How Flexible Working Increases Business Productivity

Sarah Cooper
Jun 16
2 min read

Updated: Jul 7

If I let my team work flexibly, will it increase or decrease business productivity?

We hear this question frequently. That's why we're summarizing the Government's most recent assessment of flexible working.

In October 2024, the UK Government published an Impact Assessment as part of its commitment to make flexible working the default from day one of employment, unless it is not reasonably feasible for the employer to accommodate it.

Here’s a link to the assessment: Government Impact Assessment on Flexible Working

What Does the Report Say About Flexible Working and Productivity?

According to the Government’s assessment, the answer is clear: flexible working generally increases productivity when implemented thoughtfully and where feasible.

Key Findings

Here are the key findings from the assessment:

Employers Report Productivity Gains

Nearly 40% of organizations say home or hybrid working has increased productivity or efficiency.
Only 13% report a decrease in productivity.

Insights from a University of Birmingham Survey

A survey by the University of Birmingham found that:

76.5% of managers believe flexible working increases productivity.
62.8% think it boosts motivation.
51.8% report improvements in concentration.

Employees Are More Motivated and Satisfied

89% of employees surveyed by HSBC say flexible working is a key motivator, even more important than financial incentives.
Flexible working makes employees feel valued and trusted, which enhances engagement and performance.

Boosting Recruitment and Retention

Offering flexible roles can attract up to 30% more applicants, especially from underrepresented or untapped groups.
It also helps retain talent—particularly parents, caregivers, older workers, and those nearing retirement.

Business Performance Benefits

The assessment highlights wider business benefits, including:

Reduced absenteeism.
Lower staff turnover.
Better skill retention.
Improved well-being, which leads to sustained performance over time.

Conclusion: The Power of Flexible Working

Flexible working, when managed well and aligned with business needs, is a powerful lever to improve productivity.

If you’ve been unsure about offering more flexibility, this report provides strong evidence that it can create a win-win situation for both employers and employees.