The Way We Work
UK businesses and workers are engaged in a process of transformation, where the way we work is changing. With a growing demand for flexible working – whether it means working remotely, for fewer hours or in the gig economy – we assess the challenges that lie ahead.
As well as the growing demand for more agile, collaborative and customer-focused environments, businesses are increasingly reliant on technological competence. Over the past decade alone, automation processes, analytics, the cloud and several digital platforms have become core to the success of countless organisations.
These forces – together with economic, geo-political and cultural developments – have driven significant change in the UK labour market, altering the way jobs are structured and distributed across multiple sectors.
Meanwhile, the attitude of many UK employees towards work has shifted dramatically. Some now have very different priorities to their parents and grandparents when it comes to important life and career decisions, such as the need for greater flexibility, autonomy and workplace support.
Other individuals have been greatly affected by the lack of rights and protections provided to workers in their sector, due to the rise of temporary contracts, with a number of international businesses shifting away from full-time employees to short-term contract workers.
In fact, given that the world of work has changed so thoroughly, some now believe an entirely new kind of workforce has emerged, where flexible work arrangements, the ‘gig-economy’, start-up culture, and the constant disruptive power of technology now define what work means.
So what does it take to succeed in this new environment? NerdWallet takes a look and explores some of the major changes that are now shaping the future of work for all of us.
A growing demand for flexibility
Flexibility allows employees to have greater control over certain aspects of their working lives, such as when, where and for how long they engage in work-related activities.
In practice, flexible work arrangements can refer to a combination of the following things:
- Starting and finishing work at times chosen by the employee, provided that minimum working hours or tasks are completed.
- Reduced hours on certain dates, for personal reasons (e.g. children’s school holidays).
- Working from home or another location, also known as remote working.
- Meeting the weekly working hour minimum in fewer days, such as a four-day work week.
- Optional unpaid leave, perhaps taken due to unexpected family commitments.
Ultimately, flexibility means very different things to different people, but the desire for more of it exists across several sectors and extends beyond the motivation to simply have more ‘time off’, as some have wrongly assumed.
Instead, whether we’re talking about single parents of children in school, individuals who want longer weekends for holidays, or workers who would simply like the ability to clock off a few hours early if they’ve finished all their work, the desire for flexibility seems to be rooted in a deeper desire to have more control over what we do, and how we do it – a sentiment which has resonated across the nation.
Momentum for this trend has been so significant in certain sectors, especially where highly skilled workers have the ability to work remotely from any location, that the responsibility has now shifted to employers to explain why flexible working options shouldn’t be adopted, rather than with employees to argue that they should. And much of this has happened as greater flexibility has proven, time and again, to result in the production of better work – not just happier workers.
The Chartered Institute for Personal Development (CIPD) released a cross-sector evidence-based guidance report to help organisations implement flexible working, in recognition of its broad benefits. Featured case studies highlight several examples of increased motivation, creativity, mental wellbeing and productivity levels, all as a result of flexible work practices.
Combined with pressure from employees and the risk of losing talent, it’s no shock that as many as 40% of business managers, owners and directors in our survey have changed their flexible working policies over the past 12 months.
Having said this, there are a still number of labour markets where flexible working options are less realistic. Schools and hospitals, for instance, don’t have the same capacity to offer their employees options over when and where they work. And who’s to say that flexibility is always met with approval once it is actually introduced?
A decreased sense of community in the workplace, reduced interaction among employees in creative departments and a sense that the working day never ends are just some of the potential negatives that workers have experienced as a result of flexible working arrangements.
So while flexibility is undoubtedly on our minds in a big way, making it work relies on individual businesses and staff figuring out if it’s right for them. Successful models require a shared understanding about how certain practices can be managed without a negative impact on the workplace and the workforce.
Age group percentages of people who left their job in the last 12 months because they wanted a role that provided greater flexibility in working hours and location.
72% of people in our recent survey on working attitudes in the UK said flexibility at work is important to their job satisfaction, while 28% actually left a job in the last 12 months, in search of a role that offered more flexibility.
Growing the ‘gig economy’
According to the Trades Union Congress (TUC), one in 10 working-age adults now uses gig economy platforms, such as Uber, Fiverr and Upwork – double last year’s figures.
While this free market system, characterised by more temporary, short-term arrangements has provided several benefits for both businesses and workers – including those who are unable (or simply unwilling) to commit to traditional work structures – it has also come with a number of drawbacks.
A significant number of economists and human rights organisations have highlighted real concerns about the long-term effect of the gig economy, including reduced rights and benefits for workers, as well as issues regarding payment security for those who rely on this type of work as their main source of income.
