Compressed hours: the benefits for businesses? | HR blog

What are compressed hours and how can this style of working benefit both employees and the business? What could be the potential disadvantages? HR consultant Kate Marchant of Running HR Ltd dives into the world of compressed hours and what businesses need to consider.

What are compressed hours?

First up, what do we mean by compressed hours? In many ways, it does what it says on the tin: hours are compressed to allow employees to work their contracted weekly hours over a fewer number of days.

Compressed hours can work in a variety of ways. A standard example is one where an employee working Monday to Friday on a 9-to-5 basis changes to work longer hours Monday to Thursday, so they can have Friday off.

Typically, this could mean starting earlier and finishing later Monday to Thursday so as to ‘earn’ enough time to avert the need to work on the Friday. This is not limited to total days – employees can opt, for example, to come in an hour early each day so they can take back a morning/afternoon during the week.

Compressed hours and flexible working

Compressed hours is a type of flexible working and any request to work in this way would amount to a statutory request under UK employment law, for which there is a legal process to follow. There is a legal right to make a request to work in this way but not a legal right to get flexible working.

What are the benefits of compressed hours?

For employees it allows them to:

• Have an enhanced work/life balance
• Increased ability to pursue hobbies, studies, and family stuff
• Maintain their full salary and benefits and possibly save a day’s cost of commuting

For employers it can provide:

• Increased productivity
• An extension in operating hours
• A reduction in absenteeism rates
• Happier and more motivated employees
• Improved retention rates

Are there any disadvantages to compressed hours?

For employees:

• Although increased productivity can be an output of compressed hours, it is also possible it may have the opposite effect. If an employee is working long hours for 4 days a week it may make them tired and perhaps less productive or more prone to making errors.

For employers compressed hours could:

• Present difficulty in scheduling meetings
• Possibly cause Health and Safety issues if tired employees are operating machinery
• Throw up staffing challenges from time to time
• Cause confusion around holiday entitlement

Calculating holiday entitlement for employees on compressed hours

The first thing to remember is that, for example, a full-time employee working compressed hours is working the same hours as a full-time employee who is on a full week. They are therefore entitled to the same holiday entitlement, not a pro rata of the standard hours equivalent – this is not part time working!

The logical approach is to calculate the holiday entitlement on an hourly basis as opposed to days. So, if one of the working days falls on a bank holiday, for instance, the employee’s usual number of hours for that day will be deducted from their leave entitlement. This is because the hours worked on the compressed days are longer to make up the full-time hours.

For example, an employee working standard hours and days will get 8 hours off, while the employee on compressed hours will need, say, 10 hours off.

Automatic holiday entitlement calculations and a streamlined request process are at your fingertips with holiday management software.

Example (based on 10 hours compression)

If someone works 38 hours over 4 days instead of 5 days, their holiday entitlement (based on 28 days or 5.6 weeks entitlement) is as follows…

• 38 hours x 5.6 weeks = 212.8 hours entitlement for the year

So, if the compressed hours employee has had one bank holiday off, it means they then have 202.8 hours left for the year.

Other business considerations for compressed hours

As with any change to business structure, granting an employee or multiple staff the option to compress their hours needs to be done carefully and with forward planning. Here are a few more factors to consider:

Will compressed hours suit the business?

Does your business lend itself to compressed hours? Not all businesses do, or at least part of the business may not. This may be the case, for example, in businesses where hours are very rigid and customer focused. However, it is always worth spending some time considering whether a business can accommodate this way of working. The same question should be considered for specific roles within an organisation.

You need to consider requests fully

If an employee makes a request to work compressed hours you must consider it. If you are concerned about the employee working longer hours on fewer days, do not be tempted to dismiss the request out of hand. Instead, explore the idea with the employee and gain an understanding of what they are trying to achieve by working compressed hours. Ask them how they will cope with the long hours and check whether they have considered the implications this.

There is always the option to have a trial period and a review process – at least it means you are giving it a go and are on a better footing to decline the request as it will be based on the practicalities of the trial outcome.

Think about the impact on other workers

While it should not impact their specific workload, it may throw up issues if they need to contact the compressed hours employee on their day out. For this reason, it may be useful to devise a simple handover document to cover all eventualities.

Ultimately, compressed hours can be a useful way for employees to ‘earn’ time out. For employers, it can help with retention rates and even enable the business to offer longer operating hours. Compressed hours are not for every business or role, but where there’s a will there’s a way, and at the very least it is worth exploring whether they can work in your business.

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