EurWORK European Observatory of Working Life

Newcastle Building Society, UK: Towards a balanced flexibility


United Kingdom
Organisation Size: 
Financial services
Towards a balanced flexibility

Newcastle Building Society is a relatively small financial institution operating in the highly competitive home loans market, where it has to survive among banks and building societies that are many times its size. The company has invested in technical systems that allow it more flexibility in how it deploys its staff. It regards flexible working as a way of boosting productivity while at the same time responding to the demands of its employees.

Organisational background

Newcastle Building Society is the 13th largest building society in the UK and is based mainly in north-east England. It has 796 employees, 227 of whom work part time. Just under three quarters (580) of its workforce is based at the head office in Newcastle while the rest are based in its branches, with a small but increasing number working from home.

The Society recognises the Amicus trade union for collective bargaining.

In recognition of its staff development programmes, and the quality of the training made available to all employees, Newcastle Building Society was the first building society in the UK to be awarded Investor in People (IIP) status by the independent Investor in People personnel development organisation. In 2005, Newcastle became one of the first organisations to obtain IIP accreditation under revised and more demanding standards.

The Labour government’s main initiative on flexible working has been targeted at working parents. Since 6 April 2003, mothers and fathers of children aged under six years, or of disabled children under 18 years, have the right to apply for a flexible working pattern; employers have a legal duty to consider such requests seriously. In some cases, this has stimulated employers to consider introducing more widely available flexible working policies.

Description of the initiative

Newcastle Building Society operates in a highly competitive environment, in which many of the largest building societies have opted to abandon their mutual status and gain a substantial boost in their lending potential through flotation on the stock exchange. Building societies that have taken this approach have gained the financial resources to invest in new technology and make full use of online systems and call centres in an attempt to improve customer service. Newcastle Building Society has, however, stated its intention to retain its mutual status.

Albeit on a much smaller scale, Newcastle has managed to invest in new systems to improve productivity; at the same time, it has developed a flexible working policy for staff to allow them to benefit from new working arrangements.

In 1998, Newcastle began investigating how it could improve the way in which it dealt with fluctuating demand for its services: there were peaks and troughs in phone calls, mortgage applications and mortgage application processing. The new systems it introduced enabled it to create a virtual call centre and to introduce greater flexibility in the electronic processing of documents. Incoming calls could be switched from head office to branches and also to the homes of staff who had chosen to switch to teleworking. This meant that more staff would be available to answer calls during peak hours; furthermore, it meant that teleworkers who were off duty but on call could be brought in at short notice to help meet particularly high demand. In a similar manner, document processing could now be more easily carried out by staff at head office, in the branches or again at home.

During this period, Newcastle also began implementing its flexible working policy along with a related but separate homeworking agreement. It wanted to be both more responsive to consumer demand and become recognised as a good employer in an increasingly competitive labour market.

The flexible working policy gives all staff at head office (and to some extent in the branches) the right to request flexible working arrangements; this applies to all staff, not just those with young or disabled children or those who have worked for the company for over 26 weeks.

Newcastle Building Society defines flexible working as ‘any working pattern that is different from the 9am to 5pm, Monday to Friday, working week’. However, it states that ‘any working arrangement must meet the needs of both the Society and the members of staff and for this reason not all flexible working arrangements will applicable to every branch, department or role’.

Most workers who have applied for flexible working have done so to allow them to better organise childcare; other staff, however, have opted for it in order to arrange their free time in a way that suits them best, such as moving to a four-day week to allow them to enjoy a three-day weekend.

Not all requests have been agreed to and Newcastle emphasises the need for individuals to take account of the needs of both the organisation and other employees. For example, it rejected the request of one manager who wanted to compress her full-time hours into a four-day week. The Society argued that the very early and late hours added to each working day would be lost, as no staff were present to be managed at those times. It was agreed that the manager would reduce her hours to four standard-length days a week; the equivalent of the fifth day’s pay would be allocated elsewhere and a new role for another employee could be created.

The implementation of the policy did not create any problems at line manager level and 20 managers took advantage of the scheme to work more flexibly.

A draft of the flexible working policy had been issued to Amicus for comment and was approved of by the union as a welcome improvement on the legal minimum.


More than 10% of staff (85 in all) took advantage of the flexible working policy. The breakdown of the selected arrangements is as follows:

  • 32 employees (nine of them managers) compressed their working hours over four days;
  • 30 decided to reduce working hours (including 10 managers);
  • nine opted for a range of different working times (one manager among them);
  • one employee switched to a term-time only contract;
  • 13 began working from home.

By way of example, a training officer opted to work compressed hours. She works the normal full-time hours but over four days a week, rather than five. This works from the organisation’s perspective, because she does her administrative work between 08.30 and 09.00, and resumes between 17.00 and 17.30, when most employees are unavailable for training.

Newcastle believes that it has benefited from an increase in productivity: the implementation of flexible working has coincided with, and been facilitated by, technological developments that have also boosted staff output.

It also believes that flexible working and homeworking are attractive options that help it recruit staff in a difficult labour market and that have also helped retain skilled and experienced staff.

However, both Newcastle and the trade union recognise there are limitations on flexible working, particularly for a relatively small financial institution that is also trying to maintain a branch network and not switch entirely to telephone and online services.

Exemplary and contextual factors

Newcastle Building Society’s approach to flexible working demonstrates that it is possible both to meet the needs of a service that must respond to fluctuating demands and give employees greater control over their working time. It also highlights the challenges that employers and employees face in making such a system work.

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