The true costs of flexible working

The hidden costs of flexible working

Staff are usually keen to work flexibly, but employers should be mindful
of the tangible and intangible costs they incur as a result
Written by The Economist Intelligence Unit

T

echnology has unlocked all manner of novel ways to work, from
working at home to hot-desking at the office, from sitting in a
café using a laptop to answering emails on the train.
Employees are generally keen to take advantage of these new working
styles, as they allow them to work when they want to and manage their
work-life balance more effectively.
There are ample benefits for employers too: flexible working can
engender a happier, more engaged workforce, and people who are
prepared to work when required, not just when they happen to be in the
office. There are also savings to be made, as employees voluntarily use
their own devices and communications services to complete their work.
But neither employers nor their staff should pursue flexible working
without being mindful of the hidden costs – both tangible and
intangible – that are passed on to the employee.

Paying from home
The equipment required to perform typical office work can now
be found in most UK homes. According to the 2013 Communications
Market Report by Ofcom, the independent regulator and competition
authority for the UK communications industries, 79% of households
have at least one desktop or laptop PC, and 80% are connected to
the Internet.

With the necessary equipment already in place, employees are rarely
concerned about the initial cost when they are given the opportunity
to work from home.
“For the employee it’s an acceptable trade-off,” explains CIO-turnedleadership consultant Ian Cox. “They get the flexibility of being able
to work where they want, which also removes the time, cost and hassle
of commuting.”
However, other home expenses can become a bone of contention,
especially when flexible working is thrust upon employees as part of
a cost-cutting drive, according to Dr Alexandra Beauregard, assistant
professor of employment relations at the London School of Economics.
At one organisation which Dr Beauregard has studied in detail, homeworking staff found they were spending significantly more on heating
and electricity than when they worked in the office, by virtue of being
at home for more hours in the day.
“There have been complaints from individuals working from home,
because they weren’t being compensated for the extra heating and
electricity costs,” she explains. “Organisations are going to have to put
more thought into compensating individuals for these expenses.”
It is not obvious how exactly companies should do that – how much of
the heating bill should they cover? But there are plenty of precedents.
“If employees use their own cars to drive to a meeting, there are
established rates for reimbursing them,” Dr Beauregard observes.
“Going forward, paying household costs will become more expected.”

Intangible costs
There is more to flexible working than simply working from home, and
companies that support alternative approaches must be aware of the
intangible costs that employees incur.
For example, “hot-desking” – where employees do not have a fixed
desk and computer but use shared facilities when required – is an
increasingly popular strategy among employers, often in combination

with some home working, as it reduces the number of desks and
computers they have to provide.
However, according to Dr Beauregard, hot-desking policies can place a
psychological burden on staff. “Research is coming out which suggests
that not having a regular workspace can be detrimental to staff and not
optimal in terms of productivity,” she explains.
Work may change every day, but having a consistent space, surrounded
by the same people, gives employees a sense of certainty in the
workplace. Furthermore, having to compete with fellow employees
to get the best desk or the best computer every morning could be an
unnecessary stressor.
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“People don’t deal with uncertainty very well, and there are some
things we want to be able to rely on,” she explains. “Hot-desking adds
another element of uncertainty to the working day.”
She adds, though, that there are ways to manage hot-desking policies
to make them more predictable, such as the option to book desks
in advance.

A suitable environment
Pervasive wireless networking and the growing sophistication of
mobile devices mean that flexible workers can set up shop anywhere.
Some people who like to be surrounded by human activity may choose
to work in a nearby café, using their laptop and a WiFi connection.
A potential issue with this, Dr Beauregard says, is that cafés are not
designed to be working environments. “Cafés are rarely ergonomically
correct in terms of seating and posture,” she explains. “If you are sitting
there for an hour or two, it’s fine, but if you are there, hunched over

your laptop for several hours, it can be damaging in the long term.”
If an employee has requested the right to work flexibly, then their
posture is their own responsibility – in a café, at home, or anywhere
else. But if their organisation has mandated flexible working, then it
may be obliged to check that employees are working in safe conditions,
just as it would for office-based staff.
Another potential hazard of flexible working – and one that is contrary
to the prevailing stereotype – is the risk of employees working too

much. “One of the most robust and consistent findings about flexible
workers is that they tend to work longer hours,” explains Dr Beauregard.
There are a number of possible reasons for this. First, when the office is
in the home, it can be harder to disconnect. “When you leave the office,
you’ve made a transition out of work. But at home, that transition is
just walking down the hall, and it’s easy to walk back down the hall and
return an email, or pick up your voicemail. It’s difficult for some people
to switch off.”
Another reason is that employees are so grateful to be able to work
flexibly—and are usually aware of the stereotype that they will sit in their
pyjamas watching TV instead of working—that they overcompensate.
Again, it is not the employers’ responsibility to ensure that their staff
conform to a particular work-life balance, Dr Beauregard says. “But it
is their responsibility to make sure they are not placing undue pressure
on employees to work longer hours.”
“Employees want flexible working in order to improve their work-life
balance,” she explains. “But in some cases, they may be working harder
for longer hours because they feel the need to pay the company back.”
For now, flexible working initiatives are likely to be met with nothing
but enthusiasm from employees. But as with any major changes, there
are cons as well as pros, and forward-thinking organisations will

pre-empt the drawbacks before they become significant
management issues.