In a report on the trend, the Centre for Research on Self-Employment (CRSE) found that 4.5 million Brits considered leaving, or have already left, freelance work, due to inconsistent or late payments. Also, in a government report on the experiences of those in the gig economy, it was highlighted that in addition to self-employed gig workers not having access to sick pay, holiday pay, maternity pay and pensions, additional disadvantages include:
- lack of security in terms of working hours and pay
- low pay
- loneliness and social isolation
Ultimately, the effect of this trend has been varied across different UK demographics. It’s undeniable that large sections of the workforce have found their rights and privileges under threat as gig working becomes the norm. The inability to form trade unions due to self- employment work status also means it is very difficult to change the nature of these circumstances. But for others, the gig economy has been exactly what they’ve needed, providing more flexible employment options.
We have to acknowledge both sides of the coin here; while some are benefiting from the increased flexibility in the workplace and choice on working hours and responsibilities, many others have been left out in the cold by the gig economy, looking at an uncertain and precarious income and a lack of social protection as a growing reality.
Sizing up the four-day working week
If you didn’t know already, the desire for a four-day working week is strong. Yet understandably, there are still valid concerns as to the potentially disruptive impact this could have on many businesses.
Looking closer at the issue, the largest worry from most organisations is the belief that this new working structure would result in employees doing less work for the same amount of pay – obviously not an enticing offer for business leaders.
In reality, the four-day working week is more of a reorganisation of human resources, with work output staying more or less the same. Of the numerous models that exist, most involve the completion of equal working hours or work output, simply within a shorter time period.
Several studies have already highlighted the benefits of such a change. The University of Auckland’s study on Perpetual Guardian, a New Zealand financial services company, found that after 240 staff were moved to a four-day week, productivity increased, while there was no drop in the total amount of work done.
We’ve also seen public support grow across Europe, with a recent YouGov Eurotrack survey showing that all seven European countries included in the study supported the introduction of this new system. And while the most enthusiastic were the Finns, at 65%, Brits followed a close second at 63%, joint with Sweden.
So as the debate continues and popularity picks up, it would be tempting to say that if a few things fall into place over the next few years – with government policy supporting general sentiment – many businesses could be in for a monumental change to their working practices, to the benefit of both productivity and employee wellbeing – a win-win.
Yet, the task of implementing such a big change across multiple company departments is still a formidable task, even if belief in its benefits is strong. This is perhaps best illustrated by the Wellcome Trust who scrapped its plans in April 2019 to implement a four-day working week despite initial optimism, due to the process being “too operationally complex” and following a three-month study into its implementation – a blow to supporters of the four-day week.
In September 2018, the TUC sparked a national discussion around the topic and questioned British social attitudes surrounding work after it argued a four-day working week could be achieved if the benefits of technology were more effectively distributed across the UK workforce.
“Almost half (49%) of people in our survey would be in favour of a four-day working week, even if it meant their salary was reduced. And three-quarters (75%) would be in favour of working a four-day week if they still had to complete their current number of weekly working hours in fewer days.”
Retaining talent by maintaining health
Against a backdrop of a tightening labour market, rising levels of skills shortages and persistent emphasis on international competitiveness, employers are realising they must do all they can to attract and retain talent.
According to a 2018 business barometer by the Open University, many senior business leaders (70%) found that the recruitment process takes an average of one month and 22 days longer today. For any business striving for sustainable, unimpeded growth, the consequences of this can be severe.
So what do jobs need to offer to secure an engaged workforce? Ask around and many will tell you that supportive working environments and increased attention paid to employee mental health is becoming a deal-breaker for many job-seekers today.
Encouragingly, of those questioned in our survey, 58% believe their employers already support them emotionally or care about their mental health, which comes as 68% of business managers, owners and directors said they consciously engage with their employees about their mental health and emotional state.
Over half (52%) of workers would take a pay cut if it meant they had a job that was more enjoyable and less stressful, while 58% believe their employers support them emotionally or care about their mental health.
One in six employees in the UK reported having a mental health condition according to a government mental health guidance report released in 2019, while stress, depression and anxiety were identified as leading causes of sickness absence.
Do we need meaning from our jobs?
But what use is mental health support without a sense of meaning in the workplace? According to a YouGov study in 2015, only half of British workers say their job is meaningful and just 33% find their jobs personally fulfilling – worrying statistics when we consider how important fulfilment is to our sense of worth.
