At Castle House hotel in Kendal, Cumbria, staff turnover is reducing each year. In 2002, it was 40%; by 2003, that figure had dropped to 35%. Not bad in an industry where 100% turnover is the norm. More importantly, that fall relates to a £12,500 reduction in recruitment costs.

How have they done it? The answer lies in implementing flexible working practices, or (to use a much-coined phrase) work-life balance. "Work-life balance has become more high-profile," says personnel manager Julie Chapman. "Employers are starting to recognise that if they can be flexible, then they have a powerful recruitment and retention tool."

The 100-bedroom Castle House, which employs 105 staff, was the first hotel in the country to achieve a work-life balance standard from Work Life Balance Consultancy, a company working with small and medium-sized companies across the UK to promote work-life balance. Investors in People also has a work-life balance module, offering guidelines intended to help organisations get to grips with the issues (see Useful Links, page 34).

It may be the type of topic that makes you groan but, whatever your reaction to work-life balance, the fact remains that much of it is already law. "The business benefits of taking a flexible approach to working arrangements have developed work-life balance into a key tool for improving performance and recruitment," says Patricia Hewitt, trade secretary at the Department of Trade and Industry.

She adds: "The greatest asset of any employer is the [employee] who walks out of the workplace at the end of the day and spends time on other interests and responsibilities. A motivated and healthy employee is much more valuable to a business than someone who suffers from high stress levels."

A survey carried out by Reed.co.uk this year, on behalf of the DTI Work-Life Balance campaign, showed that more than half of those surveyed who work in the leisure and hospitality sector would choose flexible working as the benefit they would most look for in their next job. Only 14% would choose gym membership and a mere 5% a company car.

Women, it seems, struggle most with the work-life balance dilemma. A recent Work-Life Balance report from Mintel found that almost three in 10 working women (28%) believe that it is becoming harder to balance the demands of work with those of family life, compared with just one in five (21%) working men. And as the number of working women is set to grow faster than the number of working men over the next five years, these feelings are likely to increase.

The DTI has calculated that if just 10% of non-working mothers returned to work after maternity leave, employers could save as much as £39m each year in recruitment costs alone.

But work-life balance is not just about childcare. Other common reasons for choosing flexibility include:

- Caring for older people
- Further education and training
- Transport/distance from work
- Other interests
- Quality of life
- Approaching retirement.

Chapman at Castle House hotel, for example, has Tuesday afternoons off in high season - to play golf. As a manager, she works time in lieu so her contract remains unaffected. But, she says, it is possible to incorporate all sorts of arrangements. The head chef and his wife both work at Castle House, for example - one works 11am-3pm and the other 3pm-11pm so they share childcare arrangements.

As well as the reduction in staff turnover, there have been other tangible benefits at Castle House. Job applications have increased by 15% overall, and 75% of women return to the hotel following maternity leave. This rises to 85% of those who benefit from the hotel's own enhanced maternity scheme, on offer to those who have completed longer service. "All three women taking maternity leave in 2002 returned to work," Chapman says. "They are all very effective and highly valued members of staff. Replacing them would have meant £9,000 in recruitment costs."

Chapman calculates that the sickness rate per person in 2002 was £50.52, falling to £41.60 in 2003, based on having to buy in cover. The national average is £434.


Annualised hours
Another approach that's becoming popular is to have annualised hours. The 168-bedroom Beardmore Conference hotel in Clydebank, Dunbartonshire, adopts this policy for its 76 full-time staff.

Hours are aggregated on an annual basis to 1,950 hours per year, based on 37.5 hours per week. The system allows the hotel to cater for the peaks and troughs of business, staffing up during busy times such as for conferences and weddings, and giving people more time off during leaner moments.

Staff clock their hours in a virtual "bank". They then work the hours required to fit in with the event in question, such as staying until the last guests have left a wedding. In return, they can ask for time off when they need it - for example, to collect a sick child from school - without their pay being affected.

Human resources adviser Carol Hampson says the system is explained to all staff at interview and during inductions, and on the whole it works well as it benefits both parties. "It is a valuable retention tool," she says. "There are some people who would prefer to be paid overtime, but the majority realise that it cuts both ways. We sell it as a positive advantage of working for us, which is important in such a difficult labour market."

