Article: Flexible Working Arrangement (FWA) in the Malaysian Context

Introduction

In this tech-driven era, the nature of work and its ensuing patterns have changed and evolved in tandem with societal advancements (Thilagavathy & Geetha, 2020; Shaari & Amirul, 2020). As a result, managers or business owners need to identify and consider the challenges and opportunities for long term business survival.

In today’s world, various developed nations such as the United Kingdom, Northern Ireland, Europe, the United States, Australia, and New Zealand have embraced work-life balance (WLB), that was discovered through flexible working arrangements (FWAs). They could see the benefits of FWAs and its positive effects on employee wellness and business sustainability.

However, in the Asian workforce landscape, WLB is still developing. It is worth noting that the COVID-19 outbreak has also significantly changed what employees globally, including in Malaysia, expect of their workplaces (Starnews, 2021; Murad, 2021). As a result, Malaysians have reassessed their employment expectations and what they look for in their professional careers.

For instance, several criteria such as competitive compensation, WLB, mentorship, career development and a sense of purpose in their professions are among the factors that jobseekers prioritise in a movement that will disrupt conventional work cultures (Starnews, 2021).

In addition, Turanlıgil and Farooq (2019) also claimed that today’s proactive, aggressive and challenging business nature to reach the top necessitates active involvement and commitment from employees. Nevertheless, the onset of the COVID-19 pandemic in 2020 urged many organisations globally, including Malaysia, to quickly adapt to remote working (ILO, 2022). Therefore, in scenarios such as the Coronavirus outbreak, as well as recent technological advancements, teleworking has become essential for business continuity and survival.

Hence, this article aims to prove that FWA will provide a win-win situation for employees and employers in Malaysia by fulfilling the needs of both sides, if conducted efficiently.

The Concept of Flexible Working Arrangement (FWA)

Generally, flexible, non-standard or alternative work arrangements can be defined as a working option that enables employees to work outside the traditional boundaries of a formal organisation. FWAs have long been enforced in developed countries, and developing nations are beginning to transform toward more flexible work arrangements as well (Stella, Iheriohanma & Chinedu, 2020).

Nevertheless, FWAs have primarily been made possible by technological developments as it enables the adoption of more flexible schedules (Andrejic, 2017).

In other words, the core concept of FWA is that employees can negotiate with their employers to establish flexibility in their work hours (Amirul et al., 2020; Barney & Elias, 2010; Caillier, 2018; Coenen & Kok, 2014) while still carrying out their regular tasks and responsibilities (Groen, van Triest, Coers, & Wtenweerde, 2018). As Shaari and Amirul (2020) declared, FWAs can be classified into different categories, as displayed in the figure below.

FWAs have been examined by various researchers from different perspectives.  However, the consensus has been that FWAs are advantageous for both employees and employers by positively affecting employees’ work-life balance, well-being and happiness. In addition, scholars also stated that FWAs lead to positive impacts on efficiency and productivity in the workplace (Caillier, 2018; De Menezes & Kelliher, 2017; Coenen & Kok, 2014; Richardson & Mckenna, 2014; Barney & Elias, 2010; Kossek et al., 2010; Lee & Hong, 2011; Ollo-lopez & Bayo-moriones, 2010).

FWA in Malaysia

Undoubtedly, the COVID-19 outbreak spotlighted how working from home has not only been implemented globally out of necessity, but also changed how we think about traditional work environments. However, as Malaysia is transitioning to the endemic phase, more organisations are embracing FWA policies that enable employees to decide on work arrangements in accordance with their requirements.

Nonetheless, businesses in Malaysia, like any other country, vary in terms of operations, structures and styles (HRD, 2022). Due to that, FWAs can only be implemented in specific industries (e.g., marketing, IT, education) as some areas of businesses can have flexibility while others cannot. Therefore, the final decision highly relies on the industry and business conditions (HRD, 2022; Tilo, 2022).

According to a survey conducted among 1,021 employees and 231 employers by TalentCorp and United Nations Development Programme (UNDP) in 2020, 60% of respondents reported their productivity was enhanced or maintained at the same levels, when working remotely.

Furthermore, over 60% of respondents claimed that remote work improved their quality of life. More precisely, female employees who serve as caregivers at home believed working remotely helped them to manage work and family obligations excellently. The report findings revealed that employers who adopted FWAs witnessed improved productivity, while their employees attained better quality of life.

