Flexibility, productivity and wellbeing in the workplace

Same work, new focus

There are many questions. Should it be any different from before? Does more flexibility mean happier and healthier employees? Is this good for the overall business?

Well, it is certainly no longer a case of having to prove the importance of wellbeing to the success of a business and its positive impact on output and productivity. Rather, employers need to determine the right levers to pull in order to offer the optimal employee experience. 

When we conducted our recent UK employee market survey, we recognised that the pandemic has presented a unique opportunity to analyse important aspects of how we work, and many global organisations have had to adopt new working practices in order to stay in business. More than 2,000 employees across the UK responded to our survey, making up a representative sample of the UK workforce.^*

The impact on some sectors and groups of people has been noticeably stronger. Many companies could not have their employees work from home; but rather than overstating what is already out there, our focus is on what we can learn from employees’ experiences - and, more importantly, what they want going forward.

Key findings

Although wellbeing and productivity are historically difficult to measure accurately over time, there are ways by which we can estimate the effect of certain factors on both, through the quantitative and sentiment data that our research provides. 

"Our survey suggests that, on average, employees admit they are only productive for about 60% of their day. Put differently, organisations paying for a 7.5-hour workday only yield around 4.5 hours of work."

This is an oversimplification, of course, but it is a starting point for putting the issue of productivity in to perspective. And in the spirit of keeping things simple, let’s call this difference in paid work and actual work the “productivity gap”.

Just as we cannot take the average productivity gap for a diverse group of employees in different circumstances and apply that to a specific situation, we also cannot suggest a blanket solution to this issue. Some of the key findings on productivity from our data are:

• there is no overall material difference in productivity between those working in their normal place of work and those working from home; 
• part-time employees tend to be slightly more productive than those who are employed full-time; and
• there is a positive correlation between the size of a company and productivity. This might indicate that competition for positions has a bigger impact on productivity than a smaller firm, where there are fewer people to do the work.

The “trouble” with the youth

On average, we found that younger employees (under 35) felt less productive by about 10 percentage points than older employees. In fact, there is a positive correlation between age and productivity across all the age ranges we looked at:

Say, the goal is to create a hybrid working model that allows for flexibility without sacrificing productivity. If we were to design such a model on the back of these findings, and solely based on the demographic of age, we should then be able to add other demographical factors over time, eventually allowing for all possible scenarios. However, there is a risk that we could get it very wrong, unless we understand what sits behind these numbers. Individual factors almost never operate in a vacuum and our approach should be holistic; we should ask why productivity and age have a particular relationship – regardless of industry or sector.

It is important to keep in mind that factors created by the pandemic, which would not normally be an issue, have influenced the sentiments making up our data, and some of these factors will no longer apply in a post-pandemic world. For example, you are used to working in an office but have been working from home for the last twelve months. How productive are you now compared to before? How do we determine the ideal future working agreement, without letting these factors impair our understanding?

Below, let’s consider one of the factors that might explain these findings regarding age. It is something often overlooked by the wellbeing industry, but highlighted by the Covid pandemic: community.

Impact of community and relationships on mental wellbeing 

Numerous studies have found a causal link between healthy relationships, the feeling of belonging to a community, and longevity or overall wellbeing. According to our survey, the impact on wellbeing of extended physical separation from work colleagues, by age group, was as follows:

Separation from colleagues seems to affect the wellbeing of younger employees the most, so it makes sense that their productivity would also suffer - as seen earlier, with 18-24 year olds only being productive for 54% of the day. 

To support this further, we found that the number one reason for those who wanted to mostly work from the office in the future (so, for things to go back to normal), is to be with their colleagues. In contrast, those who preferred to work from home going forward (also the middle-aged group) expressed that productivity was their number one reason to do so.

There are two main environments resulting from the home versus office world we live in: a family or self-environment, and the other a colleague environment. Both of these are a type of community and each is optimal for a certain type of employee. 

"Find the optimal mix of these communities for your workforce and you would be a good way down the track of finding the hybrid-working model that works for you."

Intuitively, the data we gathered makes sense. Anomalies and exceptions do exist, but in general, younger employees tend to be in the phase of their life where they are physically breaking away from their family or the community that nurtured them from birth, in order to discover new communities to build their careers. The most important of these is the colleague community. 

As time goes on, a new stage of life begins with newly defined priorities and responsibilities: our romantic relationships, children, and so on. While still important, our colleague community now takes second place on the list. In support of this reasoning, our data shows that another switch happens for the 65+ age group, who revert back to preferring to work mostly in the office, or with colleagues.

So, where do we go from here?

All of the above only explains the impact of age, but what about ethnicity, gender and sexuality? Do location, physical environment or the size of an organisation have an impact on productivity, or does it make us prefer one community over another? 

We found some interesting disparities in the productivity gap between the different groups that make up these other demographics, but we could not establish a significant relationship between the subsequent impact of separation from work colleagues and wellbeing. 
 
Achieving our goal, however, would never be as simple as having younger workers in the office and middle-aged workers at home. Many organisations will want to ensure that the appropriate guidance and mentoring from more experienced colleagues is in place so that the new generation of employees can properly manage their responsibilities, and gain invaluable guidance in the early stages of their career. 

"One of the many potential options to explore, could be to incentivise experienced employees to step out of their own preferred working environments to contribute to the development of less experienced colleagues."

However, the short-term productivity cost of incentivisation would be an important factor to consider. It will most certainly be interesting to see what solutions organisations come up with to accommodate and reflect the transformation of the workplace.

But alongside this, to truly understand and decode your DNA as an employer – what makes you, you – you must recognise how you are unique and how that is expressed in this new world we now find ourselves in. At Barnett Waddingham, we translate and analyse your DNA to help you take the most effective approach to deliver the right flexible working outcome, and in turn make better decisions by your employees.

Do you think we are closer to our goal of finding a suitable and productive flexible working option?

_{* Barnett Waddingham conducted a survey of 2,001 employees in the UK between 29 April and 4 May 2021, asking them about the future of work. All respondents were over 18, and sole traders were excluded.}