While some would argue that a disconnect between work and personal life has long been an issue, others say that the evolving nature of today’s job roles has compounded this feeling of meaninglessness. Ultimately, new industries have emerged that are far removed from any social purpose, with many businesses often supporting other businesses, that in turn help administer other businesses… is it any wonder large numbers of the workforce are struggling to find meaning in their work?
The question is open for today’s business leaders: if your competitors are offering workers mental health support, a good work-life balance and a sense of meaning and purpose in their jobs, will the best talent work for you… or them?
Today, people are much more likely to keep searching for companies that offer better protection from adverse working conditions and a greater sense of fulfilment. And businesses that don’t factor this into their search for future talent are likely to be left without the skills they need to survive.
According to the UK mental health charity, Mind, 14% of employees said they had resigned in the past due to workplace stress, while 42% had considered it. Also, in its Introduction to Mentally Healthy Workplaces, Mind claims that simple, inexpensive measures to support staff mental health and wellbeing can:
- increase productivity, efficiency and innovation
- increase profits and reduce business costs
- improve staff morale and performance
- reduce sickness absence, presenteeism and staff turnover
- enhance your reputation as an employer
- help to honour your duty of care as an employer
“Mental health is particularly important in the Arts and Entertainment industry as the demands on people’s creativity and emotional vulnerability are high. Creating a safe, open and supportive working environment is extremely important.”
Bronwen Stephens-Harding, Director of Rogue Opera (Touring Productions)
The disruptive power of technology
Some 63% of people in our survey use personal smart devices for work purposes, while 45% find it more difficult to detach themselves from their jobs than in the past, due to increased access to work emails and documents through these devices.
Age group percentages of people who use personal smart devices (smartphones, tablets, laptops) for work purposes, such as accessing emails or sharing documents.
Throughout history, major technology-driven developments have caused significant changes to working practices. Factories, mass production and central distribution networks have given way to new online technologies, data analytics and automation – all fundamentally impacting on the way businesses function.
Just as some businesses simply wouldn’t exist if not for technologies that have emerged over the last few years alone, others have become obsolete as a result of those same technologies. And for workers and companies whose success relies on technology currently being upgraded or phased out, the pressure is now on to adapt and upskill, in order to stay afloat.
This increased reliance on technology – and its central role to most companies – now seems to bind us ever-closer to our working roles, arguably making it much harder to reduce the spillover of work into our personal lives.
Age percentage of people who find it more difficult now than in the past to detach themselves from their job because of increased access to work emails and documents through personal devices.
Our survey revealed that 45% of people find it more difficult now than in the past to detach themselves from their jobs, due to increased access to work material outside of the office through their own devices. Constant use of technology or problematic internet usage (PIU) has also been associated with a range of psychological problems, such as depression, anxiety, social isolation and impulsivity.
But it certainly hasn’t all been bad. Steps such as collaborative office technology have improved remote working opportunities massively, allowing employees to have greater freedom over where and how they work, also giving businesses the ability to access talent from across the nation, and even globally.
Further to this, we’ve seen new digital software, platforms and automation constantly improve workflows and efficiency across many sectors – simplifying menial tasks that would normally take up significant man hours.
Whether you’re benefiting or not, the important message here is that technology has the power to seriously change things. Just as it has presented certain advantages, it has also brought new threats for both employers and employees. The biggest danger is for those who are unwilling to adapt as new technology emerges and reshapes the workplace.
According to the 2019 Digital Business Report from UK software and services company Advanced, nearly a third (31%) of SME decision-makers say their leadership team isn’t moving fast enough to keep up with employees’ changing technology requirements.
Businesses must create working environments that effectively integrate new technology in a positive way, while doing what they can to mitigate the negative consequences of increased technology usage for their employees.
Individuals, especially of older generations who have not already developed digital competence, will be tasked with educating themselves and upskilling to stay up to date with emerging trends, to remain employable and competitive.
Worried about AI?
Artificial intelligence (AI) is nothing less than the next great revolution and will have a huge impact at every level of our existence, according to Dr Stephen Simpson and Hugh Shields, founders of UK-based corporate performance consultancy Alpha Fortius.
“Individuals need to raise their game in the workplace – offering value which no amount of processing power can hope to replicate – or risk being swept away in the relentless march of technology," advise the co-founders of the consulting firm, designed to improve staff performance and refine IT infrastructure policies.
Current and emerging technology trends
“Technology is currently changing the way we operate, as we are in the middle of a system migration at the moment. We use a CRM, an accounting system and various other office-related software to get the job done. Finding the right CRM has been a challenge but once we have the right system in place, this should significantly improve admin processes for the business.”
Jenny Alexandridi, Director at Clean Letts (Property Maintenance & Cleaning)
Are UK businesses embracing the shift?
