Understanding the economic benefits of workforce agility

June 2013

The 22 founder companies of the Agile Future Forum (AFF) differ in terms of sector, size and location. We all share a common view, however, that workforce agility is generating significant and tangible economic benefits for our businesses.

We set out to investigate the benefits we already enjoyed from our workforce agility practices, to identify additional potential value, and to understand how we could help other businesses across the economy replicate good practices.

With support from McKinsey & Company, one of our members, we identified substantial value. In the areas we reviewed, we are enjoying benefits equivalent to 3-13% of workforce costs. Our research also suggested potential further value to be had from taking an exciting all-new approach to agile working: we identified opportunities across sectors for potential value equivalent to 3-7% of workforce costs and sales uplift of up to 11%. But the realisation of these benefits requires a different approach.

Historically, workforce agility (or flexibility as it is more commonly known) has largely been positioned as an employee benefit, part of the employee value proposition, rather than a way for companies to meet their strategic business goals in a challenging business environment.

That needs to change – this can be about benefits to businesses, as well as employees. Business leaders, rather than simply HR, should lead the development of agility practices, starting with a clearunderstanding of the needs of the business and their workforce. We have developed a new approach that enables organisations to consider workforce agility in this way. Our in depth testing of this approach across the AFF founding companies demonstrates that it works across all sectors and size of business.

I hope that the benefits outlined here, along with the tools and golden rules that we have developed to support other organisations, demonstrate that it is possible to develop a way of operating that is valuable for businesses and employees alike and, as a result, to the UK economy. I encourage executives to reflect on what we have developed and see whether it might be of benefit to their businesses.

We would like as many companies as possible to join us: those who are already operating in an agile way to share their learning and experience; and those who have further to go and who might benefit from the work we have begun.

So, I encourage you to spend five minutes to log on to our website, ‘Take the Test’ and see how agile your company is today.

INTRODUCTION

Sir Winfried Bischoff - Chairman, Financial Reporting Council.

Nick Clegg, Deputy Prime Minister, asked me to consider establishing and chairing a group of Chief Executives and Chairmen from leading employers to consider the issue of workforce agility and how UK business might support the growth of workforce agility across UK plc.

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The Agile Future ForumThe Agile Future Forum (AFF) is a business-to-business initiative consisting of 22 founder members. They reflect a broad range of sectors, sizes and geographical spread and all have a track record of managing workforce agility in the their organisation. Between them, they employ over half a million people across the UK and, as such, are a microcosm of UK plc.

The external business context has changed significantly since the 1980s. In terms of technology, changing customer demands, demography and globalisation, a number of shifting trends have created new challenges and opportunities for organisations. As the external context becomes increasingly complex, traditional models of work will come under strain. New, more agile models of work will be required as the need for agility becomes a key focus of the modern competitive company.

All AFF founder organisations believe that being more agile has increased their ability to compete in a global market and is currently generating significant and tangible economic benefits for their businesses.

Our ambition therefore is to define the business value of workforce agility in supporting the competitiveness of UK plc and provide the leadership and practical support required to increase agile working practices across UK plc.

We aim to achieve this purpose by:

• Change UK cultural mindset: from flexibility to agility.

• Support the increase of agile working practices across the UK.

• Position the UK as one of the most agile countries in the world.

CONTEXTTHE AGILE FUTURE FORUM FOUNDER MEMBERS

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Who is employed?

Whe

re a

re th

ey w

orki

ng?

Wha

t do

they

do?

When do they work?

26. Secondments (Temporary roles)

27. Self-selection (Employees select own tasks)

28. Job rotation (Cycling staff through roles)

29. Multi-skilling (Training for staff to fulfil multiple roles)

30. Rapid re-training (Capacity to rapidly re-train staff for change in role)

31. Skills-based tasking (Staff assessed and assigned tasks by competencies not roles)

32. Flexi-teams (No fixed teams - teams re-formed to meet specific needs)

1. Outsourcing (Contracting third-party companies)

2. Sharing / partnering (Joint labour pool with peers)

3. Utilising former employees

4. Crowd-sourcing (Using volunteers/ non-employees)

5. Fixed-term contracts (staff employed to temporarily fill a role)

6. Freelance (directly sourced individuals)

7. Bidding on tasks (free market bidding on tasks by non-employees)

8. Hot desks (Mobile within a fixed office)

9. Renting work-hub desks (Renting office space from external provider)

10. Mobile (No base; work remotely)

11. Multi-site (Based at multiple locations)

12. Home working (Based at home for a fixed % of time)

13. Mixed seating (Co-locating different roles)

Times

Role

Loca

tion

Source

Agile

Deeply understand the needs of each part of the workforce: different workforce segments often have different preferences, and these needs to be thoroughly understood.

Conventional view of “flexible working“

Value for both

Value for employers

Value for employees

Diagram 1 - Agility practices can often be configured to generate value for both the employer and the employee

Define the business needs explicitly: there needs to be a clear definition of how workforce agility contributes to business objectives, economic drivers and value – current & potential.

Diagram 2 - Universe of potential practices to support an agile workforce

14. Regular part-time (Fixed, part-time contracts; pro-rated benefits to full-time; not role sharing)

15. Self-rostering (Employees select own hours - often within a fixed shift pattern)

16. Shift work (Groups of employees do the same jobs in rotation)

17. Varied working hours (Irregular start / end times or compressed schedule)

18. Flexitime (Weekly number of hours fixed but choice over when they are worked)

19. Total ‘time worked’ account (Total # hours contracted over a long period; employees can ‘complete’ faster to discharge their responsibilities)

20. Staged retirement (Gradual reduction in hours)

21. Job-sharing (Multiple employees cover one role)

22. Overtime (Standard overtime capacity)

23. Seasonal blocks (Working hours follow seasonal changes in demand)

24. Voluntary reduced time (Offering extra unpaid leave)

25. Commission outcomes (No fixed hours, only an output target)

Our findings

What is workforce agility and where are companies now?

Workforce agility allows an organisation to establish the optimal workforce to support an organisation’s objectives. We define agile working practices along four dimensions:

• Time: when do they work? (e.g. part-time working; staged retirement).

• Location: where do they work? (e.g. people working across multiple sites).

• Role: what do they do? (e.g. multi-skilling).

• Source: who is employed? (e.g. using contractors or temps). Workplace flexibility has traditionally been defined somewhat narrowly: usually as a benefit for employees and a cost to employers. We believe that agile practices can be configured to generate value for both the employer and the employee.

According to the CBI’s 2011 Employment Trends Survey of businesses, 96% of UK companies offered at least one type of flexible working practices and many companies offered several. However, since flexible practices have been developed with an employee, rather than business focus, companies are often wary of extending them further, perceiving a risk to the business. For example, around a third of UK companies are reluctant to extend the right to request flexible working arrangements to all employees: 32% of companies surveyed suggested that doing so would have a negative impact on productivity, while 38% said it would increase labour costs.

It is rare for companies to take a business-focused approach, assessing the potential business value of an agile workforce – and using that to define an agile working approach which works for the business as well as for employees.

