Andrew Hebden: Flexibility is key to cost cutting

I wrote in this column last week that the scourge of unemployment was perhaps the greatest evil of any period of recession and that we needed to do more to mitigate its impact, particularly among the young

A person walking past a job centre
A person walking past a job centre

I wrote in this column last week that the scourge of unemployment was perhaps the greatest evil of any period of recession and that we needed to do more to mitigate its impact, particularly among the young.

While it will come as no consolation to the many currently out of work, one welcome characteristic of the downturn which we are now (hopefully) emerging from has been how employment has generally proved remarkably resilient.

Economists have several theories as to why this may have been the case, but there's no doubt that the flexibility of the British workforce has been an important contributor. For example, the rise in part-time working – whilst not welcomed by all – has undoubtedly helped keep some people in a job who otherwise may have faced unemployment.

The reason businesses have been able to do that is because flexible working can help companies to control their cost base. A recent report from the Agile Future Forum, a business-to-business initiative founded by 22 companies and chaired by Lloyd's Banking Group's Sir Win Bischoff, makes the business case for workforce agility. Drawing on CBI research, it says firms can save up to 13% of their workforce costs by embracing more sophisticated agile working.

And it's not just about cutting staff hours. One example highlighted is the benefits of multi-skilling staff so they can fulfill multiple roles and know the business and its products better. It might mean introducing easy-to-use digital tools to encourage communication in the workplace, as ITV’s five-year Transformation Plan does. Or, as IT solutions company Cisco has done, using office space more innovatively to save on operational costs.

This is agility in practice and it has real benefits for business. Better matching the workforce to fluctuations in demand, as a way of meeting customers’ expectations and avoiding low productivity is another.

Take, for example, KPMG’s Flexible Futures scheme, which offered employees and partners the opportunity to reduce working hours on a temporary basis. More than 85% opted to join. Some 2,200 benefitted in the first 11 months, changing their work-life balance and finding ways of working that motivated them. As a result KPMG in the UK saved £4.7m in a time of recession.

But agility isn’t just about saving money. It can lead to increased employee engagement and the retention of talent, whether that is women returning from maternity leave, employees mixing work and study, or staff phasing their retirement.

The challenge? Making sure that these models match both business and employee needs; finding the happy medium which works for everyone.

This is what the Agile Future Forum report will help businesses to do. The business case for agility in a changing world economy is clear. Businesses now need to follow Sir Win's lead to ensure they are not left behind.

:: Andrew Hebden is Assistant Director CBI North East

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