Your flexible friend: Can you put a price on happiness?

Can flexible working be both a boon to the bottom line and turn grumbling employees into happy bunnies? Simon Marshall investigates...

One thing immediately noticeable about implementing a flexible working policy is that there's no shortage of statistics telling you what a good thing it is.

Yes, that's right - good for employee morale, productivity and everyone's general sanity. But what exactly does it deliver to the bottom line? For many companies, it's this unanswered question that's keeping flexible working firmly at arm's length.

Mark Hughes, general manager at BT's Workstyle Consultancy, said: "The technology has been well advertised. But the other parts of the jigsaw haven't been communicated so well." In other words, the technology has yet again been oversold.

But with the government's Flexible Working Regulations 2002 Directive coming into effect earlier this year in April, implementing a flexible working policy has become a priority.

"Employees are happier and more comfortable in a more flexible schedule, which may lead to a better quality of work and ultimately more value for money for the company," claims Genelle Hung, market analyst at The Radicati Group. "But the cons may include not having quick access to corporate data or other employees, which may actually reduce productivity and translate into increased financial burden," she says.

Fortunately for those afflicted with this timeless conundrum, a more structured, less fluffy method for assessing ROI is emerging, due partly to pressure on enterprise property management departments to increase efficiency.

"Property costs are a tangible way of building a business case for flexible working," says BT’s Hughes. "It's a starting point that is absolutely irrefutable."

Building a basic picture of property occupancy, efficiency of use, length and type of tenure can also deliver insight into how employees are working. Hughes cites figures from the British Council of Offices that show office utilisation is only ever as high as about 60 per cent and can drop as low as 40 per cent. Reviewing a leasehold to lessen flabby space or reselling freehold square-footage while some staff spend more time teleworking from home saves money.

But the process also shows which staff work permanently on site, which travel frequently between sites and therefore need mobility tools and auxiliary desk space, and which telework from home. BT itself claims to have saved £42m in annual rent and rates since implementing such a policy in 1993 and slashing its London-sited workforce by two-thirds to 3,000.

For on site or mobile staff, relocating either a desk or a person can trim costs and maximise access to applications and telephony. Hotdeskers and mobile staff can now benefits from Wi-Fi access in many areas where traditional desk real estate might no longer be necessary. But the biggest savings can come from those who telework.

"Teleworkers should be really prized individuals, because if they have elected to work flexibly, they are doing the organisation a favour by taking costs out of the business," explains Hughes. But The Work Foundation, formerly known as the think-tank The Industrial Society, says in a September report that managers have to leave behind traditional attitudes that employees cannot be working properly unless managers can see them.

This means enterprises also have to factor their employees' welfare into the financial equation by devising work-life balance programmes that also yield cost savings, even though monitoring the financial benefits here is tough.

"[Evidence] shows that employers that instigate and apply policies that improve work-life balance see bottom-line benefits in their organisations," says Nick Isles, deputy director of advocacy at The Work Foundation.

Equipping and supporting teleworkers should, it seems, be considered an up-front investment in order to achieve longer-term financial benefits. They will need ergonomic furniture, mobile devices, either a laptop or PC, a fixed or wireless broadband connection, specialised client software, dedicated telephony and a multifunction print/fax/copy machine.

IP VPNs, the new kid on the connectivity block, has the potential for service providers to bundle voice and data over the same DSL line at a fraction of the cost of a leased line. Enterprise equipment vendor Avaya, which markets such solutions, claims to have saved £3,500 per teleworker by practicing what it preaches.

Emily Giddings, IP Enterprise Services analyst at Ovum, says: "Enterprises are concerned about parting with budgets, especially in the area of communications. The hurdle for the [suppliers] is getting the enterprises to spend the money in the first place, so many have introduced a 'pay-as-you-grow' model."

Giddings also sees telecoms service providers providing more comprehensive outsourcing packages. For example, BT now provides hardware, devices, software, connectivity, furniture, fault resolution guarantees, a mail box number, a courier and even tax and expense advice.

Whatever the approach - in-house or outsourced - flexible working can offer some softer financial advantages more in line with cost avoidance. For example, mobile working apparently has the sort of panache that attracts employees and holds them within an organisation for longer.

"The HR benefits of mobile working are regularly overlooked," says Maria Lorenz, end-user services manager at Fujitsu Services. "[Our] research shows that mobile working has a tangible effect on the attractiveness of an organisation and can reduce staff turnover." This is no bad thing when the cost of replacing a member of staff can be a significant portion of their annual salary.

Radicati estimates that mobile email access adds an immediate 55 minutes work time per day, but in the end, enterprises must translate these softer benefits into greater profitability through cultural change.

"The first thing we always do is test an organisation's appetite for big cultural change, because it can be a rocky road," says BT's Hughes. "We have to check if a company is up to managing a dispersed workforce because new contracts must be based on output, not simply turning up at the office at nine o'clock every morning."