OUR FINDINGS

With little available research into how businesses themselves can benefit from agile working, the perception of it as a cost and threat has remained largely unchallenged until now. In response, the AFF set out to identify the business benefits of agile working practices.

What did the AFF do to identify current and potential value?

The AFF has developed an approach to help understand the business benefits of agile working. We have started to test the approach within our AFF member organisations, covering a variety of workplaces, industries, and company sizes, to give an indication of the broader relevance of the findings to UK PLC.

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Significant value is already being realised in the UK. In our in-depth studies agile working practices currently generate value equivalent to 3-13% of workforce costs.1

For example,

• A Tesco superstore currently uses part-time working and multi-skilling practices to meet customer demand more effectively, thereby generating value equivalent to about 13% of total workforce costs.

• A head office function of Lloyds Banking Group currently generates value equivalent to ~7% of total workforce costs through using freelancers to meet seasonal demand and locating staff across multiple sites to lower premise costs.

• A Ford Motor Company Ltd manufacturing plant saves the equivalent of about 3% of total plant costs by using outsourcing, flexible absence cover and alternative maintenance shifts to achieve cover in line with plant needs.

Companies found the push to quantify benefits new and helpful. We also identified organisational benefits in non-commercial areas. For example, at HM Treasury an agile pool of experts allows a fast response to emergencies. Up to 40 internal staff belong to a financial crisis contingency reserve, which the Treasury can immediately draw on for relevant skills and expertise to bolster the standing teams in the event of a banking crisis (for example to cover recent European banking priority demands).

1 The value quoted was not always drawn from cost savings, but has been expressed as a percentage of costs to demonstrate their significance.

The research included:

• Collating examples from AFF members of agile working practices and the business benefits that have resulted, some of which are described in this brochure [See diagram on previous page.

• Developing a methodology to identify the benefits of agile working, building on interviews with global experts, reviews of existing literature and a gathering of international examples of agile working.

• Deploying that methodology in depth by reviewing current and potential agile working practices at different types of workplaces – a banking corporate head office, a retail store, an automotive manufacturing plant and a telecoms call centre.

• Running lighter-touch workshops to test the applicability of the methodology to SMEs, a set of professional services firms and the public sector.

• Running seminars to help other AFF members to apply the methodology with minimal external help, including developing a toolkit for AFF members.

How do agile workforces generate value? What is the opportunity?

The research found that agile workforces can drive business benefits in a variety of ways. Common examples include:

• Better matching the workforce to fluctuations in demand – the most substantial source of value. (e.g. optimising the workforce so that customers are always well-served while avoiding unproductive capacity during low demand).

• Increasing quality of outputs. (e.g. a retail store’s customer service team multi-skilling their staff, resulting in better product knowledge and therefore better service to customers).

• Attracting and retaining high quality talent. (e.g. a professional service company allowing staff the choice of flexible hours which increased motivation, engagement and retention).

Other types of value include increasing productivity, driving innovation and minimising cost.

Value was found across different sectors, workplaces and company sizes.

OUR FINDINGS

Our in-depth research pilots covered a range of workplaces (e.g. manufacturing plant, call centres, grocery retail store, corporate head offices) and represented approximately 58% of industries including automobile, telecommunications, food retail, professional services, banks). Aside from large corporations, we also ran a workshop with SMEs, who make up 48% of the labour force, and are also able to gain value from agile working, although the opportunities and challenges differ (e.g. an ability to create tailored solutions that do not set large-scale precedents). Lastly, our work with HM Treasury demonstrated the value of current practices (in particular around flexible teams and work times) and identified further opportunities (e.g. better use of former employees). While identifying value is intrinsically harder in the public sector context, the workshop confirmed that the methodology is as valuable in that environment and that there is clear potential for more agile workforces across policy and public service delivery areas.

Most of the current practices could be extended – and more could be implemented – to capture further business benefit. Our research pilots suggested that more extensive or innovative agile working practices could generate further value of 3-7% of workforce cost and sales uplift of up to 11%.

For example,

• Eversheds, the legal firm, allowed employees the freedom to choose their own working model, and saw 28% of staff reporting increased productivity and 14% of staff seeing an increase in chargeable hours.

• A head office function of Lloyds Banking Group identified further opportunity to reduce premises costs by about 23% through multi-site practices.

Workforce agility can offer a competitive advantage for companies and for the UK economy.

For example, BT was able to insource call centre work and move it back from India to the UK because agile working practices enabled it to improve customer service at more competitive terms. This is expected to bring more than 500 jobs back to the UK and generate business benefits of ~£30m for the company over three years. Additionally, at Ford, the most recent engine bid from one of the engine plants made use of agile working arrangements to improve competitiveness against competing international plants.

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How could you take this forward?

The AFF members believe that there is a great opportunity for companies and employees to develop a more sophisticated approach to agile working. This has the potential to align the needs of employers and employees around a newly agile workforce which offers sustainable business performance and engaged employees. Every time we have applied our new approach we have identified potential areas to improve agile working and create economic benefits to our businesses. We would encourage executives to consider the potential value to them of creating a more agile workforce.

Questions for executives:

• Is there a business unit within your company which could serve customers better by having a more agile workforce? Or an asset that could be better utilised?

• Are there areas in your company where resource constraints are holding back performance?

• Are there agile practices you have been considering but have not been able to build a business case for?

1. The ‘sweet spot’: many practices can be configured to create value for employees and employers.

2. Pairing: when practices create value for one party but not the other, they can be offset (e.g. a shift pattern that combines one popular and one unpopular working slot).

3. Incentives: practices can be re-configured to include incentives that make them more valuable to the other party (e.g. paying premiums for less popular shifts).

4. Harder to reconcile: some practices may be hard to reconcile with value for the other party so may be included to reinforce the employee value-proposition or not be included as part of the package of agreed practices.

Diagram 3 - Develop the agile working model bottom-up to ensure it meets both employer and employee needs

Value for both

Value for employersValue for employees

OUR FINDINGS

How best to capture the value of agile working?

AFF members found that most implementation challenges were internal to the organisation and could be overcome. The most significant barriers were issues of culture or mindset – particularly at the more senior levels of companies – as well as systems or processes that are not yet configured to manage a more agile workforce. In some contexts, changing workforce arrangements would have to take particular account of industrial relations implications. SMEs face additional challenges around regulation and bureaucracy (e.g. when hiring new people).

We have identified five golden rules to successfully capture the value of an agile workforce:

1. Be business-led – don’t leave it all to HR. In-depth, joint working between operational and HR leaders can identify and configure portfolios of practices that suit business and employee needs. AFF pilot and seminar participants recognised the benefits of working closely together to create a new planning dialogue These dialogues can help the joint team understand the business’s operational needs – and identify creative ways to meet them using a more agile workforce.

2. Deeply understand the needs of the business and your workforce – and create a portfolio of practices that bridges the two. Begin with a clear definition of business objectives, a view of the “ideal workforce” and how workforce agility contributes to value. Understand what employees value and engage with them to develop agile practices. Different workforce segments often have different preferences. For example, at one of our pilots, an expectation that

financial incentives would encourage take-up of less attractive shifts proved to be incorrect: the young demographic valued time at home more than financial incentives offered. Truly understanding value to employer and employee allows the creation of a balanced portfolio of agile practices that will ensure sustainable success. [Refer to diagram 3].

