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Finland and flexibility: some lessons for Aussies

Finland has retained its position as the happiest country in the world for the seventh consecutive year, thanks to its work-life balance. Yet Australia was ranked tenth. Is there a risk that Australia is going backward in terms of workplace flexibility?

10 Apr 2024

Catherine Ngo

Content writer, presenter and podcaster

Finland has retained its position as the happiest country in the world for the seventh consecutive year, as revealed in the annual World Happiness Report. The report, published by the Wellbeing Research Centre at the University of Oxford, ranks countries based on factors contributing to overall happiness. Thanks to its work-life balance, this Nordic nation maintains its top spot.

A History of Progressive Flexibility Policies

The Working Hours Act, implemented in Finland in 1996, has established a progressive approach to work schedules. It allows eligible employees to adjust their work hours within a three-hour window. For instance, an employee who prefers to enjoy some daylight hours during the winter months in Helsinki, where the sun rises around 9 am, can start work at noon without facing repercussions. Similarly, parents can begin their workday earlier to align with their child's school schedule.

A 2011 study by the international accounting firm Grant Thornton revealed Finland had the most accommodating work schedules. A remarkable 92% of Finnish companies allowed their employees to modify their working hours, 76% in the UK and the US, 50% in Russia, and a mere 18% in Japan.

In an interview with the BBC, Tarja Kröger, an advisor at Finland's Ministry of Employment and the Economy, emphasised that allowing employees to manage their time effectively enhances productivity. This flexibility enables them to balance work and personal life demands, resulting in increased efficiency and job satisfaction.

Is flexibility fading in Australia?

The report ranks Australia as tenth in the world, and whilst this is a pretty good ranking, is there a risk of Australia going backward in terms of workplace flexibility?

Amidst the shift to a post-pandemic world, employee rights to work from home are facing scrutiny. Employment and Workplace Relations Minister Tony Burke stated that the Fair Work Commission initiated a review of modern workplace awards in September.

The Commission will explore whether the award should include a right to work from home for Australian employees as part of a broader review of how workplaces can facilitate work-life balance. During the COVID-19 pandemic, 40% of Australians worked from home, but some corporations are scaling back this practice.

Some large banks, such as Commonwealth Bank, have imposed mandates requiring employees to work from the office for a certain percentage of time. A Fair Work Commission discussion paper acknowledges the benefits of working from home, including expanded employment opportunities, reduced commuting, and no loss of productivity in hybrid work models.

Minister Burke emphasises the need to identify barriers in the award system that hinder flexible work arrangements when they align with the interests of employers and employees. He acknowledges that the right to work from home cannot be a blanket guarantee and may only be feasible in some work situations.

Prime Minister Anthony Albanese emphasises the need for flexibility and a "common sense approach", seeking solutions that benefit both employees and employers. Opposition Leader Peter Dutton criticised the government's efforts, claiming they cater to union demands.

A report from the Committee of Economic Development of Australia (CEDA) highlights the benefits of remote work for workers with disabilities and parents with young children. Since 2020, these groups have experienced greater recruitment in occupations that transitioned to remote work.

Carers and individuals with health conditions have also significantly benefited from the pandemic-induced changes and a strong labour market. The report suggests that these groups, which typically had higher work-from-home rates, are now on par with the rest of the workforce in certain occupations.

The report emphasises the importance of preserving these gains, even as the job market inevitably softens. CEDA chief economist Cassandra Winzar stresses the importance of embedding these advancements in the long term.

So, what does this mean for employers?

For employers, the discussion on workplace flexibility in Australia signifies the need to adapt to employees' evolving expectations. The Fair Work Commission's review of modern workplace awards may introduce a right to work from home, indicating a shift towards hybrid work models.

Employers should consider the benefits of remote work, such as expanded employment opportunities, reduced commuting, and maintained productivity, while navigating the feasibility of flexible work arrangements in their respective industries.

Striking a balance between employee preferences and organisational requirements will be crucial for employers seeking to attract and retain talent in the post-pandemic era.