Cost-Benefit Analysis: Flexible Work Systems at AKC Architectural Firm

This report examines the implementation of flexible work systems at AKC Architectural Firm, aiming to optimize employee engagement and address absenteeism. It explores the benefits of teleworking, including cost savings on office space and increased employee satisfaction, while also analyzing the need for additional resources like software and laptops. The report details the costs associated with absenteeism, such as sick pay, overtime, and disruptions, and performs a cost-benefit analysis to assess the financial implications of implementing flexible work systems. It also addresses challenges like managing working hours and preventing misuse of flexible arrangements. The analysis includes assumptions, such as the average number of absent employees, and concludes with recommendations for AKC to improve productivity and employee satisfaction through flexible work options. The report highlights the importance of clear communication, employee management, and appropriate software to ensure the success of these systems.

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HRM
Name:
Course
Professor’s name
University name
City, State
Date of submission

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Table of Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................4
Flexible work systems.................................................................................................................................5
Need to purchase additional resources.........................................................................................................6
Appropriate working hours acceptable for staffs working from home.........................................................7
Costing employee absenteeism in the organization.....................................................................................8
Cost Benefit Analysis..................................................................................................................................9
Assumptions..............................................................................................................................................10
Conclusion.................................................................................................................................................12
References.................................................................................................................................................13

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Executive summary
This is a paper that seeks to establish the best way that AKC architectural firm can
optimally engage its employees to get the most out of the existing workforce. The paper also
seeks to establish the main reasons why there is a lot of absenteeism by the employees and ways
to solve this challenge from a human resource perspective. Our goal in this paper is to check
whether the company can still continue producing at a good rate if it opted to use flexible work
systems, the cost of using such systems. The report seeks to find out the main issues that would
arise incase the firm decided to use this system. The report also seeks to find out if the
introduction of a flexible working hours would save the company. The report also looks at the
assumptions made while undertaking the cost analysis for AKC firm. For instance we assumed
that on average ten employees are absent from work in a month aech time an employee is absent
there is cost incurred by the company to replace the absentees. The company also pays medical
costs, overtime is also paid for any extra work done during their absent days.
A cost benefit analysis will be done to establish whether the company can save up this situation
by installing software’s that can allow the employees to work from home when they are absent
from work. This report will seek to quantify the benefits and the cost of purchasing a new
software to tackle the absenteeism problem at AKC architectural firm.

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Introduction
Working from home is also known as teleworking, mobile work, remote work and flexible
workplace, it is a work arrangement in which employees do not commute to a central place of
work. It has been adopted by a range of organizations and even the government. The benefits of
working from home include: It does not require an office. This thereby enable the organization to
save on cost that otherwise would have been used on office spaces, office equipment’s, and
lighting for the workers. Working from home enables the organization to upgrade its worker’s
standards of living by giving the employee chance for personal growth through working from
home. Reducing the amount of time they use in commuting from home to work and the time
wasted on traffic jams may also lead to higher job performance, reduce abseetism and increase
the company’s turn over . This help in maximizing profits of the company and at the same time
reduce congestions on the roads by reducing the number of cars on the roads and also reduce air
and environmental pollution that is otherwise caused by congestion of people.
Workers are able to balance their work responsibilities and family roles. Through working from
home workers can be able to offer quality time to their family members, look after the elderly

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keep an eye on their children and even watch over their own personal health Ward, G. (2017).
This improves the society way of life.
There are less distractions from coworkers, unnecessary interruptions, meetings that are not
important can be avoided. This in return lead to more productivity.
You also get to save money used for lunch, coffee and even taxis used in case there are no public
vehicles.
Flexible work systems
The need for flexible working systems in this competitive working environment, is slowly but
gradually creating new opportunities and challenges that can only be met through flexibility in
the workplaces Ward, G. (2017).. Flexible work systems is a system that include flexibility in
the working schedules, scheduling of hours worked and arrangements in regards to shifts and
breaks. The main goals of flexible work systems is for organizations to improve operational
flexibility, enhance employee’s skills, reduce the cost of employment and improve productivity
of employee’s. Organizations that offer such systems improves the level of transparency and
trust from its workers. There are several types of flexible work practice such as homeworking,
mobile working, flexible working hours, shift hours, jobs sharing, career breaks etc.
Availability of software’s that will effectively allow employees to work from
home.AKC architectural firm lacks the significant software that will otherwise allow flexible
work systems. Working from home presents a set of challenges for both workers and employers.
Such software help keep the work organized, sharing of tasks, employee management and also
enable complete administrative tasks.