Staff turnover at the Beardmore is 35-40%, well below the industry norm. As well as annualised hours, staff can choose flexible benefits, such as private medical insurance, gym membership and spa treatments. Time off to care for dependants, career breaks and termtime-only working are all acceptable, as long as the job can be done.

So does instilling work-life balance cost more? The answer is: "Not necessarily." More employees can result in higher administration, training, space and equipment costs. And by retaining experienced staff you will also reduce the cost of recruitment and training. If staff are working at home, there may be the extra cost of setting up IT support, but long-term costs can be reduced because less office space is needed.

Communication is key to making the whole thing work, particularly in areas such as job shares. In this case, communication systems should be formalised, perhaps by programming in a period of overlap, particularly in jobs that carry significant responsibility. It's also important to ensure that holidays are taken at different times and to apportion bank holidays evenly to ensure fairness.

Know the law

The Employment Act
The main provisions of the Employment Bill 2001 came into force in April 2003. The main changes it brought about are:

- Statutory maternity pay (SMP) increased to £100 a week, or 90% of weekly earnings, whichever is lower.

- The paid maternity leave period is extended from 18 weeks to 26 weeks.

- Women who have completed one year's continuous service with their employer are entitled to an additional 26 weeks' unpaid maternity leave.

- Working fathers are entitled to two weeks' paid leave at SMP rates. This is in addition to their right to take unpaid parental leave.

- One adoptive parent is entitled to 26 weeks' paid leave at SMP rates. In addition, if they have completed at least one year's continuous service with their employer, the adoptive parent is entitled to a further 26 weeks' unpaid leave.

- Employees with a child under the age of six (or under the age of 18, if the child is disabled) have the right to apply to their employer for a variation in their working times or hours. Requests can be refused only if there is a clear business reason.

- Parental leave is a right for parents seeking time off work to look after a child. It is available to employees who have or expect to have parental responsibility for a child. To be eligible, employees generally must have one year's continuous service with their current employer.

- Employees get 13 weeks' leave in total for each child, though parents of disabled children get 18 weeks. Employees will be able to take parental leave in short or long blocks. As long as they give 21 days' notice, they can take parental leave at any time up to the cutoff point which applies to them: parents of children born between 15 December 1994 and 14 December 1999 can take leave up to 31 March 2005; parents of children born on or after 15 December 1999 can take leave up to their child's fifth birthday.


Putting it into practice
- Ensure that there is cover for times when an employee is not at work

- Set up clear paths of communication to ensure all employees understand new practices

- Explain to all new employees, at interview and induction, how the system works

- Apportion bank holidays fairly to part-time workers

- Consider all requests for different arrangements

- Look to the benefits of creating a motivated workforce, rather than view work-life balance as yet another thing to have to deal with.



Facts and figures
- 78% of women with children under 12 work outside the home

- The hospitality industry consists of 33% males and 67% females

- 54% of people in the hospitality industry work part-time

- 40% of the hospitality workforce is under 25

- The typical cost of replacing a manual hospitality worker is £1,000

- The typical cost of replacing a hospitality worker is £5,000

- 57% of students consider work-life balance the top priority in a future career

- An employee (all industries) stays in a job for an average of 2.5 years

- The annual cost to British industry of stress-related sickness is £12b

- 19% of the British workforce is employed in a 24/7 industry

- 11% of employees work more than 60 hours a week

- The average number of sick days taken by each employee in any one year is 7.8 days, at a cost of £434 per person.


How employers could offer flexibility
- Flexi-time n Staggered hours n Time off in lieu n Compressed working hours n Shift swapping n Annualised hours n Job-sharing n Term-time working n Working from home n Breaks from work n Flexible and cafeteria benefits.


Useful links
www.dti.gov.uk/er/parental.htm

www.cipd.co.uk
Chartered Institute of Personnel and Development

Centre for Assessment and Recognition
01942 610070

www.iipuk.co.uk
Investors in People, which offers a work-life balance model to follow: 0870 850 4477