Flexible working rules: Are employers up to speed?

In April 2024, the government introduced new flexible working regulations that affect all employers in England, Scotland and Wales.

The legislation changes the way employees can request flexible working. Now, employees no longer have to justify their flexible working requests and can make requests from day one of starting employment.

But it also changes the way employers need to respond. So, if you’re a manager, business owner or budding entrepreneur, it’s useful to know what’s what.

We surveyed 500 SME business decision-makers once the changes were in place to find out what they know about the new flexible working legislation – and how they weigh up the needs of their business with the work-life balance of their staff.

What does flexible working mean?

There’s a lot of variation within the term “flexible working”. But by and large, when staff request flexible work, they look to make changes to:

• the hours they work per day, or week
• when they start or finish work
• the days they work
• where they work.

Why is flexible work important for staff and businesses?

As we can see, there’s a lot of diversity within the umbrella of flexible work. A lot of this comes down to the simple fact that in work, as in life, different people have different lifestyles and responsibilities. And understanding that is key to flexible work.

By and large, employee requests normally ask for changes to the pattern of hours worked, when they start/finish, their workdays, and where they work. A few examples could include:

• part-time working – where staff work less hours than a full-time worker
• term-time working – working around the academic calendar, normally to prioritise childcare during holidays
• job sharing – where two or more people do one job, and share out hours and responsibilities
• hybrid working – where time is split between working in the office, and working from home
• compressed hours – working full-time hours over fewer days, such as in a nine-day fortnight arrangement
• remote working – working away from the office, often from home
• flexitime – where employees choose when they start/finish work, within set parameters
• annualised hours – a yearly hour allocation that can be balanced when/how the employee chooses.

What are the changes to flexible working legislation?

The long and short of the flexible working legislation is that employees can make flexible working requests from their first day in employment. Plus, rather than having the right to make a single statutory request for flexible work per year, employees now have the right to make two.

Employees also no longer need to explain what effect their new arrangement, if accepted, would likely have on their business, or how any such issues might be avoided.

As an employer, you don’t have to accept the request.

But you are required to:

• Decide within two months, as opposed to the previous three.
• Inform your employee that you’ll formally consider the request.
• Invite to a meeting: if you don’t immediately accept the request, then you need to invite your employee to a meeting. They have the right to be accompanied by a colleague.
• Explain in writing your reasons for refusing a request. You’ll need to use one of the statutory reasons provided.
• Give the right of appeal where the request isn’t accepted fully.

At the heart of the legislation is the requirement to “handle all flexible working requests in a reasonable manner”, and only refuse if you have a genuine business reason to do so.

The statutory reasons for refusing a request are listed in the Employment Relations (Flexible Working) Act 2023. GOV.UK and ACAS also provide useful guidance.

Key findings at a glance

Our study uncovered a huge range of different opinions and awareness levels on flexible working and the new rules around it.

• 69% of businesses were either somewhat or very familiar with the new legislation.
• Over 80% of respondents anticipated positive outcomes from flexible work, hinting that the benefits of such policies are clear to most businesses.
• Up to 30% pointed to environmental benefits from the legislation, such as lower carbon emissions through reduced commuting and a lower office footprint. Others indicated a positive impact on company culture and access to a wider pool of talent.

However, more work is needed to raise awareness of the new legislation and highlight the benefits of flexible working to businesses.

• One in five respondents lacked familiarity with the new rules, even if a larger proportion had a more solid understanding.
• 19% believe there are no employer benefits to flexible work.
• Up to 30% haven’t yet implemented any employee wellbeing initiatives of their own.
• Respondents noted concerns and challenges around implementing the legislation too, such as managing staff and providing training on the changes.

Breakdown by industry, location and business size

When we look at firms by industry, size, and location, a clearer picture emerges of how different businesses approach flexible work and employee well-being.

• The arts and media industry have the most remote workers. Over a third of workers are fully remote, compared to an average of 20% across all industries. Just 13% of arts and media sector workers work in the office full time. This is perhaps owing to the high proportion of specialist freelancers and contractors. 32% of the creative sector workforce are self-employed.
• Business and tech sectors place emphasis on mental health support, employing wellness apps and software to help workers manage a demanding workload.
• London is setting a high benchmark for office spaces. In the capital, there’s a strong focus on plants, natural light, as well as freebies and other perks.
• Larger SMEs are leading the way in providing benefits over smaller companies. Only a third of small and medium SMEs have implemented flexible working hours, as opposed to 56% of larger ones.