In the near future, the FWA will be a permanent option for many Malaysian employees. In 2020, the onset of the COVID-19 pandemic prompted various organisations around the globe, including Malaysia, to adapt to remote working. However, the Malaysian government announced that employees can apply for FWA from the 1st of September onwards when the Employment Act amendment comes into place. As Maric (2019) stated, employers design FWA to give employees more flexible schedule that will allow them to perform the obligations required of their position. Notably, FWA implementation aims to boost companies’ flexibility, promote a better work-life balance and enhance organisational performance (HRD CORP, 2022).

As part of the planning process for the FWA Policy, HRD Corp undertook a public survey across all states in Malaysia by targeting employees from all industries and each group. The survey featured 1,136 respondents, comprising two groups (22% employers and 78% employees). The tables below summarise the key factors of a survey conducted on the FWA policy among employees.

The survey further revealed that more than 60% of employees are permitted to work from home, while the majority of them (41%) use WhatsApp or other messaging platforms as a method to report their daily activities rather than other standard methods such as virtual meetings, monitoring softwares, phone calls and emails (HRD CORP Survey, 2022). In addition, 85% of employees strongly agreed that having FWA within the organisation is crucial.

The survey also featured employers to gauge their responses to FWA. In summary, 49% of employers stated that they require their employees to report their daily activities and they are most likely to approve FWA requests if they are related to personal health problems or childcare needs. However, 79% of employers believed that all companies must have a formalised FWA policy.

The above discussion included some significant points taken from the survey conducted by HRD Corp with the involvement of an NHRC Research Fellow, Professor Dr Balakrishnan Parasuraman who provided inputs, comments, and feedback on the research entitled ’Policy Planning for Flexible Work Arrangement in Malaysia’. The research garnered mass media coverage from reputable media outlets including Astro Awani and RTM.

The Procedure for Applying FWA in Malaysia

As part of the latest amendments to Malaysia’s Employment Act, 1955, effective from the 1st of September, local Malaysian employees who prefer to work flexibly will be able to apply for FWA with their respective organisations (HRM Asia, 2022). In addition, former Deputy Human Resources Minister Datuk Awang Hashim stated, the FWA application should be submitted in a written format, consisting of changes in working hours, days, and the location of work (Lee, 2022; HRM Asia 2022; StarNews, 2022; Edge Markets, 2022).

Datuk Awang Hashim further declared that employers are also responsible for providing their answers in the written format to accept or reject the applicant’s request within 60 days. However, in instances where an application is rejected, employers are responsible for providing reasons or justification for the rejection.

Another study has also been conducted on the four-day work week to understand whether employers in Malaysia will encounter severe impact on their business if such an arrangement is implemented. Although these studies are still ongoing, but from the findings, it was observed that four working days have not reduced the productivity of employees. Nevertheless, if employers are adversely impacted, the study will be further discussed at the Ministry of Human Resources (Tan, 2022; Human Resources Online, 2022).

Benefits of FWA for Companies

The necessity for flexible working is growing as the changing setting of work is creating new challenges and opportunities that enterprises can only meet with the agility that FWAs provide. However, to persuade companies to adopt or expand flexibility, the benefits must be apparent.

Based on the above, adopting FWA is advantageous for companies. It is imperative for organisations to be employee-friendly and provide flexibility.  Creating an environment of trust by offering employees a better work-life balance leads to higher morale and a more positive environment.

Benefits of FWA for Employees

Indeed, companies and employers both reap the rewards of flexible working.  However, adopting FWA can also benefit employees. Undoubtedly, work-life balance is possibly one of the most crucial aspects of a job in today’s modern world. In some cases, employees believe that having WLB is more vital than the actual wage (Rob, 2021). In addition, FWA can also improve the health and wellness of employees as it is believed that employees with fixed schedules feel more stressed due to the strain of having a strict and constant programme.

Moreover, as Mahmood, Nasir, Hamid & Munap (2019) stated, job satisfaction is associated with employee performance leading to higher productivity (Rob, 2021). As a result, remote working enables employees to work for longer hours, presenting a paradox effect as freedom and flexibility allow employees to love their jobs and be more productive as well.

FWA has been supported by studies indicating positive correlations between employee engagement and job performance (Castrillon, 2022; Zeijen, Peeters, & Hakanen, 2018; Bal & De Lange, 2014), as employees with more flexibility in their work schedule are more engaged due to the freedom which enables them to work at their own pace. In essence, employees who are authorised to work flexibly commonly reciprocate this favour by being more productive and engaged in the workplace (Ron, 2021).

