n recent years, the job market has undergone structural changes. Companies now have a unique opportunity to support their employees through a vast array of options, including remote work, hybrid models, flexible schedules, as well as wellbeing and mental health benefits, stock options, or budgets to support specific costs. In essence, we are talking about flexibility: geographical, time-related, compensation-related, or even payment-related flexibility.

So, what is the real Return On Investment (ROI) of flexibility?

"Any organisation offering benefits to its employees is well aware of the budget at stake. It is imperative that HR leaders understand whether these resources yield the intended results - both in terms of added value for employees and for the organisation itself," reads the report "The ROI of Flexible Benefits," conducted by Forma Research and available here.

Especially given the current economic context, "companies have to pay more attention than ever to where their benefit budgets are allocated." But the company ensures that flexibility pays off: "There is a clear return on investment when offering employees the possibility to choose the benefits that interest them the most. This choice provides a perception of additional value to the overall benefits program, which is more cost-effective than investing more resources in other established programs".

Firstly, it is important to remember that until recently – and still in some organisations – companies used fixed and uniform benefits for the entire workforce in an attempt to meet the individual needs of employees. We all understand that 'one size doesn’t fit all,' so satisfying all professionals with standard benefits is highly unlikely. This is where one of the main advantages of investing in flexibility comes in.

Increased Productivity

With flexible benefits, companies can offer their employees a greater variety of options and place the responsibility on them to choose benefits that make the most sense for their current life situations. Customisation makes the company's value proposition more attractive and generally leaves employees more satisfied. Satisfaction almost always translates to higher commitment and, in turn, improved productivity. Can you see where we are going with this?

Several studies suggest that employees who have the freedom to work from wherever they want are more productive. Examples of these flexible working models include full remote, remote-friendly, and hybrid regimes (provided there is flexibility). These workers experience a better balance between their professional and personal lives, and every hour they spend working counts. They are much more likely to be truly focused while working. And, of course, they are usually happier.

According to a recent survey conducted by the International Workplace Group (IWG) with 1,800 professionals from various sectors across 96 countries, 91% of managers state that flexible workspace enables their company's employees to be more productive. Furthermore, 89% believe that flexible work helps their company grow, 87% think it strengthens competitiveness, and 83% believe it also helps maximise profits.

Increased Attraction Capacity

Another point explaining the ROI of flexibility is related to the talent attraction and retention capacity. In a time when various sectors face a shortage of labour, and competition for the best professionals is high – especially because, with remote work, companies now compete for talent in a sort of 'global village' – increasing attraction capacity is crucial. Those not offering flexibility are out of the game.

The more traditional and obvious elements of the Employee Value Proposition (EVP) include compensation, benefits, and career development. But global trends such as flexibility, purpose, or sustainability are emerging as rapidly assumed components. Several studies show that, while compensation and benefits are important, employees now want jobs that "allow flexibility, balance between professional and personal life, and [follow] the lifestyle they have chosen," according to the Mercer consultancy. "What workers want now is a 'lifestyle contract'".

... and Talent Retention

But it's not just about attracting the best talent; it's equally important to retain them. According to the aforementioned IWG survey, 80% of managers believe that allowing their employees to work from anywhere contributed to attracting and retaining the best talent. Moreover, 58% admit that this geographical flexibility improved the job satisfaction of their employees, and 30% say it helped make employees more loyal.

Constant employee turnover, besides representing costs for the company, can also affect the smooth functioning of a team. Flexible compensation and working hours can also positively influence employees' commitment levels to the company.

Cost Reduction

Flexibility can also contribute significantly to reducing company costs. More than 80% of respondents covered by the IWG study claimed to believe that flexible spaces help companies save money, contributing to the reduction of real estate management costs (such as property purchase, administration, adaptation, maintenance costs, etc.).

Flexible and personalised compensation can also help in this regard. Investing in a flexible benefits policy means tax optimisation, allowing the company to give more to its employees while spending less.

Improved Mental Health

Various studies and experts also highlight the advantages that flexibility can bring to employees' well-being. How can this also contribute to the ROI of flexibility? Well, issues related to stress and mental health problems among workers result in absenteeism, presenteeism, and productivity losses. These issues are costing Portuguese companies up to 5.3 billion euros per year, an increase from the estimated 3.2 billion in 2022, as indicated in the II Report "Cost of Stress and Psychological Health Problems at Work" from the Portuguese Psychologists' Order.

The costs already represent an amount equivalent to what the Portuguese government spent in 2021 on measures to mitigate the impacts of the pandemic, for example. Investing in mental health in companies can reduce losses by at least 30%, and it is recommended that flexibility be part of this equation.