Rory Sutherland Rory Sutherland

The economic case for flexible working


Is flexible working better or worse for productivity? What is the correct blend of remote and office work? Billions of once-healthy pixels will die in the conduct of this debate. But is it possible that we are asking the wrong question entirely?

Instead of asking the proximate question ‘Do we want our employees to work remotely?’, businesses should perhaps be asking: ‘Are we ultimately better off if consumers can work remotely?’ If you are Pret, the Duke of Westminster or Southeastern trains, the answer is possibly no. For almost everyone else, however, the answer is a loud yes.

Having richer, more leisured customers is just as valuable as having more productive employees

There is a tendency among the more moronic type of business to resist any concession to the quality of life of their employees; anything that seems like an ‘easy option’ is treated with suspicion. But this rigidity is itself profoundly anti–market — if, that is, you define the proper function of free markets as a continuous creative process of unearthing new voluntary arrangements of mutual benefit to two or more parties.

The same process of evolutionary discovery should apply to the job market as any other market. If people prefer flexible hours to shorter hours, or prefer not to give half their pay to a buy-to-let landlord, it makes sense to explore this. All other things being equal, rewarding staff with non–monetary goods is both more tax–efficient and more profitable than paying them more money for the same work. This process already happens naturally in industries with a variety of working patterns. One reason coffee shops are so abundant is that young people often prefer jobs which leave their evenings free — which restaurant and bar work can’t offer.

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