“Flexibility allows us to meet peak demands with reduced staffing costs.”

- Susan O' Brien, Vice President, Assistant Treasurer, GE Capital (2001)

In 2002, Hewlett Packard India (HP India)1 was ranked the third best employer in India by the Best Employers in India Survey2. The survey studied the extent of employee satisfaction with regard to seven factors including the culture and purpose of a company, its work environment, relationships between the employees, the nature of work, rewards and recognition, work-life balance and growth and development opportunities. What distinguished HP India from other best employers was its consideration of the personal needs of its employees, and the 'flexible work options" policy adopted by the company.

HP India offered its employees almost all forms of flexible work options (FWO). It allowed its employees to work part-time or for flexible hours, especially young mothers. For instance, Sujata Sundaresan, a financial analyst at HP India, started working part time after maternity. HP India also allowed telecommuting, which allowed its employees to come to the office only for half a day and work from home for the rest of the day. Employees were also allowed to return to the normal schedule after working as per any of the flexibility options for a specified time period.

A few companies, both multinational as well as domestic started introducing FWOs in some form or another since late 1990s (Refer Exhibit I). For instance, Procter & Gamble India3 (P&G India), ranked the second best employer in India by the Best Employers in India 2002 Survey, had introduced flexible work options in 1999. Initially, the company offered flexitime and sabbatical leave and included telecommuting options among these by late 2001. According to the survey, ICICI, the fourth best employer in India, also offered some forms of flexible work options, especially for women. Since a majority of ICICI?s employees were women, it allowed them to work part time, keeping in mind their domestic responsibilities.

Though the concept of flexible work options evolved in the early 1960s in the US, it started gaining popularity only during the 1990s. By the late 1990s, almost all leading companies in different industries across the world particularly in the US and Europe, had started offering a variety of work options. The concept of flexible work options seemed to be more suitable for software companies and consultancies due to the nature of work. While consultants were allowed to work from home, software engineers and developers came to office at regular intervals to attend meetings and to catch up with their teams.

'Flexible work' meant the different work styles and employment practices. It encompassed all types of employment practices other than conventional '9am-to-5pm' jobs. FWOs enabled employees to strike a balance between their professional and personal lives, since it allowed them to spend more time with their families. At the same time, FWOs made the employers more competitive.

During the 1960s, many companies in the US implemented flexible work schedules, and at the same time, other types of work options apart from flexible work hours, were evolved. FWOs were generally classified as flexible location, time and contracts. The classification varied from country to country and from firm to firm, depending on the nature of the business.

Flexible location referred to working at a location which is most suitable or favourable for a particular task. There were three types of location flexibility, including working on the move, working from home, and working from telecentres or satellite offices. Various forms of flexible location work options included telecommuting, working from home, location-independent working, teleworking, remote working and anywhere/anytime working. This option allowed employees to do a part of the job off-site, generally from home. Such an option was ideal for jobs that were clearly defined and could be measured. Under this option, the employer and the employee mutually agreed upon the off-site and on-site working hours. However, this option required investments either by the employer, employee or both, in terms of technology, say, personal computers/laptops, Internet connection, and other equipment.

Advancements in IT made 'working on the move' possible. Some of the most popular devices used for working on the move were personal digital assistants like the laptops/notebooks, palmtops, desktop replacement PCs6 and other types of portable computers. Working from telecentres and satellite offices was also gaining popularity. Telecentres were common offices in which the facilities were shared by the employees of several companies or different departments of the same company. Satellite offices were offices set up far from the major centers of a company and were all linked through the satellite to the main office. These offices were mostly used for routine back office jobs. The creation of satellite offices was based on the geographical separation of front office and back office jobs.

Flexible time was the oldest and most widely used FWO. It could be further divided into options like variable hours, restructured hours, reduced working hours and leave. Variable hours referred to the option of varying the number of working hours. There were four types of variable hours -flexitime, annualized hours, zero hours and time accounts.

