Different Working Hours Arrangements: A Simple Overview

Agile and Flexible Working Time Arrangements

There are many different variants to the structures and amounts of time that employees spend working for organizations. These variations are designed to serve both the needs of the organizations and the needs of individuals. Organizations can benefit from things like cost reduction and flexibility. Individuals can benefit from flexibility or alignment around existing commitments. These types of arrangements can be very helpful for both organizations and individuals, but they can also be detrimental.

We consider some of the more common variations of working hours below. We also consider the overarching topic of agile working elsewhere in a separate post.

Flexible Working Hours

Under flexible working hours agreements employees work a set number of agreed hours each week, but chose when they work those hours. This gives the employee flexibility to schedule their time to meet their broader commitments. It also provides employers with certainty over labor supply, while also potentially making them more attractive as an employer.

Reduced Working Hours

Under reduced working hours agreements, employees work fewer than full time hours, but work them in an agreed, committed time frame. These are basically part time jobs. They offer individuals who only want to work on a reduced time basis the opportunity for secure employment, while providing employers with a guaranteed set of worked hours. Offering reduced hours contracts may help employers access new pools of talent.

Compressed Working Hours

Under compressed working hours contracts employees work a full time number of hours. However, they do so over a reduced number of days. For example, instead of working 40 hours between 9-5 from Monday to Friday, an employee may work 40 hours between 8-6 from Monday to Thursday.

Compressed working hours help employees manage their work around other commitments. They also ensure that employers have a committed number of labor hours. However, compressed hours can be divisive in organizations if other individuals regularly work unpaid overtime.

For example, if I work two hours extra every day, for example 8-6, Monday to Friday for a full time wage, and my co-worker works 8-6 Monday to Thursday for a full time wage, I’ll quickly become resentful.

Total Hours Contracts

Under total hours contracts an employee will be committed to delivering a certain total number of hours over the course of a year, quarter or month. They will then be able to schedule those hours at their discretion. This will let them manage their time effectively around longer commitments.

For example, a student working in a call center may be committed to working 1500 hours over a year. They may concentrate those hours into their holiday periods, work part time in term time and not work at all over their exam periods.

Total hours contracts provide both certainty and flexibility for employees and let employers access new talent pools. However, they only really work in homogeneous, high volume roles (such as call centers) in which the varied working times desired by different employees may broadly offset each other.

Cyclical or Seasonal Arrangements

Under cyclical or seasonal arrangements, employees are committed to working their contracted hours (which could be full or reduced hours) on a specific schedule reflecting the requirements of the business they operate in.

For example, employees working for tax reporting firms may have increased working hours around the tax filing deadlines for their countries, and reduced hours in other parts of the year. Similarly, accounting professionals working on a monthly process may be requested to work full time for the first two weeks of each month, and then only part time for the remainder of the month.

In other professions, softer versions of seasonal variations exist, for example audit functions are often not allowed time off over the year end audit season.

Zero-hours Contracts

Under zero-hours contracts, employees are not guaranteed to have any set number of working hours per week. Instead, employers will ask them each week to work certain shifts which they can accept or, notionally, reject.

Zero-hours contracts are excellent for employers as these contracts effectively allow them to transfer their labor cost risks to their employees. If footfall volumes reduce, then staffing costs can be instantly reduced too.

From an employee perspective they may provide benefit to some individuals who are in a position to accept and decline work at their discretion.

Care needs to be taken with all variations to working hour arrangements. Perhaps the most important thing to get right is to ensure there is fairness within the employee population, both in terms of who has permission to work in variable ways, and in terms of the impact of the variations on employees.

In our view:

• Flexible, reduced, total-hour and cyclical patterns are all useful.
• Compressed hours only work if other employees only actually work their contracted hours, otherwise it leads to resentment.
• Zero-hours contracts have hardly any benefits for employees or societies, shifting cost and uncertainty to low paid workers for the benefit of organizations. Ultimately, it is often the state or local communities who ultimately bear the cost of this displaced risk.

This post is based on our experiences from the world of work, conversations with had with others and general research. There are no specific references for it.

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