Gender and age

Then, there’s the impact of gender and age. 47% of our respondents said they receive the highest rate of flexible work requests from women, as opposed to 36% from men. Most of these seem to come from women aged 25-54.

This is perhaps to be expected, considering the higher rates of childcare and housework still taken on by women in the UK.

Survey results from across England, Scotland and Wales

We surveyed 500 SME decision-makers in August 2024, with results from all industries including:

• business and tech
• public sector and law
• energy and industrial
• arts and media
• leisure and retail.

Our results included respondents from regions across England, Scotland and Wales. (Northern Ireland has separate flexible work legislation and wasn’t included in our study.)

Our study is also specifically about SMEs, which by definition have fewer than 250 employees on the books. Where business size is mentioned, we used the term “small”, “medium” and “large” to reflect the size of a business within the 250 employee limit.

• Small: one to nine employees.
• Medium: 10-99 employees.
• Large: 100-249 employees.

How familiar are businesses with the changes to flexible work legislation?

Our first question related to how familiar the business community was with the new legislation.

• 45% said they are somewhat familiar.
• 24% said they’re very familiar.
• Over one in five (21%) said they were not very or not familiar at all.

The results are encouraging in that a high proportion of respondents (69%) were either somewhat or very familiar with the new legislation. But if we dig a bit deeper, we can see a more nuanced view: one in five lack familiarity, which suggests it might take a bit more time for the legislation to fully be in practice.

How well-developed is flexible working across the businesses we spoke to?

Our survey results showed a pretty solid level of flexible working policies in place across industries prior to the new legislation.

In fact, almost three quarters (72%) of respondents had some form of flexible working policies prior to the new legislation introduced in April, whereas 23% had no policies at all.

• 32% said ‘yes, moderately developed policies’.
• 26% said ‘yes, comprehensive policies’.
• 14% said ‘limited policies’.
• 23% said ‘no policies at all’.

Here, understanding the nuances, importance, and different forms of flexible work is important. And as an employer, it’s important to look beyond the pandemic era and understand what flexible working means to different people – and what it can bring to your business.

How does flexible working actually work?

The new rules on flexible working impact how your employees make statutory requests for flexible work, and how employers must respond. But what does flexible working look like in day-to-day life, and why is it so relevant now?

Flexible working in 2024

Context is important. Even in 2024, it’s hard to separate our notions of flexible working from the event that transformed how we view meetings, office attendance and the workplace in general: COVID-19.

• Before COVID-19, remote, hybrid and flexible work was increasing gradually. But only one in 10 people worked from home for one day a week.
• At the peak of the pandemic, almost 50% of workers reported working from home for one day a week. 38% worked at home for five days.
• By 2022, working from home had reduced to 22%.

Since 2022, these hybrid working levels have been pretty much the same. ONS data from July 2024 reported that up to 25% of us work from home at least some of the time during the working week.

How flexible are businesses with hours?

With the important recent context of flexible working in mind, we asked businesses how their staff manage their hours.

• 35% said that they have flexible working with core hours (e.g. employees have a set of core hours, typically 10am-4pm, but can choose when to start and end their day around those hours).
• 25% said that they have self-selected hours, in which staff have full freedom to pick their own hours.
• 23% said they have consistent core hours (e.g. fixed schedule where employees work the same hours each day, typically 9am-5pm).

Despite larger SMEs having a more comprehensive approach to flexibility overall, they seem to focus on a more structured approach: relying on a core hours system to ensure their staff, by and large, keep to a relatively similar pattern.

Small SMEs, on the other hand, have much more flexibility to choose their own working hours:

• 46% of people in small SMEs have self-selected hours, up from 25% average for other business sizes.
• 38% of workers in medium SMEs had consistent core hours, where the average is 23%.
• 51% of employees in larger SMEs work flexibly with core hours, up from the 35% average.

Where are staff working from in 2024?

We also looked at where employees fulfil their tasks in the working day.

Over one in five (21%) work in their offices during work hours without flexible working arrangements in place.

On the flipside, almost one in five (19%) are fully remote – and staff can choose to work from home or a location of their choice at all times.