3. Develop the agile working model bottom-up. The optimal agile working model depends on specific business requirements and workforce characteristics. When considering your agile business model, make sure you approach it at the right level – i.e. usually a single operation or business unit at a time, rather than across a whole company with different kinds of operations Where multiple operations are similar (e.g. branches) then the agile working model may be similar, though specific requirements will need to be understood.

4. Consider big, strategic changes. In some cases, small changes to agile working can have a big effect on the workplace – for example introducing a new shift pattern to meet increasing demand. In many cases, though, gaining the full benefits of a more agile workforce will require a larger change – a shift in planning philosophy, change in operating model or new employee value proposition. Being more ambitious can create bigger benefits – for example, applying home-working across a company rather than in just one division maximises benefits by freeing enough desks to enable relocation to a smaller premises. Sometimes, it is beneficial to change multiple working practices together, since some agility practices work best in combination. At one pilot, for example, implementing a portfolio of outsourcing, temps and

overtime effectively balances cost and risk by flexibly providing more cost-effective labour, with scope for additional overtime from the core workforce to cover high-skill, short-term needs. It is also important to avoid implementing a set of “agility practices” as a one-off change programme. As the needs of both business and employees evolve, so will the agile working “ideal”. Be ready to keep innovating around agility.

5. Prepare leadership first – and put in place sufficient management capacity. The attitudes of management are one of the barriers to agile working: getting senior business leaders on board is critical. Managing a more agile workforce can be more difficult – for example, in areas such as performance management and resource planning. It can be a real challenge to ensure managers have the requisite mindsets, capacity and skill – e.g. to manage a more dynamic resourcing model or assess outcomes instead of activity. More agile workforces often require more management time to drive the benefit; planning for and resourcing this is a crucial element of getting it right.

Implementing new agile working practices is not easy – and of course competes with many other priorities. Delivering the full value of a more agile workforce often involves changing mindsets, contracts, management roles and structures. But the benefits – more agile and competitive organisations delivering better performance and a more engaged workforce – make it a compelling proposition.

• Do you have a coherent, co-ordinated portfolio of agile working practices? Are you sure of the business value of your current agile working practices? Are business leaders involved in shaping agile working practices?

• Are there areas where lack of agile working means you are losing talent?

• If you are interested in learning more about agile working and the business value assessment approach, please visit our website www.agilefutureforum.co.uk

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Case studies 1. Addleshaw Goddard Aligning to client demand.

2. B&Q Attracting and retaining a diverse talent pool.

3. BP Increasing productivity using job sharing.

4. BT Minimising costs through agile working practices.

5. Bupa Using agility to better align with ‘short-notice’ demand.

6. Cisco Driving up innovation and reducing costs.

7. Citi Minimising costs.

8. Ernst & Young The cost benefits keep adding up.

9. Eversheds Increasing productivity through agility.

10. Ford Motor Company Ltd Driving up quality.

11. HM Treasury Aligning the workforce to unpredictable demand.

12. ITV Technology enabling agility.

13. John Lewis Partnership Better alignment to customer demand.

14. KPMG Aligning staff with demand.

15. Lloyds Banking Group Agility helps meet customer demand.

16. McKinsey & Company Recruiting and retaining high-quality consultants.

17. MTM Increasing productivity through great multi-skilling.

18. Norman Broadbent Retaining talent through agility.

19. Tesco Meeting customer demand through agility.

CASE STUDIES

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B&Q: Attracting and retaining a diverse talent pool.

Addleshaw Goddard: Aligning to client demand.

Addleshaw Goddard’s analysis of its business hours highlighted the need for a more agile document production resource. The word processing team, as it is now structured, offers a flexible resource that delivers an effective service to their UK and international offices. To achieve this they invested further in their in-house capability through the creation of a centre of excellence in Manchester, with some localised support in Leeds and London. In addition, 30% of the team were moved permanently to home working.

Team members use a number of agile practices, including part time working, split shifts and optional overtime from home to ensure the correct level of resource can be directed to the days and times when business demand is at its highest. This approach also enables the team to provide a seamless service across the globe and different time zones.

Both clients and employees have benefited from the flexible design and set up of the team with an increase of 15-20% in productivity and a 50% reduction in absenteeism for home workers. Levels of engagement and motivation have increased and home workers can be sourced from across the UK, thereby increasing the size of the available resource pool. Moving office-based employees to working from home has also meant a reduction in overheads.

To support a disperse team, the firm has upskilled its managers in remote management techniques and found ways to involve and engage home workers, preventing a sense of isolation amongst colleagues working remotely.

B&Q has a longstanding reputation as an early adopter of workforce agility measures and is continuing to trial new initiatives. Its oldest worker today is 90, while its youngest worker is 16.

Its decision to target recruitment of older workers was made in the late 1980s at a time of low unemployment and rapid expansion for the business. This demographic was seen as representing a good commercial fit with the business in that older staff were more likely to be homeowners with experience of DIY, more likely to reflect B&Q’s customer base, more likely to understand how to provide good customer service, and more likely to be able to work non-traditional hours.

A trial of this policy lead to the opening of a store in Macclesfield that was completely staffed by workers over the age of 50. Contrary to prejudices about the policy, the store received a huge response when advertising the vacancies, and the additional time it had put aside for training older staff – on the old dog, new tricks principle – proved unnecessary. The store subsequently produced profits that were 18 per cent higher than other stores in the chain, saw staff turnover that was six times lower, and enjoyed absenteeism rates 39 per cent down on the average B&Q outlet.

B&Q’s balanced workforce policies now see it offer flexible working arrangements as standard, on the principle that staff will always be deployed so as to provide customer service where and when customers expect it.

In a recent initiative, the retailer consulted 20,000 employees on plans to change rotas so as to ensure greater staff availability at weekends, when B&Q stores are at their busiest. It conducted a national change programme that included the business case for the new policy, and support and training for managers asked to hold discussions with staff. The retailer has increased its weekend coverage by 16.4 per cent and seen weekend sales participation rise 1.5 per cent to 33.9 per cent over the last year alone. Weekend hours participation is up 3.5 per cent to 28.7 per cent.

Today’s market is constantly evolving, and having a more nimble, agile business helps us to better align with our clients, whilst empowering and motivating our employees to work more flexibly - improving service delivery, productivity, efficiency and employee engagement. We believe agile working is good for business, and we are proud to be a part of the Agile Future Forum. Through collaboration we hope to make a real impact, and we would encourage other organisations to get involved and explore the business benefits agile working can deliver.

Monica Burch - Senior Partner, Addleshaw Goddard.

At B&Q we do more than sell products. We help people to improve their homes, which in turn, improves their lives. That’s why our core purpose now is Better Homes, Better Lives. Our long and well known legacy of removing our retirement age over 20 years ago, along with our inclusive approach to agile working, helps us achieve this.

Martyn Phillips - CEO, B&Q.

CASE STUDIES

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BT: Minimising costs through agile working practices.

BP: Increasing productivity using job sharing.