Generally, employee wellness is a vital concern for managers across various companies. Thus, taking crucial steps to inspire employees to be passionate and enthusiastic about their job is critical to retain top talents (Half, 2019). However, occupational stress, also known as employment stress, is a widely recognised issue often referred to as a silent killer (Prasada, Vaidyab & Mangipudi, 2020).

It substantially impacts an employee’s well-being, which could lead to absenteeism, lack of inspiration, poor performance, low productivity, and exhaustion. In other words, it is believed that jam-packed schedules can contribute to feelings of chronic stress and anxiety. Nonetheless, flexible workplaces can diminish stress as employees can work during the best time that suits their lifestyle (Whalen, 2017). Therefore, offering flexible work to employees can boost staff morale and improve their physical and mental health while preventing burnout caused by overworking as well (Rob, 2021).

Furthermore, allowing employees to stagger their working hours and schedule helps them in avoiding commuting burdens by reducing additional costs as they can work from home or any independent location. Rob (2021) further continued that apart from saving money, employees can also save more time because they will be able to spend more time on their personal growth as well as their families since FWA does not require them to commute long distances to work, daily.

Therefore, from the above discussion, it can be concluded that FWA can have numerous positive effects on employees.

Innovative Case Study of a Company Adopted FWA

In today’s modern and technological-based environment, the workplace is evolving as technology enables employees to do their best anytime and anywhere. An example of a company that implemented FWA is the American multinational technology company Dell, which develops, sells, repairs, and supports computers and related products and services. In addition, Dell is owned by its parent company, Dell Technologies, which believes that work is not tied to where the employees are but what they do. Dell Technologies’ Connected Workplace programme enables eligible employees to choose the work style that best fulfils their needs on the job and in their personal lives (Dell.com).

Moreover, Dell’s journey toward having a more flexible work culture began in 2009 as they expanded the Connected Workplace Programme across all their markets worldwide. In general, tech firms are well-positioned to offer flexible working, and Dell has over a decade of experience in building up a flexible working culture by enabling employees to choose their hours, work remotely, and keep in touch using numerous tools such as Slack and Microsoft Teams (IFB, 2020).

Additionally, Dell offers FWAs to several departments, including teams supporting regional and global clients, those in charge of regional and global teams or executing regional or international projects, and support teams where FWAs make the most sense which leads to higher productivity.

Future Trends

The COVID-19 pandemic has changed everyone’s reality overnight, while countries, their economies, organisations, and individuals have encountered the shock of a lockdown and the fear of uncertainty. Hence, it is widely agreed that the pandemic pushed workplace technology into the spotlight, thereby elevating its role (Hall & Angela, 2020).

Additionally, before the COVID-19 pandemic, telework policies were not widely enforced in most countries, including Malaysia. Although in 2001, an expert scholar in IR and HR (Parasuraman) researched and discussed telework, the COVID-19 pandemic was the primary reason for teleworking popularity in the Malaysian context as, in the early months of 2020, the Malaysian government urged organisations to foster teleworking practices to prevent employees from gathering in the same place.

In other words, the pandemic is a tipping point for flexible work, leading to potential employee benefits such as improved work-life balance, greater autonomy, and encouragement. However, this article also clarified that apart from employees, employers and companies too can benefit from FWA as it helps reduce costs, while improving output and commitment.

The way we work is changing rapidly while the forces of technology, community, demography, and globalisation are forming new obstacles and opportunities for companies in Malaysia and beyond. Nevertheless, fulfilling the challenges and leveraging future opportunities require adaptability. Therefore, FWA allows companies to begin fostering a more agile workplace.

In Southeast Asia, Malaysia is a multiracial nation. Eventually, it is pivotal to adopt FWA to have a better work-life balance and attract more local employees to the workforce by reducing the country’s over-reliance on migrant workers (NST, 2021). Furthermore, it is imperative to be aware of FWA benefits as it will soon become a permanent option for Malaysian employees.

The benefits of flexible hours and schedules are immense for both parties. As a company, flexible schedules provide a recruiting edge and reduces overhead. For the employee, FWA leads to a healthier work-life balance and boosts job satisfaction (Rob, 2021).

**The author would like to acknowledge and say thanks to Ms. Nazanin Dara, a Ph.D. Student from the University of Cyberjaya who assisted me in this research project. **

 Professor Dr. Balakrishnan Parasuraman is a Professor of Management/HR/Industrial Relations at the Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan (UMK) based in Kota Bahru, Kelantan. He is a member of the International Honor Societies of the International Employment and Labor Relations Associations (IIRA) based in Geneva, Switzerland, Malaysian Institute of HRM, and International Employment Relations Association, Sydney, Australia.