Three in five (60%) have some sort of flexible working arrangement in place, whether flexible hybrid, fixed hybrid, semi-flexible arrangements or other:

• 24% are flexible hybrid – staff can choose when and how many times a week they come into the office/workplace.
• 18% are fixed hybrid – staff are required to work from the office/workplace on set days.
• 18% had other working requirements in relation to location for staff, sometimes including semi-flexible hybrid (staff required to work a set number of days and choosing which days they attend the office) and overseas remote working.

Where do staff in different sectors work?

Roles within the arts and media industry have the highest flexibility – perhaps owing to industry culture, the specialist nature of the roles and equipment involved, or a deadline and deliverable-first approach to the job.

• 34% are fully remote, compared to the average across industries of 20%.
• 13% are in the office full time, where the average across industries is 21%.

Has the new legislation moved the needle on flexible work?

The new rules, along with earlier legislation, create meaningful and honest dialogue between employers and employees about flexible working. But since the new legislation launched, how many businesses have seen an uptick in requests?

On first glance, the new legislation seems to have made an impact. 63% of workers have made flexible working requests, at a rate of around 20% per business.

Let’s dig a bit deeper here:

• 21% said that between 20-40% of their workforce had requested flexible working since the introduction of the new flexible working legislation.
• 17% said that over 40% of their workforce had requested flexible working since the introduction.

Interestingly, flexible working requests go up as business size increases.

• 27% of small SMEs have received flexible work requests.
• This rises sharply to 84% of medium SMEs.
• 91% of larger SMEs have received flexible work requests since the legislation.

Flexible working and the law

When it comes to statutory requests, there are various legal frameworks to be aware of. Flexible working rules are laid out in several different acts and regulations in England, Wales and Scotland. (Northern Ireland is covered by different flexible working legislation.)

In England, Scotland and Wales, the key legislation includes:

• Flexible Working Regulations 2014, and its various 2023 amendments.
• The Employment Relations (Flexible Working) Act, which came into force on April 6th 2024, that we’ve discussed above.

Flexible working: the benefits for business

In our survey, we found a range of potential benefits were already clear to businesses:

• 81% of businesses can see the benefit of flexible work. One in five decision makers (19%) believe there will be no positive impact resulting from the new legislation.
• Two in five think that the new flexible working legislation will result in improved morale, a similar level (38%) said they think it will increase productivity.
• Over a third (34%) believe it will enhance employee satisfaction.
• 30% believed it will create environmental benefits through lower levels of commuting and a smaller office footprint.
• 25% reported it would reduce overhead costs, and similarly, 24% said that it would create a positive shift in company culture, and would also enable access to a wider range of talent when recruiting.

Productivity boosts, reduced sickness rates and improved staff retention are some of the clear benefits to flexible work – and these affect both employer and employees.

Rising demand and shifting expectations

The stats from the end of the pandemic until now show that hybrid work doesn’t appear to be going anywhere. Much of this may come down to a shift in expectations – along with a rise in demand.

We can see some particularly eye-opening stats in a study from the Equality and Human Rights Commission:

• Over 8.5 million full-time workers want to work flexibly.
• Over 400,000 people require flexibility to even consider a role.
• 1.5 million people are trapped in low-paid, part-time work that is below their skill level due to a lack of flexible jobs.
• Much of the flexible work demand comes from people with carer responsibilities, as well as parents.
• Over 90% of people born between 1980-2000 identify job flexibility as a priority while job hunting.
• Less than 10% of jobs are advertised as being flexible at the hiring stage.

What concerns do businesses have?

As you can see above, there’s a lot to get to grips with in the way you handle flexible working requests. So what concerns do businesses have with the new legislation?

• 28% of respondents said they don’t have any concerns.
• 25% said potentially unreasonable requests from staff.
• 22% said the increased volume of requests for flexible working.
• 20% said a lack of understanding of the legislation from staff making the requests, and also said fragmentation of the workplace.
• 19% said a lack of understanding of the legislation from management staff reviewing requests.
• 17% said the time investment needed to process the requests.
• 16% said challenges in management and collaboration.
• 8% both said potential for increased inequality between employees, and also said an increase in the number of employee cases and claims raised against employers.

However you feel about the new legislation, it’s worth noting that the rules are here to help businesses too. By following them, you can ensure that you follow correct, fair processes in dealing with flexible working requests. And, in doing so, you can limit employee grievances and legal claims too.