Unlike a traditional part-time role, a job share arrangement is able to provide complete access to skills and total coverage for the working week. BP has been able to make this practice work particularly well in customer facing roles and roles where there is line management responsibility and travel requirements.

In this arrangement, BP and the customer have access to the skills, knowledge and experience of two individuals who, by working together, can contribute more than a single individual would. Job sharers pool their talents and knowledge and often provide better solutions to problems than a single person working alone.

BP has also found that with effective management, job shares can provide the business with greater flexibility. If one of the individuals is on leave, there is always some continuity of cover from the other person. If one individual moves to another role, there is continuity in the role while a second person is recruited and comes up to speed – unlike in conventional roles where often initiatives stagnate during the time it takes to recruit and hand over to a new incumbent.

BP has seen productivity gains and savings in recruitment and training costs which can amount to 30% of the FTE (full time equivalent) costs, for the roles involved in job sharing; all this in addition to the retention of talent within the business.

Key measurable benefits relate to cost reduction which has been driven by productivity increase. The cost reduction is estimated at around 0.4 FTE or 20-25%, and the balance is attributable to recruitment cost avoidance. In addition to this, job-sharing enabled BP to retain engaged employees, which makes this a win-win combination, and keeps the recruitment and training costs down and employee engagement levels up. As BP makes more use of job sharing across the business this will drive further significant savings.

BT has promoted agile working practices through extensive use of communications technology –50,000 employees have remote access to its internal systems, and tele-conferencing and video-conferencing facilities are widely used – with tangible benefits for the business including minimised costs and improved recruitment and retention.

An independent study of 10,000 BT staff conducted by the University of Bradford calculated that over the year to March 2012, the company eliminated 1.04 million face-to-face meetings using technology, with an average travel saving of 197 miles. Over the same period, BT staff made 5.2 million conference calls, 45 per cent more than when a similar study was conducted in 2008.

The company has cut its physical accommodation needs by 48 per cent, yielding global savings of £100m a year. The Smart 2020 study estimated that the annual net saving per home-based employee at 1.4 tonnes of CO2e.

Workplace agility has also boosted BT’s staff retention – the company’s ‘Family and You’ portal provides advice on agile working options for staff and formal requests for agile working are comparatively unusual, because arrangements are generally made informally at an early stage with managers.

These practices contribute to our extremely high return to work rate for staff on maternity leave producing tangible cost savings in recruitment and training. The company also works hard to retain older staff, offering a range of flexible retirement options including moves to part-time work or roles with less responsibility.

Agile working has become increasingly important in attracting top talent. We believe it leads to increased employee satisfaction, engagement and retention and that it contributes to higher levels of performance and productivity.

Peter Mather - Group Regional Vice President, BP, Europe & Head of Country, UK.

We at BT fully support initiatives to spread the word about the advantages that can accrue when you take an open-minded view over where, when and how your people deliver their best work. It’s important for business to be mindful of the environment and seek to ensure sustainability in all its efforts. Agile work patterns can play an important role here, often helping to reduce travel and other costs associated with maintaining a large estate.

Gavin Patterson - CEO, BT.

CASE STUDIES

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Cisco: Driving up innovation and reducing costs.

Bupa: Using agility to better align with ‘short-notice’ demand.

Common to all hospitals, Bupa’s Cromwell Hospital has an on-going need to align the number of staff with daily clinical requirements. Patient numbers can fluctuate and staff absences, through training attendance, annual leave or illness, have to be covered. Bupa’s constant challenge is to meet staffing needs at peak periods in the most effective and cost efficient way.

Until four years ago, Bupa’s Cromwell Hospital relied solely on agency staff to meet demand at short notice to match daily clinical requirements. Agency staff are expensive and not the most effective way of covering staff shortages for various reasons - they are not familiar with the specific ways in which the hospital operates, and it is not possible to fully orientate them due to the time available, which can impact quality of service for patients and frustration for permanent staff.

To address these issues the hospital set up a “Bank” - a pool of specially selected clinical personnel who work regularly at the hospital and could be called on as required. Some are ex-permanent employees who want to work fewer or less regular hours; others are attracted by the flexibility offered. They are all experienced, trained by the hospital, and familiar with its systems, culture and people.

The initiative has proved to be a winner for the hospital, its patients and staff. The percentage of revenue spent on agency staff has decreased by 25% over the past four years while patient satisfaction has increased as a result of the bank staff’s greater knowledge and familiarity with the hospital. . The hospital’s permanent staff benefit from being supported by efficient and effective bank staff and some bank employees also bring knowledge gained in specialist teaching hospitals. For bank staff, flexible working enables them to retain their skills and a close connection with the hospital, while accommodating other personal circumstances.

The changing needs of Cisco’s workforce – younger, ‘Generation Y’ staff members in particular, but older colleagues too – has led the company to redesign its workspace and introduce new tools for mobility. But while this process reflected employee needs, it also recognised potential business benefits such as lower real estate costs and greater innovation.

In Cisco offices worldwide, many employees do not have an assigned workspace/ As the nature of their work means they are not in the same place all day, every day, each time they go to a Cisco office, these employees can choose an available workspace to meet their needs. This might be an individual desk in a quiet area, a lounge area with sofas and chairs for a spontaneous team meeting, a formal, enclosed meeting room, or a standing countertop for quick checks on email or a phone call.

The flexible and open office environment, called the Cisco® Connected Workplace, was initially adopted in most Cisco sales offices around the world and is now the standard office design inside the company.

Although the new space design meets employee needs while they’re working in a Cisco office, they may work just as often at home, a customer site, or a coffee shop. Work and personal activities are often intermingled across the span of day and night, combining personal preference and the communications needs of a global company.

Several Cisco technologies and product solutions support this flexibility, starting with wireless access to the corporate network at all company sites. Alternatives to a dedicated desk phone, such as the Extension Mobility feature, laptop-based softphones, and mobile devices with Single Number Reach, enable voice calls anywhere. Secure VPN technology allows employees to connect to work from anywhere they can get Internet access. Collaboration tools such as Cisco TelePresence and desktop video increase the number of ways people can meet and share information, regardless of location.

As more people can be assigned to a given space, the office redesign allows for substantial savings in both initial capital expenses and ongoing operational costs. Working flexibly is also a powerful tool for business continuity during a building closure, a pandemic, or natural disaster. And it has made for a more globalised business, with a flexible work style, teleworking, video, and collaboration tools all helping to build effective global teams.

I strongly believe more agile working practice will help us to move from being a successful organisation to one that delivers extraordinary business performance. We have already seen that we can better meet customer demand and improve service and satisfaction levels while reducing costs and giving employees more flexibility. The pace of change in society today means all businesses need to swiftly innovative, adapt and respond to meet shifting customer needs. I believe agile working will be a part of the solution in meeting this challenge.

Stuart Fletcher - CEO, Bupa,

Cisco is all about connecting the unconnected. Traditional lines between work and life are blending faster than ever before. Leading companies can benefit from technology to help people work their way. Talented people choose to join, stay with and grow at companies that recognise their need to blend work and life. The Agile Future Forum is perfectly timed to shape our future working lives.