Flexitime required the employee to work for a fixed number of hours - 'core hours' - with an option of working during any part of the working day. For example, an employee may had to work for eight hours a day at any time between 7 a.m. to 7 p.m. (Refer Table I for examples of flexitime). According to the annualized hours option, the employee and employer agreed upon the total working hours per annum. There were several forms of the annualized work hours option, and the most common one was based on 35 to 40 working hours per week, multiplied by the number of working weeks which would equal the agreed total annual working hours already agreed upon, excluding public holidays and annual leave. Another common form of this option was a period of intense working followed by a period of rest. This was adopted by the oil industry where the employees worked for two weeks, and then took the next two weeks off.

Table I
Examples of Flexitime Arrangements

Source: hr.uchicago.edu

The zero hours work option was also known as 'on-call arrangement.' As per this arrangement, employees were called for work only when required. In this case, it was neither mandatory for the employer to make employees work for a fixed number of hours in a year, nor was the employee under obligation to do the work he was asked to. This arrangement was mostly used with retired employees and doctors. Doctors in specialized fields like anesthesia, cardiology and the like, worked for different hospitals on calls. This work option could also be considered a flexible contract, as the employment was temporary.

The time accounts option was the most flexible among all flexitime options. According to this option, employees could take compensatory leave against the extra time they had worked for. They could build 'time credits' in their account, which could be redeemed at anytime they wished. The time accounts option was considered to be a flexible form of compressed working week or annualized hours. However, to appropriately limit the number of holidays for employees, the employers often limited the maximum credits and debits.

The option of restructured hours was comprised of the compressed workweek option. The most common option under the compressed work week was the '4/10' schedule, where in an employee had to work for 10 hours for 4 days in a week and would get the fifth day off (in a 5-day week setup). There was also the '9/80' schedule in which the employee had to work 4 days in a week for 9 hours in all and he could either take the fifth day off or work for 8 hours on that day. In the UK, this system was called 'nine-day fortnight', which meant nine working days in every two weeks. In a 9/80 schedule, there were 80 work hours to be completed in 9 days.

There were four forms of the reduced work hours option - part-time, job-share, term-time working and phased retirement. The part-time option required an employee to work for a few hours per day or week. Job-share was a form of part-time employment where one job was shared by two employees. A job could be shared by more than two people, but this option worked out best with two people. The distribution of work in this case could be either equal or unequal. The term-time working option was in accordance with the school holidays. In addition to 4-6 weeks of annual paid holidays, 7-9 weeks of unpaid leave was granted to employees with school-going children. 

Phased retirement was an option that was offered to employees a few years before retirement, when they could start working for fewer hours per day and postpone the date of retirement. This made gradual retirement possible by reducing full-time work in phases over a number of years as agreed upon by the employer and the employee. However, this option was not very popular because reduced working hours also meant reduced pay.

The flexible time work options included various leave options including maternity/paternity leave, sabbaticals and career breaks. Parental leave, especially maternity leave, was the most commonly availed leave option. However, paternity leave was not very common. Maternity leave helped employers to retain potential women employees and also protect the cost of training apart from adhering to legal regulations.

Sabbatical was another popular leave option, which was generally meant for upgrading ones skills, either academic or technical. In many countries, sabbaticals were granted for a year or more for pursuing further studies, writing a book and so on. Career break was an unpaid leave granted for one year or more than that, during which the contract of employment was suspended. In addition, this break was not considered at the time of calculation of benefits like pension entitlements. There were other leave options including bereavement and marriage leave. Bereavement leave was granted to employees on the death of a family member. Though there was no legal provision for bereavement leave, many companies offered such an option on different terms and conditions. Marriage leave was a paid leave offered at the time of an employee's wedding in addition to the annual leave.

Flexibility in contract was similar to all other options and referred to the contracts for various flexible options into which the employee and employer had entered. Apart from these, fixed term contracts, use of casual labor, outsourcing and other forms of contracts were in existence. Using agency labor was another form of contract, wherein an individual entered into a contract with an employment agency that finds him work on contractual basis. In addition, some companies used the services of people who were previously employed by them, on a job-to-job basis.

Yet another form of contract was the 'company first' contract, under which an individual had to work for a specific number of hours for a company that first called him for his services. When the company did not need his services, the individual was free to do other jobs for any other company. The annual hours option, term-time option, zero hours option described above were also, sometimes, categorized under flexible contracts.

