Does flexible working reduce or increase productivity?

If I let my team work flexibly, will it increase or decrease business productivity?

We hear this question a lot and that’s why we’re going to summarise the Government’s most recent assessment of flexible working for you.

In October 2024, the UK Government published an Impact Assessment as part of its commitment to make flexible working the default from day one of employment – unless it is not reasonably feasible for the employer to accommodate it.

Here’s a link to the assessment:
https://assets.publishing.service.gov.uk/media/6712491cb40d67191077b36d/impact-assessment-make-flexible-working-the-default-_where-not-unreasonable_.pdf

What does the report say about flexible working and productivity?

According to the Government’s assessment, the answer is clear: flexible working generally increases productivity when implemented thoughtfully and where feasible.

Here are the key findings:

Employers report productivity gains

• Nearly 40% of organisations say home or hybrid working has increased productivity or efficiency.
• Only 13% say it has reduced productivity.

A survey by the University of Birmingham found that:

• 76.5% of managers believe flexible working increases productivity.
• 62.8% believe it boosts motivation.
• 51.8% say it improves concentration.

Employees are more motivated and satisfied

• 89% of employees surveyed by HSBC say flexible working is a key motivator, even more than financial incentives.
• Flexible working helps employees to feel valued and trusted, which in turn improves engagement and performance.

It boosts recruitment and retention

• Offering flexible roles can attract up to 30% more applicants, especially from underrepresented or untapped groups.
• It helps to retain talent too—particularly parents, carers, older workers and those approaching retirement.

It’s good for business performance

The assessment highlights wider business benefits, including:

• Reduced absenteeism.
• Lower staff turnover.
• Better skill retention.
• Improved wellbeing, which leads to sustained performance over time.

What should your takeaway be?

Flexible working, when managed well and aligned with business needs, can be a powerful lever to improve productivity.

If you’ve been unsure as to whether to offer more flexibility, this report offers strong evidence that it can be a win-win for both employers and employees.

Need help with creating your flexible working policy?

Get in touch for a confidential chat today.