Phil Smith - CEO, Cisco UK & Ireland.

CASE STUDIES

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Ernst & Young: The cost benefits keep adding up.

Citi: Minimising costs.

Ernst & Young has offered long-standing support to both informal and formal working arrangements, but is now seeking to make such practices ‘business as usual’ rather than the exception. “Flexibility isn’t about working less or working more, but about having greater control over how to get your work done more effectively,” says Robin Tye, chief operating officer, UK & Ireland.

Ernst & Young therefore developed a change management programme to better enable flexible working. A central team of change managers supported by the firm’s leadership team and partners have led the roll-out of a change management programme across the UK business, in order to make flexible working a reality for each team in the firm.

This work is supported by workforce training which identifies the desired behaviours required to be an effective flexible worker and to manage flexible teams. It is also set to become an integral part of the firm’s resourcing, recruitment, induction and counsellor training.

Ernst & Young has introduced a number of tools to support this programme, ranging from a new flexible working policy, to training, a dedicated intranet site with information on how to make it real and an HR helpline. The firm has also adapted its workspaces and invested in new technology to support remote working, including new video conferencing facilities and global messaging and collaboration tools.

Already, flexible working has reduced the amount of time that UK staff spend travelling, reducing costs by £0.5m in the current financial year, which has also reducing the business’s carbon footprint. Ernst & Young has also avoided real estate costs of £3.6m by offsetting anticipated headcount growth against reduced demand for desks.

Citi has had agile working policies in place for more than a decade, boosting employee-centric measures of inclusiveness, talent retention and engagement, but its most recent initiative has resulted in tangible reductions in its real estate costs for the business.

Citi’s Alternative Workplace Strategies (AWS) programme aims to transform the way the company uses its office space. As well as offering cost savings, the scheme aims to align the company’s workplace environment more closely with management objectives and employee expectations.

AWS has already been fully adopted by one department. In addition, 13 further reviews have been conducted in 11 countries, and eight projects are currently planned for the UK, Ireland, Russia, Poland, Germany and Hungary.

The process begins with an assessment of the space requirements of staff members in the department, using interviews and other data collection processes. Staff are categorised into four groups:

• Resident team – those who collaborate closely with immediate colleagues in their primary office;

• Resident independent – those who have site-specific requirements and generally perform independent work;

• Agile – those who are both highly collaborative and highly mobile;

• Telecommuters – those who are not dependent on their location to do their work.

The number of desks needed in the department can then be calculated on the basis of how many people fit into each group. For the two resident categories, Citi assumes an 80 per cent desk-to-person ratio (allowing for sickness, holidays, training and so on), falling to 60 per cent in the agile group, and 20 per cent for telecommuters.

Citi works on the basis that teams will still need a “home space” dedicated to their department, to facilitate collaboration. It also seeks to provide a variety of different types of space, as well as plenty of space for meetings.

The business has found that the factors required to make the AWS initiative work include leadership support, enabling technology an obvious payback for staff – a higher-quality working environment, for example.

Its results are impressive – a 20 per cent reduction in real estate costs and implementation costs recouped within eight to 18 months.

We have used flexible approaches to work for many years. We have found that it enables a higher level of client service, makes our people happier and saves money. We also see more opportunity to expand from where we are to make flexible working truly ‘business as usual’, ensuring that our firm is as agile and adaptive as possible, something that is simply essential in the ever changing, fast paced and increasingly global business landscape of today.

Steve Varley - UK Chairman and Managing Partner, Ernst & Young, UK & Ireland.

Agile working practices enable Citi to better serve clients with innovation and execution whilst creating a better work environment for our employees.

Jim Cowles - CEO, Citi EMEA.

CASE STUDIES

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Ford Motor Company Ltd: Driving up quality.

Eversheds: Increasing productivity through agility.

Ford launched its Digital Worker programme in 2009 as a response to the changing needs of its business. Digital Worker comprises a package of innovative and emerging tools that aim to help staff work more flexibly, but also to integrate a more global, mobile workforce. The tools increase personal and team productivity, improve connections between employees, simplify the workplace experience and make it easier to find key information. The overall result has been to substantially improve the capability of staff.

Digital Worker consists of easy-to-use IT office productivity and communication tools, and appropriate learning and support resources. There are 38 tools, more than 500 ‘tips and tricks’, over 250 FAQs and multiple ‘How iWork’ scenarios. There are also Digital Worker live events so employees can see current training content, practise using the tools and put questions to subject matter experts.

Examples of these tools include WebEx, which allows colleagues in alternate locations to share their desktops, and podcasts that enable meetings to be broadcast globally. Instant messaging enables colleagues to see share their online status and chat instantly, while virtual private networks enable employees to access Ford’s internal network from multiple locations.

Ford has identified business benefits from the Digital Worker programme as including improved productivity, efficiency and employee satisfaction. Employees say it is now easier to ‘overcome workplace obstacles’ and 69 per cent of users say Digital Worker tools make it easier to connect with others globally, with the added benefit of reduced operating costs.

57 per cent of users say Digital Worker tools help meet their business needs and the culture has moved from a traditional cost/benefit approach to an ethos of “as much as possible” to maximise effectiveness.

Eversheds launched an “informal flexible working” pilot scheme in its Cambridge office at the end of 2010. Although it already had a formal policy offering employees flexible working arrangements, it wanted to try an approach that was more ad hoc, allowing employees to try out different types of flexible working to suit their personal circumstances, as long as there was no adverse impact on their work, or on clients or colleagues.

Crucially, the senior office partner in Eversheds’ Cambridge office agreed to sponsor the pilot and he worked with human resources to get support from other partners. The next stage was to call all staff into a meeting at which the senior partner explained the context and purpose of the four-week pilot scheme and asked staff to use their common sense – he wanted as many of them to participate as possible while ensuring that doing so had no detrimental effect.

The pilot eventually ran for eight weeks and received very favourable feedback from staff. Very significantly, the scheme also resulted in a measurable increase in productivity in the Cambridge office. Some 28 per cent of respondents to a subsequent staff survey felt the scheme had increased their productivity, with 14 per cent reporting an increase in their chargeable hours.

The figures reflect the fact this was a short pilot in which around 40 per cent of staff worked flexibly only once every fortnight. Further productivity improvements were expected as a result of a more sustained regular flexible working approach.

In fact, utilisation figures for the Cambridge office moved from 88 per cent in January 2011 to 92 per cent in February and 97 per cent in March, which was the highest increase in utilisation of all UK offices between January and March, and up 5 per cent on March 2010. Informal flexible working has since been embedded as a common working practice in the Cambridge office.

For more than ten years, Ford Motor Company Ltd has provided its UK employees with access to flexible working arrangements. It has enabled our employees to better balance their work and home lives and helped them to work effectively in a global business across different continents and time zones. The current economic climate has emphasised the importance of these agile working practices and demonstrated that they can offer organisations a competitive advantage. The workplace agility practices in place in Ford Motor Company Ltd of Britain are creating tangible value for the company.

Mark Ovenden - Chairman, Ford Motor Company Ltd.

