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Transforming the Workplace Q2 2023

Labour shortages are here to stay: how can flexible working help?

Man working on a computer from home
Man working on a computer from home
iStock / Getty Images Plus / Poike

Alexandra Hall-Chen

Principal Policy Advisor, Institute of Directors

With more people taking early retirement and altered migration patterns since Brexit, the UK is facing a long-term shortage of workers. How can flexible working help? 


From Elon Musk ordering Twitter employees back to the office to Jacob Rees-Mogg leaving cards reading ‘Sorry you were out when I visited’ on civil servants’ desks, the media seems awash with examples of bosses pushing employees to get back to the office. But what is really happening?  

Flexible working is here to stay in the UK 

Institute of Directors (IoD) research, last year, found that 8 in 10 business leaders plan to offer their employees some form of remote working. For some, this consists of one day per week working remotely. For many, it takes the form of giving staff full choice over where they work (27%) or the organisation operating via full-time remote working (13%). 

The key driver behind this is simple: organisations that fail to offer flexible working will struggle to recruit and retain talented employees. Flexible working represents a way for employers to attract groups traditionally on the edge of the labour market. Research from Working Families, for instance, found that 9 in 10 unemployed parents would be likely to apply for a role that listed flexible options. 

By thinking innovatively about less common forms of flexible working — such as compressed hours, flexible hours and job shares — employers can improve their employee value proposition in a competitive labour market. 

Organisations that fail to offer flexible working will struggle to recruit and retain talented employees.

What does innovation in flexible working look like? 

CMG Technologies, a manufacturing company in Suffolk with 35 employees is one example. In 2015, they introduced a four-day week to improve staff wellbeing and retention. It has led to extremely strong staff retention and increased staff motivation and productivity, such that lead times shortened as teams optimised manufacturing processes.  

Or take Hana Group, a food producer with over 700 employees in the UK. Since the nature of the company’s work means that most staff cannot work remotely, they introduced early morning and later morning shifts. This allows staff to, for instance, drop children off at school before coming to work. They also introduced an app which displays employees’ working hours and allows them to swap shifts without requiring permission from managers.  

These initiatives are dispelling the myth that flexible working only benefits office workers. More employers must think similarly about how they can offer flexibility to attract and retain workforces to help them thrive. 

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