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Software such 3DS max are essentially needed in the firm, the cost of installing each software is
140 AUD among seven employees the total cost being 980 AUD. This software is designed to
provide a new workflow and new architectural elements such as structural analysis, generating
drawings for constructions and even tracking successive changes Roche, A., Pidd, K., &
Kostadinov, V. (2016). With such software the employees will be able to effectively work from
home offering maximum productivity while fully engaging them.
Need to purchase additional resources
The firm needs to but new resources that are up to date. New laptops with windows, mac or linux
desktops that will be compatible with the new software. Such laptops will be able to be
integrated with the management, enable facilities such invoicing, time tracking, employee
management etc. each laptop is estimated to cost approximately 700 AUD, about 7 of these
laptops will be needed.
Staffs to be educated in relation to the use of home office in relation to taxation
Staffs need to be well informed about the benefits of using home office in relation to reducing
taxation. Since home office expenses are miscellaneous personal itemized deductions and other
work related expenses and professional fees, they don’t usually exceed 2% hence reduce the total
taxation that otherwise would have been incurred if workplace office was used Ward, G. (2017)..
Employees who use a part of their homes for business qualify for a deduction if the business
works for the benefit of the company and the rented portion will be used to perform services as
an employee of AKC firm.

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Appropriate working hours acceptable for staffs working from home
Depending on whether an employee is working at home entirely or occasionally is a factor that
can be used to measure the appropriate working hours , however both home based and office
based employees can also work the same hours, policies should be put in place for effective
sharing of duties, employee management and performance management should be consistent for
the home based workers Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017).
Although it is not as easy to monitor home based workers, they should know what is expected
of them within their roles and perform them within the expected hours.
How to stop workers from abusing flexible working hours
To stop staffs from misusing flexible work systems, a number of measures have to be put in
place, such measures will include
keeping lines of communication open, this will enable more collaboration from monitoring of
workers through conference meetings, skyping etc. , constant roll calling of workers with flexible
time will keep them on toes, installing time tracking software on employee laptops to ensure they
work up to the standard hours, employee management that will enable the firm to keep track of
each employees tasks and duties and ensure they are up to standard.
Issues arising from flexible time working systems
Despite the fact that it is rising in the modern corporate world, flexible working schedule has its
limitations as well;It may mislead the employee on drawing a line between work and home and
hence may concentrate more on family issues and forget about the work. Working under no
supervision may prove difficult to some employees, some workers tend to work well under
pressure from the management and therefore may not produce the desired results if left

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unsupervised. Another arising issue is that customers facing responsibilities will only allow
certain time of flexibility hence making client handover difficult Noe, R. A., Hollenbeck, J. R.,
Gerhart, B., & Wright, P. M. (2017). Also some employees may feel left out I they have to work
on full time basis in the firm while others are working at flextime.
Firms can ensure that they are adequate staffs on site by using employee management
software to keep track of all employees with their duties at all times. This will help AKC firm
keep their employees on toes and make sure that they perform their roles.
AKC firm will have to put in place several arrangements such as open communication
channels between the employees working at flexible times and the administration, this will help
ease delegation of duties and clarifications, they should also implement factors such as career
breaks to give employees time to equip themselves with courses and training that will provide
them with new skills that will help improve the firms performance.
Although flexible time can work well with employees, it will not have similar impacts
with administrators. The administration has to monitor all employees and keep them on toes to
ensure the desired results are given.
Costing employee absenteeism in the organization
In determining these costs, there are several direct and indirect figures that need to be
determined.
1. Sick pay
2. Fringe benefits payments during absence

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3. Overtime payment for the employees filling in the vacancy
4. Cost of recruiting and training extra staff
5. Cost of section shut down and disruptions during absent days.
6. Loss of customers due to inferior product/ service or failure to meet deadline.
Assuming that the firm has on average of seven employees who are absent in a month then the
cost benefit analysis will be calculated as follows.
Cost Benefit Analysis
Costs
Item No. of employees Cost Total AUD
Sick pay 10 2000 20000
Fringe payment 10 300 3000
Overtime 10 500 5000
Cost of Disruptions 15000
Cost of installing a new
program
35000
Total 83000
Benefits
Item Total AUD

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Enhanced Productivity when a new program is installed 40000
Workflow efficiencies 35000
Customer retention 20000
Total 95000
By using cost benefit analysis, we can quantitatively compare returns verses the costs of
investing in a program to reduce absenteeism in the firm.
Assumptions
 There are on average, seven employees who are absent in a month.
 Each time there is absentism, the company is forced to hire an extra person to fill in for
them.
 The company paus or overtime, medical cost and fringe benefits.
Absenteeism is an increasingly important concern, which arouses the attention of companies, as
it brings direct and indirect costs to their occurrences Fitzgerald, S., Murphy, A., Kirby, A.,
Geaney, F., & Perry, I. J. (2018). Although it is something complex to analyze, since there are
several factors that cause it, the concern to reduce these indexes is a critical and priority factor in
several Organizations. It can be defined as absences, absences, delays of the worker.