A change of mindset

Aside from following the ACAS framework, there are a number of other things you can do to better prepare your business for flexible work – and to meet your new legal obligations.

For example, it helps to approach flexible working with an open mind – and also to build it into roles from the ground up when you design new job roles. Likewise, specifying flexibility in job adverts is a good way to broaden the appeal and encourage early conversations.

Dawn Smith, Senior Employment Law & HR Consultant at NatWest Mentor, had this to say:

“As demand continues to rise for flexible work, it’s important that your business understands and meets its legal obligations. Failure to seriously consider flexible working requests could negatively impact on staff retention and result in costly employment tribunal claims."

"Since the COVID-19 pandemic, the number of requests within businesses for hybrid working and flexible working policies has increased significantly. Having a policy in place has benefits for both employers and employees. Line managers will be able to refer to the flexible working policy when requests are made, ensuring they meet the legal requirements. And employees will know what their rights are, helping to promote wellbeing and a healthy work-life balance."

"It may not always be possible to accept flexible working requests, but employers should fully consider alternatives and consult with employees before making a final decision. Where there is doubt, it is worthwhile considering an initial trial for an agreed period. This allows both parties to measure the suitability of the flexible working arrangements before a final decision is made and ensure it works for everyone.”

How can you implement flexible working?

The new legislation means there are new expectations on employers and employees when it comes to dealing with statutory flexible working requests.

Here are a few important points that you’ll need to know about.

As an employer, you must consider each statutory request reasonably. This includes careful assessment of the request and its impact on your business.

In considering a request, you must not discriminate unlawfully against someone because of a protected characteristic, as set out in the Equality Act 2010. These are:

• age
• disability
• gender reassignment
• marriage and civil partnership
• pregnancy and maternity
• race
• religion or belief
• sex
• sexual orientation.

According to the ACAS Code of Practice on flexible working, “employers must agree to a statutory request for flexible work unless there is a genuine business reason not to”. So if you’re rejecting a request, it must be for one or more of the following reasons, as set out in the Employment Relations (Flexible Working) Act 2023:

• the burden of additional costs
• an inability to reorganise work amongst existing staff
• an inability to recruit additional staff
• a detrimental impact on quality
• a detrimental impact on performance
• a detrimental effect on the ability to meet customer demand
• insufficient work available for the periods the employee proposes to work
• planned structural changes to the employer’s business.

If an employee uses a flexible working request to seek a reasonable adjustment to their role, you must consider this in line with legal obligations under the Equality Act 2010. You must make reasonable adjustments to remove disadvantages in a role related to a disability, where possible.

There’s a lot more to consider too. Read the full ACAS Code of Practice on requests for flexible working to understand how to consult and respond to flexible working requests, and much more.

How Mentor could support you

Mentor’s team of experts can help take care of your HR and employment law issues with:

• unlimited calls and real-time live chat – talk to an expert today about flexible working
• dedicated account and case management support from consultants who know your business
• onsite audits of your current HR processes
• a full action plan tailored to your business
• ongoing reviews to monitor your progress
• short-term contracts that give you more flexibility
• up to £1 million in legal cover so you’re protected should the worst happen.

Get a quote

Please note, Mentor services incur a cost.

Survey Results and Methodology

Survey carried out by OnePoll in August 2024 to 500 UK SME owners/decision makers.

Where data refers to Regions they have been grouped as the following :

North
Scotland
North-East
North-West
Yorkshire and the Humber

Midlands and Wales
East Midlands
West Midlands
Wales

South
South East
South West
East of England

London
Stands alone

And Business Sectors refer to the following :

Business & Tech
Accounting, banking and finance
Business, consulting and management
Information research and analysis
Information technology
Recruitment and HR
Insurance and pensions
Sales

Public Sector & Law
Charity and voluntary work
Healthcare
Public services and administration
Social care
Teaching and education
Law

Arts & Media
Creative arts and design
Marketing, advertising and PR
Media and internet
Performing arts
Publishing and journalism
Other sector

Energy & Industrial
Energy and utilities
Engineering and manufacturing
Environment and agriculture
Property and construction
Science and pharmaceuticals
Transport and logistics

Leisure & Retail
Hospitality and events management
Leisure, sport and tourism
Retail