Forefront by TSMP: Flexible Work Arrangements: An Unmitigated Disaster for Employers?

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Forefront by TSMP

3 April 2024

Flexible Work Arrangements: An Unmitigated Disaster for Employers?

Singapore will soon launch guidelines on flexible work arrangements (FWAs). Here’s why employers and employees should navigate it to their advantage.

By Stefanie Yuen Thio, Elizabeth Tan

Cover photo credit: Ketut Subiyanto / Pexels

Elizabeth Tan shares how she and Stefanie Yuen Thio unpacked the implications of the upcoming guidelines for flexible work arrangements in this month's Forefront.

A female pre-school teacher – a job in which there is a world-wide shortage – loves her job but has young children who need her to be around more during critical schooling years. She would prefer working three days a week but her employer does not provide that option. Another woman is a single, high-flying executive. But her father has just been diagnosed with cancer and needs her to accompany him for doctors’ visits and treatment. Must these women – a version of whose stories thousands of other individuals are living – choose between job and family?

Putting on hold or giving up their careers is the reality for some caregivers – predominantly women – who are unable to balance the demands made of them professionally and personally. An estimated 261,700 women in Singapore aged between 25 and 64 are unemployed, and the 2023 Labour Force Report revealed that the top reasons are housework and caring for children.

This should matter to us all. Gender equality issues aside, it comes with an economic cost. A 2015 McKinsey study had estimated that if women participated in the economy identically to men, this would add US$28 trillion to the global GDP by 2025. Meanwhile, the latest National Business Survey identified both the availability and retention of manpower as top challenges for businesses in Singapore.

Are Singapore’s upcoming tripartite guidelines on flexible work arrangements (FWAs) the answer?

 

The Ability to Flex

Employees want flexibility. The Pew Research Centre found that not having enough flexibility was one of the top reasons for The Great Resignation. In Singapore, a 2023 survey by jobs portal Indeed found that 85 per cent of workers in Singapore desired flexibility at work.

The pandemic forced the world to work from home (WFH), but some employers, including bulge bracket banks like JP Morgan, have since required staff to return to on-site work. But the battle is not between WFH militant workers and control freak employers. Flexibility is much more than that – it encompasses nuanced adjustments in working times, location or workload, and could take the form of telecommuting, part-time work, job-sharing or staggered work hours, or any combination of these. This allows work arrangements to be tailored for both businesses and employees.

FWAs may therefore be the key to opening up job possibilities previously inaccessible to some employees. For women who bear the burden of housework and childcare, FWAs would let them return to the workforce at a pace, time and location that suits their schedules.

This is not a pro-employee pitch. The World Bank estimates that global GDP could be increased by 20 per cent simply by closing the gender gap. 83 per cent of companies in Singapore report talent shortage and difficulty in hiring. Employers complain that their business costs are growing faster than profits, especially painful in the current interest rate environment. If we cannot hire and retain locally, Singapore will need to look abroad for manpower. This brings a slew of other socioeconomic challenges with Singapore trying to balance its core identity while continuing to be an open and global city.

The question is not whether we should have FWA, but how.

Flexible work can make employers nervous. Ensuring workforce productivity, fostering collaboration and learning, and building work culture are just some headline concerns. They also pose a risk for employees, who worry about being overlooked for promotions and not receiving appropriate training and guidance.

The tripartite guidelines to be released later this year will require employers to fairly and reasonably consider requests for FWAs. While lacking strong legislative teeth, they are a clear signal that FWAs are going to be a permanent feature in the Singapore business landscape.

Quite apart from the possible sanctions that might be imposed for flouting the guidelines, businesses who want to stay competitive – and being able to attract talent must surely be integral to this – would do well to implement the guidelines, or risk losing out to competitors.

 

Making flexible work arrangements work

If Singapore businesses are going to make FWAs work, a few things must happen, beyond merely considering FWA requests.

Each company will first need to decide and communicate what FWAs their businesses can accommodate. Big organisations have the advantage of a large headcount and could allow part-time work requests and job sharing among employees. Smaller businesses may need to sign up for a programme where employers deploy from a pool of shared workers with the relevant capabilities but who want to work at different times.

Managers who could previously supervise employees on-site will need to develop new models for assessing productivity. This will allow them to evaluate whether the FWAs they have implemented make economic sense, and also provide clear indicators of how performance is assessed and promotions decided. These new structures should be communicated to employees, and regular performance reviews should include a discussion on what is working and what is not.

Implemented correctly, FWAs have the potential to help businesses reach a wider talent pool by creating roles which are more varied in scope and time. It would also help with talent retention, as flexibility at work has been consistently deemed important by millennials and Gen Zers in surveys. Companies, who may not have considered the hidden costs of having to source and train a revolving door of new hires in their P&L, would save money by having a more stable work force. Happier workers have been shown to lead to better overall productivity.

More broadly, normalising FWAs could also reduce the gender gap at work. Women who bear the brunt of home responsibilities would be able to rejoin or stay in the workforce. Men could also use the flexibility to take on more of these caregiving duties. Together, this would allow families to split their caregiving roles in a way that works for them.

The implementation of FWAs will not be simple. Employers will be looking at difficult conversations, some impractical FWA requests, and organisation-wide mindset shifts before they find a working equilibrium. Employees will have to recalibrate their expectations on promotions and pay, and even where WFA requests are readily acceded to, they will have to make more of an effort to have their contributions seen and valued.

Flexibility at work may therefore bring more pain than it will reward in the short term. But as a country with no natural resource beyond human capital, this is a problem that Singapore businesses cannot afford not to address.