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Absenteeism is the frequency and / or duration of work time lost when employees do not attend
work. Absenteeism is the sum of the periods in which employees are absent from work, whether
due to lack, delay or some intervening reason.There are several reasons for the absence of the
worker: he may voluntarily fail to solve personal problems; for diseases diagnosed in medical
procedures; by accident at work or occupational diseases; legal absences such as paternity leave,
maternity, blood donation and absences that are against the will of the worker, which are
suspensions applied by the company DeCenzo, D. A., Robbins, S. P., & Verhulst, S. L. (2016).
"The absence of work can be considered as a way for the employee to move away from
undesirable situations. Other motives such as work colleague conflict, overloading of tasks,
conflicts with the boss, absence of a career plan cause the absences without legal justification.
And we can not forget the absences caused by alcoholism and chemical addiction.
In relation to diseases, behavior can vary among people, because the same pathology and with
the same seriousness, can motivate or not a worker not to attend the job, can be caused by illness,
family reasons, personal reasons, financial difficulties and transportation, lack of motivation,
improper attitudes of the employer, among others Kocakulah, M. C., Kelley, A. G., Mitchell, K.
M., & Ruggieri, M. P. (2016).Because of the complexity, it is still a challenge for companies to
manage absenteeism rates and many absences are paid, making the actual result difficult. It is
necessary for the HR manager to have control of these faults in order to have concrete data on
the costs that absenteeism brings to the company and to know what actions to take in response to
this problem. When there is no control there is no way to measure costs.
The consequences of absenteeism affect the organization internally and externally, involving the
employer, employees and their families and impact the relationship with suppliers and

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customers. According to Bratton, J., & Gold, J. (2017) When one employee is lacking, he or she
is overloading another, often overtime is necessary so that a customer or deadlines are not lost,
and even then, there is a possibility of unproductive results, as this can generate excessive wear
for the employee, besides of destabilizing the entire team,resulting in customer dissatisfaction for
not receiving due attention in the agility and quality of the service delivery or delivery of the
product. Calculating the indexes is important to identify which types and sectors are most
frequently absent. Only in this way can it be solved and monitor the results of the applied
actions. To reduce these absences at work, some companies conduct incentive programs: awards,
trainings, improvements in working conditions, counseling, disciplinary measures and
organizational climate surveys with feedback to obtain information on how the employee feels
about workplace.
Conclusion
From this report, flexible work analysis will offer AKC employees with options of how and
when to work, it will greatly enhance employees work life balance and at the same time ensure
employee satisfaction. By putting in place the mentioned policies, the firm will be able to able to
retain most of its highly skilled employees by reducing absenteeism in the work place. AKC will
need to invest on modern technology to help employees work remotely.
Managing people in work contexts means controlling the factors that interfere in the quality of
work and life of employees, not in the sense of identifying the best conditions for each service,
the necessary skills to be developed, the factors that motivate the workers, the resources and the
necessary structures to carry out the activities. Through the integrated work of HR, Medicine and
Occupational Safety it is possible to detect the interferences in the quality of the relations and the

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work environment and thus to solve them with a good management of people so that the positive
changes happen, since the absenteeism does not harm only the company, but also the worker.
The cost benefit analysis show that the benefits accrued by the firm to purchase a new program
to deal with absenteeism far outweighs the costs.

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References
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.
DeCenzo, D. A., Robbins, S. P., & Verhulst, S. L. (2016). Fundamentals of Human Resource
Management, Binder Ready Version. John Wiley & Sons.
Fitzgerald, S., Murphy, A., Kirby, A., Geaney, F., & Perry, I. J. (2018). Cost-effectiveness of a
complex workplace dietary intervention: an economic evaluation of the Food Choice at Work
study. BMJ open, 8(3), e019182.
Jinnett, K., Schwatka, N., Tenney, L., Brockbank, C. V. S., & Newman, L. S. (2017). Chronic
conditions, workplace safety, and job demands contribute to absenteeism and job
performance. Health Affairs, 36(2), 237-244.
Kocakulah, M. C., Kelley, A. G., Mitchell, K. M., & Ruggieri, M. P. (2016). Absenteeism
problems and costs: causes, effects and cures. The International Business & Economics Research
Journal
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
(Online), 15(3), 89.
Roche, A., Pidd, K., & Kostadinov, V. (2016). Alcohol‐and drug‐related absenteeism: a costly
problem. Australian and New Zealand journal of public health, 40(3), 236-238.
Ward, G. (2017). Calculating ROI: Measuring the Benefits of Workplace Financial
Wellness. Pension Section, 24.