A recent report from the Institute of Economic Affairs (IEA) warns that expanding legal rights to flexible working could increase costs for employers and negatively impact productivity. The report notes that stronger “right to request” provisions in the Employment Rights Act will make it more difficult for managers to decline flexible working requests, leading to additional administrative and operational expenses for businesses. These challenges may result in slower economic growth, reduced wages, and fewer job opportunities.
The report also emphasizes that inflexible wage adjustments, particularly when influenced by unions or workplace regulations, could exacerbate these effects. This issue is expected to be especially pronounced in the public sector, where productivity levels are already a concern.
**Why this matters**
Understanding the potential economic consequences of mandatory flexible working policies is important for policymakers and employers. While flexible working arrangements are popular and can offer social benefits, the report suggests that without careful implementation, they may impose hidden costs on businesses and the broader economy. This could affect job availability, wage levels, and overall productivity, particularly in sectors with less flexibility to adapt.
Source: NewsData