Flexible working could become small business's cheapest staff perk

Want to keep your best people? Let them work flexibly

Flexible working could become small business's cheapest staff perk

Two in five managers say flexible working is one of the main reasons they stay with their employer, according to new Chartered Management Institute research. That puts flexibility alongside the things employers have traditionally relied upon to retain people, and for small businesses unable to compete with corporate salaries and benefits, that could actually be good news. New employment rules will make refusing statutory requests more demanding, but flexibility could become one of the cheapest benefits a small employer can offer.

FLEXIBLE WORKING IS A DEAL‑BREAKER

Two in five managers say flexible working is the reason they stay in their jobs. When new laws on flexible working come in employers will have to justify refusing requests for flexible working. For small and micro businesses, this is a cultural shift they can’t afford to ignore.

Flexible working has moved from a “nice‑to‑have” to a top retention tool. New research from the Chartered Management Institute (CMI) shows that two in five managers say flexible working: remote, hybrid or adjusted hours, is one of the main reasons they stay with their employer.

This is a major shift in workplaces, and it has direct consequences for small and micro businesses, which often rely on tight staffing models, in‑person operations and informal HR practices.

New Rules

The Government has announced new plans to strengthen the right to flexible working. Employers must meet people in person to discuss requests and provide a compelling reason for refusing. Requests can’t be dismissed informally or just ignored.

This is part of the wider Employment Rights Bill (zero‑hours ban, anti fire‑and‑rehire rules) and a legal and cultural shift. Small businesses will need to formalise processes they’ve historically handled informally and to prove it they will have to keep good records of conversations, decisions and reasons for those decisions. This will add to the employer’s admin and is a nightmare if there’s no HR person, which is the case in most small businesses. However, there are ways it can be made to work to your advantage.

Flexibility Upsides

Small businesses often assume flexibility is harder for them than for big corporates. The data shows flexibility is now a competitive advantage even if it’s difficult to achieve.

Flexibility keeps good people: small businesses can’t compete with big firms on salary, pension, perks and promotion so flexibility becomes even more important if they want to keep good people. Two in five managers say flexibility is why they stay. For small firms, this is a low‑cost retention strategy.

Recruitment: younger workers expect flexibility and are avoiding roles without it. If small businesses don’t offer it, they may miss out on that talent pipeline.

Productivity: flexibility reduces burnout. Micro‑businesses rely heavily on a small number of people and burnout is a real risk in many small firms. Flexible working reduces stress, improves focus, cuts absenteeism and increases loyalty. It’s a productivity tool.

Cost control: remote or hybrid working can reduce the need for office space and so reduce space costs, utility bills, commuting allowances and equipment needs. For small businesses facing rising costs, this can be a real advantage.

Handling It Well

The CMI warns that managers “need the skills” to balance flexibility with team cohesion. Small businesses often don’t have formal management training or an HR person, so there’s a risk that poorly handled flexibility requests and inconsistent decisions lead to team resentment and reduced collaboration. Managers need to be given the right skills and understand how to deal with the challenges for new recruits.

Backlash

Barclays is facing a revolt by employees after tightening its home‑working policy. It has brought in a mandatory three days in the office for anyone within a 40‑minute commute. Thousands of staff have backed a call to scrap the policy, and employees want compensation for commuting costs.

Sudden reversals of existing policy damage trust and create resentment. Flexibility needs to tailored, rather than imposed and employees in big businesses expect to be consulted, not dictated to. The same applies to small firms and they can’t afford a backlash because they rely too heavily on each individual employee.

Every Small Business needs a clear, fair, written policy, even if it’s only one page. Managers need training on handling requests and explaining decisions clearly. The focus needs to be on outcomes, rather than hours spent at a desk.

You can use flexibility as a recruitment tool because it gives you a competitive advantage. You can schedule days for the whole team to be in the workplace and use structured check‑ins to build team cohesion. Onboarding needs to be a priority. Make sure you keep clear records of all your conversations and decisions because the new laws require transparency.

The Future is Flexible

Flexible working is no longer a perk. It’s a recruitment tools and a retention strategy, as well as a soon to be legal obligation. Two in five managers stay because of flexibility. New laws will force employers to justify refusing requests, and the backlash at Barclays shows what happens when flexibility is taken away.

Flexibility is now part of the costs that are piling up on small businesses, but it can also part of the solution. Handled well, it keeps staff loyal, reduces overheads and strengthens your business. Handled badly, it becomes a risk. The future of work is flexible. Small businesses need to be ready.