MEETING EMPLOYER AND EMPLOYEE NEEDS FOR FLEXIBILITY AT ENGCOPLC: THE CASE OF SMART WORKING CLARE KELLIHER AND DEIRDRE ANDERSON
EngCoPLC is a large UK-headquartered engineering company which operates on a worldwide basis. It is structured into four main divisions and employs in the region of 39,000 people, located in 50 countries across the globe. Approximately 60 per cent of their workforce are located in the UK and are distributed across eight main sites. The company’s workforce is predominantly male (only about 15 per cent of the workforce is female) and most are employed on a full-time, permanent contract. The majority of employees work a traditional 39-hour week, based around standard working times. Many employees have long service records and a significant proportion have never worked for any other employer. Here we examine the implementation of a new policy on flexibility, Smart Working, at one of the UK workplaces. In recent years the company has become more concerned with the diversity of the workforce and has introduced a number of policies designed to attract a broader spectrum of employees.

There has also been a growing recognition of the importance of work–life balance to employees and the need for the company to respond to this. As such they introduced a flexible working policy a few years ago, allowing employees to request flexible working arrangements (reduced hours, remote working, different hours, etc.) in order to help them deal with the needs of their work and non-work lives more effectively. The nature of the company’s business means that there are ‘ebbs and flows’ over time in the level of activity throughout the company. Historically, this had tended to mean that the company used significant amounts of overtime working, in order to accommodate the ‘peaks’ in activity. (Beyond this, some commentators suggested that evening and weekend overtime had become institutionalised in parts of the company and this represented a significant cost for the business.) However, in addition to the peaks, there were also ‘troughs’ in activity and during these quieter times employees, although present during normal working hours, were less occupied and therefore less productive.

In an attempt to reconcile these variations in workload and reduce the cost of overtime, the company developed a new policy, Smart Working, which was also designed to give employees more control over their working time and help them improve their work–life balance. The principal aim was to achieve greater flexibility and efficiency by moving from an environment which was attendance driven, to one with an emphasis on performance delivery. This was seen as central to the company’s strategy and acceptance of this new way of working was tied to future investment at the UK sites. The policy had been agreed with the trade unions representing the workforce and was being rolled out across the UK. It was designed to reduce overtime costs by scheduling employees to work additional time at peak periods, but rather than paying them for this time, they would be able to recoup it at other less busy times. TOIL (time off in lieu) accounts were set up for employees so that a record would be maintained of time owing to each employee and which could be taken off at a later date. Recognising that the end of regular overtime would result in an income loss for some employees, the policy was introduced alongside a six per cent pay increase. This was seen by some as effectively incorporating overtime into basic pay. In essence, Smart Working allows managers to match the supply of labour more closely with current workload. In practice, managers agree output targets with employees or in some areas with self-directed work groups, for a set period of time. The thinking behind this was to move from a system which was time based to one which is performance based. The employee or work group then decide how the time resources available to them need to be used in order to achieve these targets. If in peak times employees need to work longer than their normal hours and/or needed to come in at weekends, this additional time can then be ‘banked’ and taken off when the workload is less high.

In addition, a flexitime system was introduced which removed the traditional starting and finishing times. Symbolically, this resulted in removal of the buzzer which signified the start and end of the working day across the workplace. The flexitime system is built around core hours (11.30am to 2.30pm) when all employees are required to be at work, but outside of that employees can choose start and finish times and these can be varied according to individual employee preferences. In order to launch this new approach to working a series of training events was set up both for managers and for employees to help them understand the working of the scheme and how it was being implemented. On the whole, employees reported that they understood the scheme and that the regulations governing how it worked were clear. There was also a general view that it had been implemented fairly. The trade unions, who were involved in negotiating the agreement, also monitored its implementation to ensure that it was being run fairly. Smart working in practice Flexibility over working time Perhaps inevitably, views about how well it had worked in practice varied across the workplace. Many employees indicated that the opportunity to stagger start and finish times had been very useful to them. They welcomed the opportunity to accommodate non-work activities in their lives more easily by exercising some flexibility over working time. In essence, this type of scheme made it legitimate not to be at work outside of the core hours. In addition, the workplace was located close to a busy road network and there was often considerable congestion in the area. Having some flexibility over working time meant that employees could choose to travel at different times and avoid the stress of being stuck in traffic and not knowing whether they would make it to work on time. Some work teams at this workplace liaised closely with their counterparts in North America and in India on a regular basis.

