who are dispersed across time zones, countries, and continents.”

Michael Dell, Chairman and CEO of Dell Corporation

With all of that in mind, the objections identified earlier may be easier to address.

Addressing the objections 4

Objection No.1

“It’ll cost too much to implement.”

A lot of the technology required to implement flexibility may already be in place.

Remote access for a mobile workforce is almost a given now, with sales and service people able to connect, and stay in touch while on the road, interstate and overseas.

Other flexibility ‘enablers’ like cloud computing are often being driven by other business necessities too, such as disaster recovery solutions. This helps spread, or negate the cost in that regard.

One study of Australian business saw an additional cost of only 7% per head to implement21, with a return on investment of an average of 15 months22. Not a bad investment at all, considering all the other benefits that come with it, and the profits that increase thereafter.

And if an organisation fails to comply with the Fairwork legislation mentioned previously, by not providing flexibility in response to a reasonable request, it can be fined $54,000.

Roy Morgan was recently fined $72,000 for making a worker redundant23, when she returned from maternity leave and asked for flexible working arrangements.

This objection can often be turned into “how much it will cost not to implement.”

21 http://www.samsung.com/au/business/resources/activity-based-working-whitepaper.pdf22 http://www.samsung.com/au/business/resources/activity-based-working-whitepaper.pdf23 http://www.afr.com/news/companies-warned-on-sacking-mothers-20160728-gqfk2g


CUSTOMERRATINGS PROFITABILITY

21%22%10%

PRODUCTIVITY

HIGHER

TURNOVER ABSENTEEISM

37%40%

LOWER

Employee Engagement Drives Business Growth

Objection No.2

“Employees will take advantage and productivity will drop.”

Research would suggest the contrary. In addition to the evidence already presented, a recent study examining a large body of evidence24 clearly shows the business benefits of flexibility. We’ve already shown that flexibility leads to engagement, and the results below demonstrate that organisations rating highly for engagement, significantly outperformed those with lower levels.

Flexibility = Engagement = Performance.

Objection No.3

“How can I manage staff when they’re not in front of me?”

This concern comes up a lot, and all that’s required is training, and support. Managers need to know how to set clear and measurable outcomes, and they need to communicate effectively, and often. For their part of the bargain, employees need to communicate regularly, and they need to be transparent in everything they do.

Depending on the prevailing culture of the workplace, this may take a bit of getting used to.

For example, if management leans towards McGregor’s Theory X way of thinking, where it’s assumed that people are naturally lazy, and will avoid responsibility whenever possible, then more training and support will be in order.

However if McGregor’s Theory Y is more dominant, where it’s assumed that employees are happy to work, self-motivated and goal driven, then coaching may be all that’s needed.

“All of this will lead to a more productive workforce, and a more profitable business.

Begin the discovery and consultation process now, and you’re one step closer.”

24 http://www.gallup.com/businessjournal/163130/employee-engagement-drives-growth.aspx

Source: Gallup Business Journal24


The business case for flexibility is sound. The technology required to make it happen, is all around us. And the rewards for those who transform their businesses effectively, are tantalisingly close.

Conclusion 5

Organisations that implement a ‘flexible work’ policy just because they have to however, will only see the costs involved, without realising the true benefits of a fully engaged and flexible workforce.

If you can achieve buy-in from your executive peers though, train your staff accordingly and have leadership demonstrate visible role modelling – then the good news is, you’re half way there.

The cultural shift towards a more trusting environment will also make managing people easier. Clearer metrics are used for evaluation, and success is linked directly to outcomes, as opposed to effort, or, how frequently someone is sitting at their desk.

If you implement flexible working practices effectively in your organisation:

- You’ll be able to attract the most intelligent, and innovative individuals in the market.

- You’ll be able to fully engage them in their roles, reduce stress levels and increase focus.

- You’ll increase gender diversity and improve decision making in the organisation

- You’ll reduce the turnover rate, and the cost of recruitment.

- You’ll reduce the cost of real estate, absenteeism and disaster recovery.

Flexibility is not an employee perk anymore, it’s a strategic priority.


autopia.com.au

Juggle Strategies

Juggle Strategies is a consultancy that specialises in helping organisations to successfully implement flexible work practices. Regardless of how far organisations have progressed their flexibility strategy, or even if they haven’t addressed it at all, Juggle Strategies works with their client to understand the current state, develop a tailored change program, and implement it. Flexibility should be a strategic priority for every business, as it delivers real bottom line improvements, increases employee engagement and diversity, and Juggle Strategies is a key partner in delivering on those outcomes.

Autopia

Autopia is a financial services firm specialising in novated leasing for the Australian corporate sector, and is part of ASX-listed Smartgroup Corporation. Through specialisation, consultation and technological innovation, Autopia delivers

“Intelligent Car Ownership” to hundreds of organisations and thousands of drivers all over the country.

‘Re-Think’: The Way We Work The Re-Think concept is based on challenging convention. It started with our partnership with UN Women, focusing on the issue of Gender Equality, and has evolved into a range documents that help us re-examine the workplace.

“If you have always done it that way, it is probably wrong.”Charles Kettering, Head of Research, General Motors, 1920 - 1947