According to analysts, HP India was the most flexible workplace. The company offered all types of FWOs – from flexitime to sabbaticals. HP India allowed its employees to start their day within two hours from 8 am on a regular 8-hour working day. The company allowed job sharing whereby any two employees could work for 20-40 hours per week on one job. Employees could even work half-a-day in office and the other half from any location. Sameer Wadhwan (Wadhawan), General Manager, HR, explained the rationale behind this: “The issue is not control, but facilitation, and of motivating our independent, knowledgeable and creative employees.”

HP India also provided reduced hours employment and various leave options. Apart from the statutory leaves, the company offered marriage leave of 10 days, study leave for competitive exams for 10 days, eight weeks for legal adoption of a child, and five days each for paternity and for bereavement. The company also offered leave beyond the specified time depending on individual requirements.

HP India treated both, employees who worked for flexible hours and the regular employees equally. A senior executive of the company commented, “HP is an equal opportunities employer. There are many flexi-workers here, mothers with babies, and even others. But no one treats them as any less or thinks that they are not contributing.” Employees also had the option of switching from flexible work schedule to the regular work schedule. For instance, Vasudha Duggal, a quality specialist, opted for flexitime due to personal reasons, and came back to the regular schedule later on. Wadhawan also availed of the flexible leave option when he had to settle his daughter in a school.

Another multinational company in India, which offered FWOs, was P&G India. The Indian subsidiary of Procter and Gamble, began to offer FWOs in 1999, as a part of adopting the new culture 'Stretch, Innovation, and Speed (SIS).' The company offered FWOs under the Flexible Work Arrangement (FWA) Scheme. This enabled the company to retain highly talented employees. Also, this made India the best among Asian countries as a global source of talent for P&G.

Initially, the company started offering its employees flexitime options. Employees who wished to avail themselves of the flexitime options, discussed with their managers about which part of the day they would have to work for, and accordingly, put in 8.5 hours in a working day. It also offered a three-month sabbatical leave to employees who had been employed by the company for at least 5 years. P&G introduced the 'work from home' option in late 2001. According to this option, employees could work from home once in a week. P&G also allowed its employees to work half-a-day, but were paid accordingly.

According to analysts, both HP and P&G adopted FWOs early, as they were US-based companies. The parent companies, in a move to globalize their culture and retain talented employees, introduced FWOs in their Indian subsidiaries. While both these companies offered FWOs to all employees, the Indian companies seemed to focus more on their women employees. ICICI was one of the few Indian companies, which offered flexitime as well as the 'work from home' option to their employees. In 2001, 8% of ICICI employees availed of these options. It also implemented flexi-hours in the companies formed by a joint venture with other companies, and its subsidiaries.

The sales department of ICICI Prudential8 shifted its timings from 9 am – 6 p.m. to 11 am – 8 p.m. Vasant Sanzgiri (Sanzgiri) of Human Resources Department said: “There is no point in asking employees to come at 9 am. Their work depends on customer convenience and actually begins at 11 am. This way, a lot more work gets done than by sticking to the 9 to 6 schedule.” Employees, especially women, seemed to benefit significantly by this arrangement. Sanzgiri said, “The staggered timing lets them avoid the rush hour and commute in comfort and the late hours give them the flexibility to complete their housework before coming to work.”

ICICI offered other FWOs keeping the women employees interests. The company had a high number of women executives in the senior management than the corporate India average of 3%. Employees could also work in different shifts at ICICI Bank9, which had longer work hours for improved customer service. For instance, Priti Kucheria, a human resource professional at ICICI Prudential Life Insurance, started working half-a-day after a few years of her career at the company. She worked for four hours a day and earned Rs 75,000 per month.

FWOs were also popular in the retail industry in India. The retail industry had longer work hours and also experienced cycles of high and low activity. These characteristics of the industry seemed to have forced it to adopt FWOs. Because the company's working hours were very long, the retail chains had employees working in different shifts. Ajay Mehra, Vice President, Marketing, Westside, a chain of retail stores explained, “Flexi-workers allow us to handle peak loads and allow us for longer working hours.” Westside also employed people on contractual basis who worked for only Westside during the peak business season. This eliminated some of the
unnecessary financial burden of the company.

