Staff turnover is a significant issue for many New Zealand businesses. It's disruptive and surprisingly expensive: between hiring, onboarding and training, new team members can take months to reach their break-even point, where the money they bring into the business surpasses the cost of hiring them.
Effective employee retention strategies are key to maximising the growth and profitability of your business. They can also help to create a better atmosphere within the organisation, by enhancing the employee experience and boosting morale.
And flexible working policies form one particularly effective strategy.
In this guide we'll take a closer look at how offering flexible work can boost employee retention, enhance job satisfaction, and develop a company culture that lures in top talent.
What are flexible working policies?
Flexible working policies see you grant your employees the power to adjust their work arrangements, such as hours, location or schedule, to better suit their personal needs and preferences.
Examples of flexible working policies include:
Remote working and work from home (WFH) arrangements
Flexible start and finish times
Compressed workweeks, such as working four (potentially longer) days instead of five
The ability to transfer hours from one week to another
Part-time or reduced hours
Job sharing (two people sharing one full-time role)
Time in lieu/time banking (extra hours worked are compensated with paid time off)
Flexi-breaks that can be taken by the employee whenever suits
Flexible working policies were put in the spotlight during COVID, where a significant percentage of the NZ workforce made a swift transition to working from home. This led many organisations to offer more flexibility in terms of hours, breaks and job sharing too.
The connection between flexibility and staff retention
COVID transformed employee perceptions of flexible work arrangements. For a lot of workers, flexibility is now less a perk than an expectation.
A recent WFH survey of 1000 Kiwi office workers found that:
45% would rethink their employment if WFH flexibility was curtailed.
47% view WFH as a preference, while 38% said a lack of WFH benefits was a "deal breaker".
65% of workers preferred to work 1-3 days from home, showing that office time is still valued.
A similar level of importance is placed on hours. According to Randstad, 81.9% of Kiwi workers consider flexibility in terms of working hours to be important, and around 60% wouldn’t accept a job that could negatively impact their work-life balance
Benefits of flexible working for employees and employers
Ultimately flexible working arrangements are a way to show your employees that they are valued members of your team. And when you treat your employees well, they tend to be more engaged, content, committed and productive.
A two-year WFH study from Stanford University in the US found that employee turnover was 50% lower in home workers than office workers. What's more, employees who worked from home were actually more productive than those working from the office: they were less distracted, took shorter breaks, had fewer sick days and took less time off.
The perks of WFH and flexi-hour arrangements are obvious on the employee side. Workers don't have to worry about wasting an hour or more on a daily commute, and can work around their personal lives however they wish.
And flexible work isn't just an employee retention strategy: the better work-life balance can be a huge drawcard for top talent - a selling point that helps your business acquire the best available workers too.
Implementing flexible working policies: key considerations
You're thinking about offering flexible work arrangements as an employee retention strategy. But before you do, you should take time to consider the form of those arrangements in terms of:
Business needs: How will offering work flexibility help you to improve business performance and reach business goals?
Employee needs: What type of flexible work arrangements do your employees want, and will those preferences present any business challenges?
Legal compliance: What employment laws and regulations do you need to ensure your flexible policies comply with?
Inclusivity: Will the same policies apply to all employees, or do the arrangements need to be tweaked for different roles and responsibilities?
Technology: What tech do you need to implement to ensure that every employee stays engaged, accountable and productive?
Once you've considered these factors and developed an idea of what your flexible working policies will look like, it's time to develop and implement them.
Getting started with flexible work policies
Successfully implementing your flexible work policy is about following established best practices. A basic step-by-step approach might look something like this:
Assess needs and feasibility: Conduct employee surveys and consult with specialists to understand what your policies should look like and how to develop and implement them.
Draft the policy: Define the types of flexibility you'll offer your employees, the eligibility criteria and the application processes.
Start with a pilot program: Start with a trial period to evaluate the effectiveness of the new policies and to identify and fix potential issues early.
Train managers: Provide guidance on implementing and monitoring policies fairly and effectively. Have managers share the policy with all employees, explaining the benefits, expectations and procedures, and mentoring workers on how best to capitalise on it.
Evaluate and adapt: Regularly review the policy based on worker feedback and organisational performance.
Shout it from the rooftops: Once you have a proven, effective policy, let people know about it, particularly the top talent you hope to attract to your business. Include it on job posts and as part of the onboarding process.
The implementation of any new policy brings challenges, but this is especially the case for a policy that quite literally changes how your employees work. A few challenges that you should be ready for, and some solutions you can try, include:
Team coordination: Flexible schedules can make internal collaboration more difficult.
Solution: Implement core hours/days where all team members are in the office.
Equity concerns: Some roles may not allow for as much flexibility as others.
Solution: Offer alternative perks to more restricted roles, such as bonuses or extra leave.
Productivity monitoring: It can be difficult to monitor remote employees and ensure that they remain accountable.
Solution: Focus on output-based performance metrics rather than hours worked.
Cultural resistance: Managers or teams might resist such a dramatic change.
Solution: Provide training and showcase success stories to build trust in the policy.
Flexible working policies in New Zealand: proven examples
Do flexible policies work in New Zealand? Do they help to enhance employee engagement, improve retention rates, and attract talented new hires, like the studies say they do? Let's look at some flexible working NZ examples to find out.
Over the last decade a number of government agencies, including NZ Police, Ministry for Primary Industries and Inland Revenue, have switched to a "flexible by default" approach with success reported across the board. In the case of NZ Police, the switch was found to improve the engagement and wellbeing of key talent.
Unilever, meanwhile, conducted an 18-month trial of a four-day work week in its NZ operations. where employees retained 100% of their salaries while working 80% of the time. The results were impressive - revenue grew and business targets were met, while on the employee side:
The vast majority of staff reported feeling engaged
Absenteeism dropped 34%.
Feelings of stress dropped 33%.
Feelings of 'strength' and 'vigour' at work increased 15%.
Work/life conflict fell 67%.
In fact the trial was so successful that Unilever expanded the initiative into Australia.
Flexible work: an employee retention strategy that's a win-win
If you're looking to retain employees, there are few more effective strategies than offering flexible work arrangements.
Offering flexibility can help employees feel appreciated. It can create a better work environment. It can encourage employees to develop new skills and find a better work-life balance.
On the business side it enhances your ability to keep employees, while also potentially enhancing the productivity of your workers.
Offering flexible work isn't the right move for every organisation, and you need to consider whether it works for your business and employees. But if it does, it is most certainly a policy worth pursuing.
Another effective way to increase employee retention: reward your staff with a range of perks. With the help of 1Team you can offer your team members savings from New Zealand's leading retailers – Torpedo7, Dulux, Pita Pit, Hirepool, Repco, Warehouse Stationery and more – all through an app tailored for your business.
