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Don’t fire staff, make them flexible

Reduce your cost base, not your staff count.
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What this piece gets at: there are many options to consider before letting someone go. A flexible working arrangement is one of the best solutions.

A surprising fact before we get started: despite the economic landscape, wages are currently rising in real terms.

News broke earlier this week of the UK’s dire unemployment situation. The number of people on payroll nationally is now 726,000 lower than pre-pandemic levels, amid the biggest rise of joblessness since the financial crisis. Overall, 1 in 20 Brits are now out of work, and the trend has hit young people particularly hard, with almost 60% of the rise accounted for by those younger than 25. 

It’s not all doom and gloom.

However, the vaccine rollout may have given business confidence that income will pick up through Spring, putting them off further dismissals and there is evidence that the rate of redundancies is slowing. Still, much of this resilience can be chalked up to the government furlough scheme, without which there would have been a far greater number of layoffs.

For companies that need to save on payroll, there is one crucial question: could you have reduced those costs without letting people go? And could this have been achieved through flexible arrangements?

In some instances, the answer may be a resounding ‘no’. For struggling high street businesses with thousands of on-the-floor employees, reducing staff count may be the only way of avoiding liquidation. 

However, for other sectors, particularly the services sector, flexible work could well be a silver bullet

The boon of flexible work

  • Employment costs: by hiring your staff flexibly you could save a huge amount on recruitment costs, National Insurance, benefits and other legal obligations.
  • Rent and overheads: by having people work from home, you can downsize or eliminate office space and energy costs. 
  • Greater productivity: swathes of evidence shows that flexible people are happier and work better. It’s not just companies on a four day week that stand to benefit, but everywhere that remote working and flexible hours and effectively implemented.
  • Part-time: simply put, people who are with you for 2 days a week cost half those that are with you for 4. Wouldn’t you rather have an exceptional candidate 2 days week for the same cost as a less experienced full-time candidate?

On the employee side of things, there are countless upsides too — parents being more able to fulfil their childcare obligations for example. 

There are also benefits in terms of diversity and inclusion because flexible working can open up roles to people that might usually have been excluded due to a number of circumstances – disability, geography or other commitments to name a few. Employers now have a real opportunity to access a more diverse talent pool and should grab this opportunity with both hands.

Of course, employment can offer workers vital job security; the case of Uber starkly demonstrates how companies can take advantage of the loop holes of employment. This kind of arrangement is obviously not what we are advocating – we support companies in hiring, onboarding and paying flexible staff in a fair and easy way for both parties.

What we are suggesting is that employers should choose to offer their staff mutually beneficial flexible arrangements rather than fire them. The benefits are undeniable, and it’s time for more employers to recognise this and act on them.

For more on this topic, take a look at our piece on the differences between self-employed and permanent staff.

Toby Douglas-Bate

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