We are constantly looking for new ways of enhancing the service we deliver to the business and our clients whilst making Eversheds a flexible and inclusive place to work where all employees have the opportunity to flourish. Flexible working is just one of the steps towards achieving our vision. It is about client service excellence and working smarter, exactly what our people and clients would expect from a progressive law firm like Eversheds.

John Heaps - Chairman, Eversheds LLP.

CASE STUDIES

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ITV: Technology enabling agility.

HM Treasury: Aligning the workforce to unpredictable demand.

In 2010, ITV announced that it was to embark on a five-year Transformation Plan with the key objective to create world class content which can be made famous on its channels, before being exploited across multiple platforms in the UK and internationally. This vision led the company to redesign its technology infrastructure in order to promote agility across its business practices and workforce; ensuring employees had the key tools and systems in place in order to deliver the Transformation Plan and meet customers’ needs.

A key area of success has been the company-wide Workplace Refresh project, encouraging flexible and mobile methods of working for all staff. As part of the refresh, ITV has adopted leading technologies from Apple and Google to facilitate a cloud-based system. This involved replacing desktop PCs with laptops and tablets, as well as deploying Google Apps and Google Mail, a web-based communication and collaboration product designed to enable employees to work together regardless of their physical location.

This approach has brought a number of benefits to the company ensuring that ITV is well placed to serve customers’ changing needs. These benefits include increased flexibility for our staff, enabling them to communicate and collaborate better with others, and be even more creative than before. The technology refresh project has also been a key contributor to improving cost efficiencies within IT support, accommodation and domestic travel, as well as increased data storage and faster decision making across the business.

The overhaul in ITV’s workplace technology has mobilised 70% of the workforce. This has led to a larger number of staff taking up informal and formal flexible working arrangements, now at 25% of employees. It is also contributing to a marked change in the company’s culture, leading to an improvement in ITV’s employee engagement index, now at 88% for 2012. A further vital benefit of ITV’s focus on agile workflows is that it enables the company to concentrate on what it does best - delivering more great content to consumers.

The media environment in which ITV operates is constantly evolving and we must ensure that we adapt to meet that challenge. It is essential that we have a flexible workforce that can respond to consumers’ changing needs, and over the last year, ITV has invested in a company-wide technology renewal project to ensure all employees have the tools to achieve our goals.

Adam Crozier - Chief Executive, ITV.

The Treasury has been innovative in its approach to agile working over the past few years, both in response to the financial crisis and more recently in embedding new practices in business and contingency planning. Our ability to respond quickly to the events in Cyprus was a good example of the new techniques in action.

Sir Nicholas Macpherson - Permanent Secretary, HM Treasury.

CASE STUDIES

The Treasury has committed to reducing its size by around 25 per cent during the Spending Review period that runs from 2011-12 to 2014-15: it sees agile working as a key enabler for delivering those savings without compromising the quality of services provided to ministers.

All of the Treasury’s 1,100 staff are incorporated in the department’s agile working strategy, with three distinct but related practices running alongside one another.

First, the department operates flexible working within groups. The Treasury is divided into business units of 50-80 people lead by directors and deputy directors who must find flexible solutions to new pressures as they emerge. Teams within each unit are able to draw upon each other as needed – and units are also able to lean on each other if required. Resources may be reallocated for days, weeks or even months at a time, with no formal sign-off required from a central authority. This approach is supported by the highly collaborative and collegiate culture.

Second, the Treasury operates a strategic projects pool, employing around 2 per cent of the workforce. Staff are allocated to core strategic priorities, working on one project at a time with the relevant policy group. Projects typically last for three to six months and staff spend between one-and-a-half and two-and-a-half years in the pool. The Treasury is thus able to respond quickly to new challenges while continuing to focus on strategic challenges.

The third practice is a crisis contingency pool that includes up to 40 staff. These employees, who have had experience of financial stability issues since the financial crisis of 2008, are generally engaged in other Treasury work but can be called up quickly if a crisis emerges. The Cypriot banking crisis was the most recent example – by calling up contingency staff and combining them with staff moved from the financial stability group, the Treasury was able to more than triple the number of people it had working on the crisis.

These agile working practices reflect the broad mix of work the department must deliver – regular delivery projects such as Budgets, new demands for project work and the need to respond to unforeseen pressures. The approach will enable the Treasury to continue to meet these challenges despite operating with fewer resources.

In addition to the Spending Review savings [and ensuring the highest-quality policy advice to ministers on priority topics], the Treasury’s agile working practices have also promoted staff development and boosted morale: its most recent staff engagement index score was 66 per cent, above the civil service average.

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KPMG: Aligning staff with demand.

John Lewis Partnership: Better alignment to customer demand.

KPMG has used workplace agility practices to ensure it has the right number of staff available to service client demand. In January 2009, at the height of the recession, KPMG introduced an innovative flexible working programme to help minimise the risk of future redundancies.

The scheme, ‘Flexible Futures’, offered every member of the firm in the UK - partner and employee alike – the opportunity to volunteer to reduce their working hours on a temporary basis, should the business need them to do so. There were two options: reducing the working week by one day, or taking extended time off at 30 per cent salary, or both. The maximum loss of salary was capped at 20 per cent of annual base salary.

More than 85 per cent of partners and employees volunteered to reduce their working hours under Flexible Futures. Over the following 11 months, 2200 people were asked to exercise their options. This represented a range of flexible working, from one or two days off during a quiet period, to several weeks over the summer months.

KPMG in the UK saved approximately £4.7 million as a result of the initiative, while employees were able to exercise greater control over their own destiny, reducing stress levels associated with uncertainty.

This success partly reflects that fact that KPMG’s default option is to offer staff a very wide range of flexible working practices. Its policy is not to ask employees why they are making requests for flexible working and 98 per cent of requests are accepted.

Measured on a formal basis, 10 per cent of KPMG’s female employees currently have a flexible working arrangement; the figure is 6 per cent for men. Informal flexible working is much more widespread: in KPMG’s advisory practice, for example, around 60 per cent of staff work flexibly – four-fifths of these employees do so informally.

Agile working can help lead Britain back to growth. It’s good for individuals, and it’s also good for business. We have firsthand experience of this in times of growth and in more difficult times, and we’re looking continuously for ways of becoming more agile and more flexible to provide better client service, and better careers. I hope this initiative will help create new moulds for modern working.

Simon Collins - UK Chairman & Senior Partner, KPMG.

The world of work is changing dramatically. Businesses need to be agile and responsive to new demands from consumers and that requires flexibility within the workforce. We need Partners to contribute their discretionary effort through roles that are meaningful and rewarding for them, and productive and innovative for the Partnership.

Sir Charlie Mayfield - Chairman, John Lewis Partnership.

CASE STUDIES

The John Lewis Partnership’s two trading divisions, John Lewis and Waitrose took an agile approach in adapting existing store development and operating procedures, to collaborate when opening two new shops side by side for the first time in Ipswich one year ahead of schedule in November 2012. The award winning approach to the project leveraged cross-divisional and directorate best practice, and created innovations which are now being incorporated into future developments. The overall construction budget was reduced by 8.4% giving a total saving of £1,022m.

