Flexible working practices not widely used in SMEs

Flexible working arrangements are still underused in small and medium-sized enterprises (SMEs), according to a recent survey that examined the awareness and attitudes of employers and employees regarding such practices. SMEs make little use of most flexible options, tending to rely on shift work and informal flexibility. The findings suggest major differences in employees’ and employers’ views on the practices available and the desired options for flexible working.

About the survey

The results of a questionnaire-based survey on flexible working arrangements in Bulgaria were published at the end of 2008; the survey was carried out by a team of researchers from the Bulgarian Academy of Sciences (Българска Академия на науките, BAS) and experts of employer organisations and trade unions. It is the first nationwide survey of small and medium-sized enterprise s (SMEs) with a particular focus on flexible employment arrangements.

The survey was conducted in 2007 in the framework of the project ‘Flexible employment and security in SMEs in Bulgaria: State and trends’. The respondents to the survey included 196 employers and 452 employees; the latter comprised 232 workers in micro enterprises, 125 persons in small companies and 95 workers in medium-sized enterprises operating in different economic sectors and regions throughout the country.

Key findings

Standard employment prevails

Figure 1 shows that the majority of the survey respondents work under a written employment contract (76%). About 10% of these hold a fixed-term employment contract while the rest have open-ended contracts. Another 13% of the respondents work on civil contracts – that is, a contract for providing services or performing an activity under the obligations and contracts law. However, a relatively high proportion of respondents (11%) are working under unclear employment relations, such as another type of contract, possibly verbal; in fact, this proportion increases to 19% in small enterprises.

Figure 1: Respondents, by type of employment contract and enterprise size (%)

Respondents, by type of employment contract and enterprise size (%)

Note: The figure shows the results to the following question: ‘You work with the employer under a…’?

Source: Vladimirova, K. (ed.), ‘Flexible employment and security in SMEs in Bulgaria: State and trends’, Sofia, Chance AD, 2008

Respondents, by type of employment contract and enterprise size (%)

Furthermore, almost a third of those interviewed in micro and small enterprises reported receiving undeclared wages, compared with only 5% in medium-sized enterprises. Sometimes, companies and employees decide not to declare the workers’ full salary in order to evade income tax and social security contributions.

The length of working time in the company is regulated, according to 72% and 50% of respondents from small and micro-enterprises respectively. However, about 70% of the respondents reported overtime or working hours that were longer than the statutory working time stipulated in the labour code or longer than those stated in the employment contract. The larger the size of the company, the greater the proportion of employees who work beyond the usual working time; moreover, according to a third of them, this work is not paid or compensated. A high proportion of employees report working unsocial hours: about 50% work at weekends and 27% on public holidays.

These findings prove that employment relations in SMEs, especially in micro and small enterprises are characterised by high levels of ‘informal flexibility’ – that is, undeclared work and income, as well as unregulated working time – and thus by high job insecurity and instability. This situation is underlined by the high turnover of employees. The average respondent’s job tenure is 2.78 years and more than 30% of employees reported changing job in the last year.

Attitudes towards flexible working practices

The findings reveal a varying but overall high awareness of different flexible working practices. The employers interviewed were more aware of all flexible working options than the employees (Figure 2). Nevertheless, 11% of the employers and 14% of the employees were not aware of any of these practices.

Figure 2: Awareness of flexible working practices (%)

Awareness of flexible working practices (%)

Note: The figure shows the results to the following question: ‘About which forms of flexible employment have you heard?’

Source: Vladimirova, 2008

Awareness of flexible working practices (%)

Some 74% of employers reported that they provided one or more flexible working practices to their employees. Figure 3 shows that shift work was the most widely implemented flexible working practice (46%), followed by part-time work (24%), flexible working time schedules (24%) and hourly working (23%). Working at home (4%) and telework (11%) were the least common options available. However, a quarter of employers and a third of employees reported that none of these practices were available in their companies.

Figure 3: Attitudes towards flexible working arrangements (%)

Attitudes towards flexible working arrangements (%)

Note: The figure shows the results to the following questions: ‘Which forms of flexible employment are implemented in the company?’ and ‘Of which forms would you take advantage?’

Source: Vladimirova, 2008

Attitudes towards flexible working arrangements (%)

The survey highlights substantial disparities with regard to the proportion of employers and employees recognising the availability of different flexible working practices. For example, 46% of employers and 35% of employees report that shift work is possible in their company. Meanwhile, 4% of employers and 15% of employees consider that working from home is an option in their enterprise; these proportions are 11% and 27% respectively for telework. Such significant differences may be due to unclear employment status or poorly communicated information by the employer on the options available.

On the whole, employees’ and employers’ attitudes towards flexible working practices are positive. However, 25% of employees and 16% of employers choose not to adopt any of the flexible options.

A flexible working time schedule was the most desired option among both employers (47%) and employees (35%) and they would take advantage of it, as shown in Figure 3. However, in most other options, a discrepancy arises between the employers and the workers. While the employees would welcome telework (33%) and part-time work (28%), the employers are more likely to take advantage of hourly working (44%) and shift work (42%) – which are the least favoured by their staff.

Commentary

This study adds to the recent flexicurity debate in Bulgaria and throughout Europe on balancing flexibility and security in employment. The findings reveal that flexible work patterns are still underused in SMEs. Nevertheless, the results paint a mixed picture of flexible practices, with implications for job security and job quality in SMEs. In the light of the survey findings, it is evident that employees should be provided with more information on the options available and that policy options should be agreed between employers and employees.

Nadezhda Daskalova, Institute for Social and Trade Union Research (ISTUR)

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