Why bosses are banking on freedom - Observer, Sunday March 25, 2001

Flexible working pays in higher productivity - and in parents who don't need to tell lies to get time off. Neasa MacErlean reports...

Staff taking part in Lloyds TSB's flexible working scheme take less time off sick. The bank has yet to quantify the difference between the 2,000 employees taking part in its two-year-old Work Options scheme and the rest of its 78,000 workers, but its spokeswoman and equal opportunities head Sally Evans says: 'It is very clear that they are more motivated and less likely to be absent. Their productivity is better.'

This outcome is repeated across companies that have taken this step. In its well-regarded 'Work-Life Balance Manual', the Industrial Society details case study after case study all pointing the same way. For instance, the AA has found that the 'productivity of teleworkers is, on average, 30 per cent higher than office-based staff', and that 'sickness absence is very low and [work] quality very high'.

These are the major reasons why Lloyds TSB is a leader in the work-life balance movement. Its chief executive, Peter Ellwood, is chairman of Employers for Work-Life Balance (EWLB), a 22-strong group working closely with the Department for Education and Employment to promote flexible working practices. EWLB was launched a year ago by Tony Blair, and its life was extended this month for a second year.

With their huge and heavily female workforces, banks were always likely to be ahead of the field. They estimate that the hidden cost of losing a good senior manager can be £40,000 when you take into account recruitment costs for a replacement, time spent interviewing candidates and the bill for training them. If it was not to lose staff who wanted to start families, Lloyds TSB needed to let them work part-time, share jobs, take career breaks, work only in term time, compress their five-day week into four days or work from home.

But the bank also encourages men to join the scheme. 'More and more people are doing it because they just want a life outside work,' says Evans. 'That means they suffer less stress at work because they are not constantly worried about things outside.' Staff do not have to give a reason for wanting to join the scheme.

Many small businesses already operate flexible working: when you just have three employees, it is fairly easy to let them mix and match their hours and duties. But overall, it is estimated that only one in 10 UK companies allows it.

There is greater interest in the more prosperous areas: the majority of calls to EWLB have come from the South East and central England. The group believes two main reasons hold employers back: lack of awareness of the benefits and lack of know-how.

Authoritarian employers will, of course, be unwilling to believe that people will work responsibly unless they are forced to, and have their work monitored. But the evidence seems to be that, when these schemes are properly introduced, employees generally respond very well to the trust placed in them.

Many parents have felt compelled to tell untruths to their employers, taking time off sick to look after an ill child, for example. Taking away this pressure to lie by giving staff flexible working arrangements seems to produce a far healthier workplace atmosphere.

The UK is actually moving quite fast towards embracing work-life balance. But it needs to do something to tackle the long-hours culture, which means that UK men work the longest hours in Europe, with a quarter of our fathers putting in more than 50 hours a week.

A raft of recent legislation has pushed us this way, such as the right to four weeks holiday, the part-time workers' directive which put them on a par with full-timers and the measures in this month's Budget extending maternity leave and introducing paternity leave.

Employment specialist Matthew Lewis of solicitor Hammond Suddards Edge says: 'People are very careful about dismissing out of hand an employee's request to return to work on a part-time basis.' This reflects a body of case law very favourable to people with family responsibilities. But there is also pressure from younger people for a better quality of life. More than 80 per cent of 18-24-year-olds say they would be more motivated by work-life balance schemes, according to research by EWLB. This compares with 70 per cent of the population as a whole.

And long hours damage lives. In a report published this month, Married to the Job?, the Chartered Institute of Personnel and Development said that in half the relationships where one partner works long hours their sex life is harmed. The report's author, Melissa Compton-Edwards, says: 'Once a lot of university-educated young people have been at work for 10 years, they often think, "There must be more to life than this".

'They find that the vision of climbing up the organisation isn't that fulfilling. In a healthy economy, where skills are in short supply, employers will have to offer more flexible ways of working.'

EmployersforWork-LifeBalance.org.uk or employers helpline on 020 7420 3847.

The kids are alright, but what about Grandad?

When colleagues talk about using flexitime to look after their family, you probably imagine them looking after their children. But we are actually witnessing a boom in 'eldercare'. There are now almost exactly the same number of children under 16 in the UK population as there are over-sixties - about 12 million people in each category.

One in four employees in the US provides more than 11 hours of informal, unpaid care each week for a parent or older relative, according to Ceridien Performance Partners, the work/life balance consultancy. By 2005, Ceridien estimates that one in three US employees will be providing this type and level of care. In the UK, Ceridien says, the current generation of forty- and fiftysomethings are on course to be 'the first-ever generation of employees expected to spend more years responsible for the care of ageing parents than for care of their own children'. Since we are living longer, this should, perhaps, come as no surprise. Information from the Office of National Statistics suggests that there will be 11 million under-16s in 2041 and nearly 19 million over-sixties.

Living longer would not be a problem if those extra years gained were years of good health. But dementia sufferers alone number 700,000 in the UK.

Looking after an elderly person is difficult for someone with a job. In the US, Ceridien says: 'Half of employed carers of the elderly reported taking time off, coming in later, or working fewer hours; 6 per cent stopped working altogether; and 4 per cent took early retirement. In total, at least 50 work hours per year are lost by employed carers.

But now some employers are starting to think about this. Peugeot in Coventry, for instance, runs a daycare centre for the elderly in conjunction with the Motor & Allied Trades Benevolent Fund. It was set up particularly to take care of Alzheimer's sufferers and has capacity for 25 people each day.