Recent research by NatWest Mentor highlights the evolving attitudes of small and medium enterprises (SMEs) towards flexible working following legislative changes introduced earlier this year.
The findings show that 81% of SME leaders anticipate positive impacts from the new rules, which allow employees to request flexible working from the first day of employment.
Under the new legislation, which took effect in April 2024, employees in England, Scotland, and Wales can submit two flexible working requests annually. Employers are now required to respond within two months, compared to the previous three-month period, and must provide written explanations for refusals.
NatWest Mentor surveyed 500 SME decision-makers across diverse industries to gauge the impact of these changes. The results reveal optimism among leaders, with 38% predicting increased productivity, 34% expecting improved employee retention, and 24% highlighting better access to diverse talent as a significant benefit.
Flexible Working Policies Already in Place
The research indicates that many SMEs had already adopted flexible working practices prior to the legislative changes. Nearly three-quarters (73%) of surveyed businesses reported having some form of flexible working policy in place, and 63% of employees had previously made flexible working requests.
Beyond flexible working, SMEs have introduced various measures to enhance employee well-being and satisfaction. Initiatives include mandatory lunch breaks (29%), access to wellness apps (20%), and employee assistance programmes (19%). Other benefits, such as subsidised food, private healthcare, and gym memberships, were also noted.
Dawn Smith, Senior Employment Law & HR Consultant at NatWest Mentor, emphasised the potential advantages of the new legislation: “A well-managed flexible working policy can boost morale and productivity, lower operational costs, and create a recruitment advantage in the market. While not all requests may be feasible, it is crucial for businesses to review options and ensure compliance with legal requirements.”
Challenges in Implementation
Despite the anticipated benefits, SME leaders acknowledge the challenges associated with implementing flexible working policies. These include balancing operational needs with employee requests and ensuring all requests are assessed fairly on a case-by-case basis.
Smith added that fostering open communication between employers and employees is vital for navigating these challenges. Offering alternatives or trial periods where requests cannot be fully granted can help find mutually beneficial solutions.
Broader Workforce Implications
The new legislation reflects a broader shift in the UK’s workforce, with flexible working becoming a key consideration for both employers and employees. The ability to request flexible arrangements from day one of employment is expected to influence recruitment strategies, as businesses seek to remain competitive in a changing labour market.
As SMEs continue to adapt, awareness and education about the legal requirements of flexible working are crucial. Ensuring management and employees understand their rights and responsibilities under the legislation will be key to successful implementation.