In India, FWOs were popular in the financial services industry too. Many flexi workers were engaged in selling mutual funds for leading financial service companies. For instance, Rupa Fernandes, quit her job at Tata Yellow Pages after maternity, and started selling mutual funds for ICICI Prudential and holiday resorts for Thomas Cook. GE Capital International Services had also introduced FWOs in early 2001, in its human resources and credit departments. This enabled the company to save costs in terms of support staff for offering professional, medical, provident fund and other benefits to the employees. It also saved the physical real estate in the workstation for the employees.

FWOs were also helpful for the dotcom and content development industry. There were many women employees developing content at home for various dotcoms. The Internet enabled affective global connectivity access, which, in turn, fueled the popularity of FWOs.

FWOs seemed to be the only way for employees to devote some time for their families. These also enabled employers to become „employers of choice? by adopting family-friendly policies. Many large corporations across the globe seemed to have realized the cost-effectiveness of, and the role-played by FWOs in boosting the morale of their employees (Refer Exhibit II).

By the late 1990s, several companies belonging to different industries in developed countries offered FWOs to their employees, enabling them to balance their professional and personal lives. A survey was conducted by RedForWomen Universal Consulting Research10 for industries most conducive for FWOs. It reported 44 such industries, with some of the top ones being healthcare, insurance, dotcom, retail, media and entertainment, and travel and tourism.

According to analysts, by 2006, the 9 to 5 work schedule was not likely to be followed by employees in industries like software, manufacturing etc. in most of the developed countries. They felt that working hours would eventually become much more flexible and working from home and satellite offices would become a popular practice. 

Offering FWOs was beneficial for employers because it acted as an effective employee retention strategy. In the European region, where labor shortage was increasing, FWOs seemed to have come to the rescue of employers. In addition, work-life balance and corporate social responsibility seemed to gain popularity. Iain Herbertson, MD of Manpower PLC11 said, “These issues were beginning to move from political concepts to real social issues that are influencing the attitudes of individuals towards employment.”

FWOs drew their share of criticism as well. In certain organizations, employees who did not opt for FWOs in spite of being offered by these company, felt that people who opted for those were not serious about their careers, and thus, did not prefer opting for FWOs. Therefore, many organizations found that their FWOs, were going waste. For example, to reduce energy consumption and operating costs, the US Federal Government introduced telecommuting option in 1990 for its 1.8 million employees. However, even in 2000, only 1% of the employees were using the option.

Analysts felt that the reason why such a low number of people were opting for telecommuting was that the managers resisted such an option. Research psychologist Wendell Joice, Ph.D., of the US General Services Administration?s Office of Government-wide policies said, “Some managers may not trust their employees to do their work. Some may just be lonely. Some may not like change.” This belief was strengthened by Tammy D Allen, Ph.D. a professor of psychology, who conducted a survey with about 300 women to study the connection between the profession-family conflict that women professionals usually face, and employers? efforts towards helping
them maintain a balance between their professional and personal lives. The study revealed that, “Employees whose employers seemed to put work first had more work-family conflict, no matter how many family-friendly benefits, such as flexible scheduling or dependent care, were offered.”

On the other hand, in the developing countries, particularly in India, only a few multinationals and leading Indian companies were offering FWOs. At the same time, there was a significant increase in the number of women employees. With the introduction of the part-time work option, more women were able to take up jobs and manage both their careers and homes. Analysts felt that the Government of India, as in the US and Europe should also increase the popularity of FWOs by introducing the concept in all government organizations. The conventional belief that spending some specific hours at work place is quintessential for productivity still seemed to prevail, which had to be changed for the FWOs to be successful.

1. Explain the concept of FWOs and describe the various types of FWOs. Critically evaluate the reasons for the increased adoption of FWOs during the late 1990s.

2. “Flexitime is not just a company perk or a negotiation for time taken off. It is a strategic business tool that contributes to the improvement of productivity and quality of life for employees.” In the light of the above statement, discuss the advantages and disadvantages of FWOs for the employees as well as the employers.

3. The concept of FWOs has not yet gained popularity in India. The absence of such options seemed to have forced many people to quit their jobs, particularly women. What do you think is the future of FWOs in India? Give suggestions for making the concept more popular in India.

Exhibit I
Indian Companies Offering FWOs

Source: IBS Center for Management Research

Exhibit II
Global Corporations Offering FWOs

Source: Adapted from www.context.org