Managers in these business areas indicated that they had encouraged employees to adopt different working times, since it meant they then had greater overlap with colleagues in different time zones – those who started earlier had a longer overlap with the working day in India and those who worked later had a greater overlap with North America. However, as a result it was acknowledged that internal meetings had to be concentrated into core hours, in order to secure maximum participation. Nevertheless, some employees did suggest that in spite of the introduction of the new policy, many managers in the company had retained a traditional view of working time. Although in theory Smart Working made it legitimate not to be at work during traditional working hours, it was reported that some managers and co-workers, particularly those with long service records were still in a ‘nine to five mindset’ and had not adjusted to the new approach. This resulted in some people feeling uncomfortable if, for example, they left the workplace early. One employee reported that if he wanted to leave work early he felt more comfortable leaving at 3pm, rather than, say, 4.30pm because at 3pm many people assumed that he would be going to an off-site meeting rather than going home. This mindset of nine to five working was felt to be unattractive to younger recruits and would impact on their retention.

Some managers reported that they preferred having their employees work a regular working pattern, even if they worked at different times. As one manager explained variation in hours could make planning more difficult, If you come in at half eight and then you come in at half eleven the next day, you might work your hours, but for someone trying to manage the team, there is a three hour difference between the two. Working extra time and banking hours For some employees the Smart Working policy worked well and they were able to take TOIL at times that suited them, often for family and home related activities. However, in certain parts of the business, the greatest concern expressed by employees was the lack of opportunity to take back any additional hours they had worked, since, as they saw it, the troughs never happened. Some indicated that their contracted hours were insufficient to achieve the required workload and as a result there few opportunities for employees to take back time and attend to non-work activities. The seemingly constant number of ‘rush jobs’ meant that arrangements for greater flexibility could not always be honoured. In the longer term, some employees reported that this discouraged people from putting in extra hours when workload was high, since they did not see the opportunity to take the time back. Managers acknowledged that there were some employees who had a large number of banked hours. Although described by a senior director of the company as ‘delivering a better work-life balance for employees and higher productivity levels when workload drops’, there was some cynicism about whether or not the scheme really contributed to work–life balance in practice. Where employees were able to take back time it was observed that Friday was a very popular day. Several years ago working time at this site had been adjusted to allow for the working day to finish one hour earlier on Fridays. Thus, Friday was attractive, not only because it extended the weekend but also because employees needed to spend less of their banked time to take a day off. Lower staffing levels, together with people using flexitime to leave early on Fridays was seen to be problematic in those parts of the business that worked extensively with North America.

There was some debate over how working beyond normal hours was, or should be agreed. It was felt that any additional hours should be sanctioned when there was work pressure, or where it made sense to carry on working to complete a job in the working day, but not necessarily agreed when an employee just wanted the opportunity to finesse or ‘gold plate’ a piece of work. There was also discussion about the detail of recording hours and how this worked in the spirit of Smart Working. In some departments there was little formal recording of hours, but rather if extra work hours were needed, then they were done, and then employees took other time away from the workplace to compensate. However, in other situations additional hours were recorded and taken back rigorously. As one employee put it, ‘Every minute is recorded and every extra minute is taken off.’ The general feeling was that this was not in the spirit of the policy since the six per cent pay increase linked to the implementation of Smart Working was seen to be compensation for flexibility over time. Success of implementation was seen as being largely attributable to how individual line managers worked the policy with their staff. The introduction of Smart Working at this site had therefore met with some success, but there were some concerns over its implementation. The company was determined to build on what had been achieved, recognising the need to balance efficiency with a focus on work–life balance and employee well-being.
Questions
1 To what extent do you think employer and employee desires for flexibility can be reconciled by a scheme such as this one?
2 Are there certain circumstances that might make this more likely?
3 As a manager reviewing the introduction and implementation of this policy, what recommendations would you make to move the policy forward?