Reaching a positive financial return on investment in flexible working
Fair flexible futures #3
This report explores the scale of benefits needed to deliver a positive financial ROI on increasing flexible working in frontline sectors. It draws on the findings of five pilot studies by Timewise, conducted in retail, construction, social care, teaching and the NHS. It addresses the evidence gap on flexible working ROI, providing the impetus for employers and policymakers to prioritise investment in changes to working patterns, for the benefit of business, the individuals they employ, and society as a whole.
IES investigated the costs and outcomes of the five pilots, and estimated how long it takes before flexible working interventions become profitable. The findings show that within just a couple of years, investment in flexible working interventions can outweigh the costs and begin to deliver financial returns in the form of savings made through reduced sickness absence and reduced staff turnover.
Results of the break-even analysis
- In retail, for a store with 200 shopfloor sales/retail staff including supervisors, the costs of the flexible working programme would be recovered within three years by a reduction in sickness absence of 16% per year. This equates to a reduction of 0.8 sick days per person per year. Alternatively, staff turnover would need to reduce by just 5% per year over 3 years, equating to four fewer leavers per year.
- In adult domiciliary care, for an organisation with 200 domiciliary care staff, break-even would be reached within 3 years by a reduction in sickness absence of 29% (1.2 days per person) per year. Alternatively, a 7% reduction in staff turnover per year would balance the costs over 3 years (five fewer leavers per year).
- In construction a site with 200 construction staff would require a reduction of one sick day per person per year (over 3 years) for the pilot to break even. Alternatively, a reduction in staff turnover of 11% per year over 3 years would do the trick (equating to 7.5 fewer leavers per year).
- In teaching, Multi-Academy Trusts (MATs) with 100 teaching staff would require an average of one fewer sick day per teaching staff member per year in order for the programme to break even over three years. Alternatively, just one fewer leaver per year over three years would see the pilot breaking even.
- In nursing, for 306 staff across 9 wards, a reduction in sickness absence of 0.8 days per person per year (over 3 years) would render the programme cost neutral. Alternatively, the reduction needed in staff turnover is 18 fewer leavers per year (out of the 46 who would usually leave).