Both customers and Partners have benefited from the two brands being together under one roof. There is a shared main entrance, customer cafe and complimentary product assortments, supported by shared utilities and facilities behind the scenes resulting in greater sustainability efficiencies and larger selling spaces for both stores. The collaborative staffing model has enabled the stores to reallocate hours to customer-facing Partners. A combined goods receiving area has resulted in operating efficiencies for receiving goods and stock management, and cross-divisional working has optimised the selection of food and non-food products across both stores – all resulting in an enhanced customer experience.

There are also shared learning and development opportunities across both divisions and the opportunity to match resource to divisional peaks around key trading periods, eg John Lewis Clearance and seasonal uplifts in Waitrose. A shared Partner dining room and training facilities leads to greater opportunities to work together, and joint leadership meetings and shared duty management encourages best practice across both stores.

It’s still early days for the stores which opened in November 2012, but initial feedback from both customers and Partners is extremely encouraging.

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McKinsey & Company: Recruiting and retaining high-quality consultants.

Lloyds Banking Group: Agility helps meet customer demand.

McKinsey launched ‘Take Time’ in Spring 2012. The scheme offers all non-partner consultants the opportunity to take four extra weeks off each year to pursue personal interests, in return for a lower salary spread across the year. The scheme was a response to feedback from staff that they wanted improvements in their work/life balance.

The programme enables McKinsey to match more effectively its workforce with client demands – the firm’s consultants work on a project-by-project basis. The programme allows for longer breaks between assignments.

Take Time is already proving its worth as a recruitment tool, helping McKinsey offer good, attractive employment practices for women. A third of the participants in the programme are women, a key target group for the company to attract and retain. The scheme is also boosting retention in other ways, with staff using the opportunity to make an impact outside of work – on social schemes, for example – or simply to spend more time with family.

Some staff use the scheme to pursue external interests that are of benefit to their professional growth. One staff member spent her leave period visiting three Fashion Weeks around the world before returning to work on an assignment with a European clothing company.

Senior leaders in McKinsey gave this initiative their full backing, knowing that client service would not be compromised. Staff must take 50 per cent of their additional four weeks of leave during periods of lower client demand, typically during the summer and at Christmas. This reduces surplus capacity during these less busy times.

Around 15 per cent of the consulting body at McKinsey has so far enrolled in Take Time with the company reducing compensation costs by around 10 per cent for each employee involved. No capacity constraints have yet been encountered. The company expects to be able to measure the impact on attraction and retention but says this will require several years of tracking to generate meaningful data.

Our flexible working initiative ‘Take Time’ has proved very popular. It is an excellent way to allow colleagues to spend more time on external passions and interests, whilst still ensuring we can meet the needs of our clients. It helps us recruit and retain talented people and, by better matching capacity with client demand, delivers an operational benefit.

Vivian Hunt - Director and Managing Partner, McKinsey & Company, UK and Ireland.

Workplace agility is a key business tool enabling us to operate in a way that meets the needs of our customers, shareholders and colleagues.

Sir Win Bischoff - Chairman, Lloyds Banking Group.

CASE STUDIES

The banking industry has been revolutionised over the last 10 years by technology and increased competition. Our goal at Lloyds Banking Group is to be the best place to bank for our customers and we can only achieve that goal if we focus on meeting our customers’ needs. Increasingly customers want a 24 hour service and to access their money easily and at a time that is convenient – to them rather than to us. As part of our Banking Made Easy programme, we now offer a range of services from digital and mobile banking to 24 hour, seven days a week telephone banking. Many customers, of course, still want to be able to visit a branch. 60% of Lloyds TSB branches now open on a Saturday and 38% open late on Thursdays.

Customer feedback has been extremely positive and we have already seen a 3% increase in income/revenue even though the initiative is still in its first year of implementation. That means that we are no longer a traditional 9 – 5, five days a week business... We have had to introduce more agile working patterns. The greatest strength of workplace agility is the benefit it delivers to both business and employees alike. When exploring the extension of opening hours across the Lloyds TSB retail branch networks, 86% of colleagues said they would be willing to be flexible with their working patterns to help meet our customer’s needs.

We are also reviewing how and where our colleagues work outside the branch network. Our employees have traditionally worked in offices and we have major sites across the UK. Our offices are an expensive resource, and a review demonstrated that on average, we were only making use of between 60 – 80% of our available office space at any one time.

Colleagues were also spending increasing amounts of time travelling between offices, putting pressure on their ability to balance home and work, whilst substantially increasing our costs.

In response to these challenges, we developed two programmes, which are designed to drive efficiencies whilst enabling more staff to work flexibly, as and when it suits both parties. The first, WORKwise, aims to build on how we use our premises and to support colleagues to work differently in offices, on the move and at home. Thanks to flexible working practices and virtual technology we now use five desks for every six colleagues in 20% of our office estate. Lloyds has so far rolled out WORKwise to 18,000 members of staff, generating multi-million pound costs savings for the bank, and allowing it to greatly improve its environmental footprint. The scheme is continuing with a project to reduce the desk demand in London by around 1000 desks over the next two years which will achieve a further £10m annual saving.

The second programme, No Travel Week, aims to reduce colleagues’ travel. During one week in every month, colleagues are encouraged NOT to travel unless it is business-critical. Since 2011 the bank has reduced business journeys by 96,000. The policy has also changed the bank’s business travel culture with a cost reduction of 39% in Travel & Entertainment spend since the end of 2010. It now promotes viable technology alternatives that allow colleagues to work more agilely – the environmental dividend has been a reduction in C02 emissions of more than 25 per cent.

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Norman Broadbent: Retaining talent through agility.

MTM Products (I.S.P.P.) Limited: Increasing productivity through great multi-skilling.

Norman Broadbent, an executive search firm with around 50 members of staff in its London office, has adopted an overall policy to consider agile working practices at either the company’s or the employee’s request. Around 30 per cent of employees have some element of agility built into their contracts, with a range of business benefits realised.

Examples include one of the firm’s board practice researchers, who was looking for part-time work. The business suggested an extended break over the summer months on the basis that board activity is often very quiet in July and August with a majority of non-executive directors taking holidays during this period. The deal suited both sides: the business did not need to pay to employ a member of staff during a period when their services weren’t required and the staff member was able to be at home with school-age children over the summer.

Similarly, one of the firm’s associates plays lacrosse for the national team and was keen to attend early morning training sessions on certain weekdays. Her work hours were changed to 10.30am to 7pm. This enabled the firm to retain and support high-quality talent but also increased productivity. The individual found that access to candidates able to talk freely was much greater between 5.30pm and 7pm.

Similarly, a group services director holds an executive role on the PLC board and is contracted for 10 days a month of work, arranged flexibly between the parties. The company benefits from retaining a high-quality director who has other skills and direct commercial experience. And this working practice allows the individual to serve on the Employment Tribunal, developing further additional talents.

Norman Broadbent’s chairman of the board practice, meanwhile, has moved to a four- day-week having passed the age of 70, enabling the firm to retain this senior level of talent and experience. The arrangement suits the individual and has also generated a fixed salary cost saving for the company.

