Report charts economic gains of flexible working

A new report calculates that flexible working contributes £37 billion to the UK economy.

Woman Working From Home Using Laptop On Dining Table


The economic contribution of flexible working to the UK economy is currently £37 billion a year due to factors including reduced absence rates and increased talent attraction and retention, according to a new report which says increasing flexibility could deliver more economic benefits.

The first in-depth report of its kind forecasts that a 50% increase in current flexible working rates could result in a net economic gain of £55bn, alongside the creation of 51,200 new jobs.

The research comes from the report ‘Flexonomics’ published by Pragmatix Advisory and commissioned by Tier One contractor Sir Robert McAlpine and flexible working campaigner Mother Pukka. It is one of the first reports to quantify the true value of flexible working to businesses and the economy as a whole.

It uses a matrix that cross-tabulates employment by industry and occupation and draws on Office for National Statistics figures on employment, current flexible working rate, salaries, total wage bill and Gross Value Added.

Deploying a cautious approach, the modelling focused on the business impacts of flexible working alone, which included implementation costs, reduced absence, lower staff turnover, increased productivity, the contribution of lower-wage inflation over time to business profits  and the cost of replacing staff.

Due to a lack of available data, the modelling did not account for a reduction in government spending on benefits due to flexible working options or the number of potential new employees joining the workforce due to increased availability of flexible working arrangements and the tax and National Insurance contributions of these new workers.

Nevertheless, despite this cautious approach, it calculates that there is a cost of almost £2bn per year to businesses for simply saying no to flexible working requests.

One key focus in the report is the need to better understand the different types of flexible working, not just remote vs office working. Flexible working is defined in the report as ‘any way of working that suits an employee’s needs’. This includes flexible working patterns, workload/hours, workplace and life events. It also looks at industries known to be harder to flex, such as healthcare and teaching, and discusses how these roles could flex to let more people in.

Ahead of the publication of the Government’s consultation into flexible working, which closes on 1st December, the report also makes a number of recommendations for delivering greater flex. These include the need for businesses to be upfront about flexibility in job adverts and the need to increase the data collection on flexible working by the ONS, which will add greater transparency to flexible working with a stronger evidence base and deeper understanding of the benefits of all forms of flexible working. And it also asks for the Government to publish a list of flexible employers, enabling workers to find out which companies are flexible employers before spending time applying for a job.

Anna Whitehouse, Founder of Mother Pukka and Flex Appeal, says: “Flexible working has never been about location. It’s always been about inclusion. It’s about including talent. Talent with caring responsibilities, talent living with disabilities. People who are looking to work in a human – or even humane – way that’s ultimately good for business. Now we can prove that there’s a direct link between flexibility and profitability. That an uptake in flexible working will boost the UK economy, too. If we want to ‘Build Back Better’, now is the time for businesses to use flexible working as the foundation.”

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