It seems like a no-brainer that businesses should embrace changes, which are taking place today. But more than this, those which don’t get on board with these trends that are already causing far-reaching disruption to working practices risk being outcompeted in the battle for talent retention and productivity.
Yet, there is a sense that traditional working principles still have an important place in the UK – just as much as they did in the past. After all, company loyalty, predictable working hours, linear hierarchies and traditional workplace processes have brought success and cohesion to many businesses for decades.
These long-standing principles are ingrained in the work-related attitudes of many UK business leaders and there is a lingering concern that certain changes will have a negative impact on the bottom line. Perhaps for this very reason, 41% of business leaders in our survey said they typically avoid hiring people who require or demand flexible working in terms of hours and location.
Also, despite 59% of business decision-makers who said employees were able to perform as well when they were working remotely, 49% felt they had to regularly check in on their team when they were working remotely, to ensure they were fully engaged in their work, highlighting the cautious stance that many business leaders still have.
So while the tide may feel as if it has already turned, there is still resistance against an all-out transformation of British social attitudes regarding work. Ultimately, the themes covered in this article are still very new and the eventual results of the changes that are now taking place are yet to be seen, as businesses continue to experiment, evolve and adapt in an increasingly competitive landscape stance that some business leaders are taking.
Business size percentages of leaders that have changed their flexible working policies for their employees over the last 12 months.
50% of employees in our survey said they already have the ability to work remotely when they want to, and 54% have flexibility in the hours they start and finish work.
Are things getting better, or worse?
It’s open for debate whether the major trends outlined in this article are bringing about a positive or negative change for the UK. Below are some of the major arguments on both sides of the fence, to help you make up your own mind.
What does ‘work’ look like in 2020 and beyond?
The greatest defining factor for successful businesses and employees of the future will be how intuitive they are when it comes to adapting to the way the working world is changing. To finish, we’ve outlined some of the biggest trends we believe will come to define the way we work over the next five years:
- The growing importance of the individual
Whether it’s adapting work policies or offering additional support and benefits, companies of the future will cater to the evolving needs of the individual, as they demand more from their jobs than financial return alone.
- Businesses are no longer evaluated purely on their profitability
In fact, when it comes to public perception, larger and seemingly cold-hearted enterprises will become less attractive to consumers than businesses and brands that have stronger work attitudes and values, such as who they are and what they represent, ethically, environmentally and socially.
- Increased horizontal collaboration and working structures
Business models will rely less on traditional hierarchies and more on employee autonomy, with more reward programmes and other office-related incentives to build cohesive work environments and make up for the potential shortcomings that remote working and flexible work arrangements might have on traditional business culture.
- Going beyond basic technological competence
The success of companies will rely on how well their employees can truly harness the benefits that new technology developments can offer, such as cloud computing, analytics, social networking and team collaboration software, to go beyond what their competitors can do in reacting to new opportunities and threats in their market.
- Less security and job-related rights in certain sectors
All significant societal change has both winners and losers. A large section of society will be faced with the loss of certain rights and opportunities as the market shifts towards employing more gig workers and highly skilled freelance contractors unless we can find an innovative solution to address this.
- Automation and AI to threaten certain job roles
AI and increased automation processes will no doubt continue to affect the employment sector. While some businesses will share the benefits of new technology with their staff, the job security of others will become more vulnerable as a number of jobs are taken over or adapted.
Qualities of a healthy work environment
- Leadership that cares about individual welfare.
- A positive and flexible work environment.
- Opportunities for growth and skills development, especially with new technologies.
- Work that is meaningful and offers a sense of autonomy and satisfaction.
- Reliable and trustworthy management, where relationships are honest and transparent.
- A shared understanding about what success looks like in the workplace.
- A sense of community and shared culture.
“Offering flexibility in working hours, days and often location is really about trusting people to do their jobs within a format that works for both parties. In this connected world, there is no reason not to allow this flexibility wherever practical. It’s so important for well-being to allow people to balance their life demands with work.”
Jake Hithersay, Director and Co-Founder of Soak Digital
“Working practices have changed radically over the past two decades – the rise of new tech has made it far easier and more common for employees to work remotely and flexibly. However, our research clearly shows many workers feel their employers have not yet caught up with the flexible working trend, so it’s important managers take note of these findings and assess how they can cater to the demands of their workforce.”
Nic Redfern, Finance Director at NerdWallet UK
Image source: Getty Images
Finance Director at NerdWallet UK and business adviser to SME's Nic is spokesperson for small and growing businesses with a strong understanding of the financial needs of business Read more