The alignment of customer demand, cost control and employee engagement was the foundation for our business case to become agile in the way that we employ our team.

Sue O’Brien - CEO, Norman Broadbent.

The ability to respond to the ever changing challenges and opportunities in today’s world is key to businesses of all sizes. Having a well-motivated and agile workforce has proved a major enabler in this regardat MTM.

Ian Greenaway - Managing Director, MTM Products (I.S.P.P.) Ltd. .

CASE STUDIES

The story of MTM Products, a Chesterfield-based manufacturer with 46 staff, proves that workplace agility pays dividends at smaller organisations too. The business operates with a multi-skilling strategy that requires each manufacturing process to have at least three people with the skills to run it.

The business is thus able to respond to peaks and troughs in demand for different product lines by redeploying staff to where they are needed most. The practice reduces unproductive time, as under-utilised employees can be moved immediately to busier lines, and reduces the need for overtime in areas experiencing very high levels of demand. Staff enjoy greater development opportunities and it is easier for the business to offer flexible hours on an individual basis.

MTM’s approach requires management leadership so that staff “buy in” to these disciplines, as well as an investment in training. The company has sought to instil a culture of give-and-take which brings together employee and employer benefits: all requests to changes in individual employees’ working patterns must be agreed first with colleagues and be shown to have no adverse effect on the company. Employees tend to come up with innovative solutions and teams work well together with fewer frictions.

The benefits of MTM’s multi-skilling programmes are difficult to quantify precisely, but the company’s employee turnover rate is just 5 per cent. Sickness absenteeism averages only two days a year, customer retention is running at 98 per cent and MTM benefits from high levels of employee referrals when it is filling vacancies. It has reduced its overtime bill by the equivalent of 2 per cent of labour costs and has brought overheads down by 15 per cent, and has also identified productivity and sales benefits.

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ACKNOWLEDGEMENTS

Agile Future Forum Leadership Team:

Sir Win Bischoff - Lloyds Banking Group, Chairman (Chair).

Monica Burch - Addleshaw Goddard, Senior Partner

Martyn Phillips - B&Q, Chief Executive

Peter Mather - BP, Group Regional Vice President, Europe & Head of Country, UK

Sir Alan Parker - Brunswick Group, Chairman

Gavin Patterson - BT, Chief Executive

Stuart Fletcher - Bupa, Chief Executive

Phil Smith - Cisco, CEO UK & Ireland

Mike Corbat - Citigroup, CEO

Steve Varley - Ernst & Young, UK & Ireland UK Chairman and Managing Partner

John Heaps - Eversheds, Chairman

Mark Ovenden - Ford Motor Company Ltd, Chairman

Sir Nicholas Macpherson - HM Treasury, Permanent Secretary

Adam Crozier - ITV, Chief Executive

Sir Charlie Mayfield - John Lewis Partnership, Chairman

Simon Collins - KPMG, UK Chairman & Senior Partner

Vivian Hunt - McKinsey and Company, Director and Managing Partner, UK and Ireland

Ruby McGregor-Smith CBE - MITIE, Chief Executive Officer

Ian Greenaway - MTM Products (I.S.S.P.) Ltd, Managing Director

Sue O’Brien - Norman Broadbent, Chief Executive Officer, UK

Dominic Casserley - Willis Group, Chief Executive

Agile Future Forum Working Group:

Fiona Cannon OBE - Lloyds Banking Group, Group Director, Diversity and Inclusion (Chair)

Alison Cottrell - HM Treasury, Director, Financial Services & Director, Corporate Services

Jane Wilson & Mary Gallagher - Addleshaw Goddard, Head of Talent, Addleshaw Goddard, Diversity and Talent Manager

Fraser Longden - B&Q, Marketing Director

Tit Erker - BP, D&I Director

Sarah West - Brunswick Group, Partner

Paul Litchfield - BT, Chief Medical Officer

Amanda Owen - Bupa, Director, Health & Safety, Employee Wellbeing & Diversity

Tony Brook - CISCO, Client Executive

Carolanne Minashi - Citigroup, Managing Director, Diversity, Talent & Employee Relations

Ernst and Young

Angus McGregor - Eversheds, HR Director

Ford Motor Company Ltd

David Osborn - ITV, HR Director

John Lewis Partnership

Michelle Quest - KPMG, Partner, UK Head of People

Helen Mullings - McKinsey and Company, Director of Professional Development

Karen Govier - MITIE, Equality & Diversity Manager

Ian Greenaway - MTM Products (I.S.S.P.) Ltd, Managing Director

Krystyna Nowak - Norman Broadbent, Managing Director, Board Practice

Judith Nelson - Tesco, UK Personal Director

Ian Cutler - Willis Group, HR Director

Tesco: Meeting customer demand through agility.

Tesco employs over 240,000 colleagues in its UK stores, and nearly 80% of them are on fixed-hours contracts. In 2011, the retailer set out to ensure that those contracted hours were as productive as possible. Tesco began piloting its Ideal Schedules Change programme in 44 stores at the beginning of 2012 with a package of tools and support that enabled it to compare the ideal level of staffing for each store with the actual hours its colleagues were scheduled to work.

The results gave it a clear picture for every hour of every day in every department, showing where it had too many, too few, or the right number of hours contracted. This data was crucial in enabling it to work towards aligning customer demand and labour supply.

Based on the initial findings, store managers began briefing colleagues on the need to review when and where they were working. A team of trained line managers held individual talks with all colleagues affected to discuss their availability and preferences, particularly for hours and departments beyond their existing contracts.

Thanks to all the companies involved in the Agile Future Forum, who have generously and voluntarily given their time to support the development of the initiative. The Forum is managed by two boards – the Chief Executive Leadership team, chaired by Sir Win Bischoff, Lloyds Banking Group and the Working Group, chaired by Fiona Cannon, Lloyds Banking Group.

Particular thanks are due to following companies and individuals without whose practical or pro bono support, we would not have been able to deliver the Agile Future Forum: Carl Brook, good4Businesses; Toby Gibbs (Partner) and his team McKinsey and Company; Sarah West and Eve Hibbert-Keene, Brunswick; Tony Brook, Cisco; Carolanne Minashi, Citi; Michelle Quest, KPMG; Neil Mohring, Eversheds; Nicky Elford, Emma Lawrence, Jacquie MacKenzie, Judith Langley and Matt Smith, Lloyds Banking Group; Judith Nelson, Tesco.

Acknowledgements

By the end of 2012, the process had been adjusted and extended to a further 74 stores – over the year, Tesco held individual discussions with 28,571 colleagues, with 95 per cent those invited to change their hours doing so voluntarily. The programme is now being rolled out across the remainder of Tesco’s 789 Extra, Superstore and Metro stores.

The business benefits have included improved customer satisfaction and staff morale. Customers report shorter queuing times and better availability for online grocery orders, both of which are operational key performance indicators. Tesco is now developing a set of key measures that will help it better understand the impact of moving hours on both colleagues and customers.

Across the first 44 stores tested, surveys show a 16 per cent increase in the number of colleagues who say “my job has become easier in the past 12 months”, and a 6 per cent rise in colleagues who say their store has the “right hours in the right place”.

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