Flexible working hours can increase productivity, study suggests

Prashasti Awasthi Mumbai | Updated on December 16, 2020

A key challenge will be to balance optimal division of employee’s time between work and leisure and employer’s goal of profitability

Raul Ruube’s doctoral thesis ‘Working Schedules and Efficient Time-Use in R&D Work’, which was supported by the TalTech Department of Economics and Finance, states that the provision of flexible working options may help achieve productivity gains.

This can also lead to reduction in personnel costs if it can be assured that the individual characteristics of the employees are taken into account.

However, a key challenge will be to manage the balance between the optimal division of the employees’ time between work and leisure and the employer’s goal of profitability.

The supervisor of the study and professor at TalTech Department of Economics and Finance Aaro Hazak, said: “A key source of distortion in use of flexitime comes from individual heterogeneities in preferences for work arrangement ― many employees prefer a working week which is concentrated in three to four days, others prefer a working week which is spread over six to seven days, and some prefer the standard five-day working week. Employees’ preferences for daily working schedules are also different.”

The study suggested that if employees are required to work during hours that they would prefer not to allocate to their work, they may wish to get a wage premium for the inconvenience. It makes more sense as utilising labour resources would lead to impairment of work commitment. This, in turn, may lead to wages being suboptimal.

If an employee could work at the time convenient for him or her and maximise efficiency, the employee could receive higher wages. There may be cases where wages paid to an employee are not proportional to the employee’s work performance, the thesis added.

The researchers believe that work schedules can have potentially large financial implications for companies, on both the revenue side and the cost side.

The study noted that an employer can achieve cost savings through lower absenteeism because of employees’ better health and lower staff turnover due to higher job satisfaction.

The limitation of this method is that coordinating employees working at different times can potentially entail additional costs to the employer and inefficient use of resources.

Flexible working time arrangements also require better self-management skills in planning working time.

Professor Aaro Hazak, however, believes that this possibility should be considered, and added: “It is important that employers consider the option of flexible working schedules as a possibility to support the company’s competitiveness.”

The findings of the thesis were published in the journal EurekaAlert.

Published on December 16, 2020

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