Flexibility in employees' working hours could help firms with changes to trading settlement times, experts say

Tailoring employees' working hours to different times of the day could help asset managers' productivity, as well as support European firms adapting to upcoming changes to trading settlement times in the US, experts say.

So-called chronoworking allows employees to move away from traditional nine-to-five office hours and choose their own schedules that align with their chronotypes — the natural times their bodies prefer to sleep.

Scientists have suggested that because an individual's sleep pattern can influence their level of alertness and activity through the day, aligning work with employees' chronotypes can enhance productivity and efficiency.

According to clinical psychologist Michael Breus, people fall into one of four chronotypes. The majority of people are most productive in the middle of the day, between 10am and 2pm, while 10 per cent are light sleepers so their work preferences may vary.

But 15 per cent are early risers and tend to work particularly well in the morning, and another 15 per cent work best late into the night.

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A recent I g n i t e s Eur o p e poll also shows varying preferences in working hours. The majority feel most productive during the morning, while 15 per cent favour working in the afternoon, and 10 per cent prefer evening work.

Caroline Walker, managing director at Cavendish Employment Law, says chronoworking could become an "established and successful way of working in asset management", especially in situations where time zones and demanding trading windows benefit from such flexibility.

Chronoworking could help firms ensure enough employees are available throughout different international trading settlement windows, and boost overall productivity by maximising employees' efficiency, Walker says.

This could be timely as the US regulator is reducing the settlement time for US equities and corporate bonds from two days, referred to in the industry as T+2, to one day, or T+1, on May 28.

Currently firms have until 5pm US eastern standard time the day after a trade to allocate, confirm and affirm the trade, but this will change to 9pm eastern standard time on trade date, which is the early hours of the morning in Europe.

Virginie O'Shea, founder of Firebrand Research, a capital markets research firm, says: "The move of more asset classes to extend trading hours, such as is being discussed by [the New York Stock Exchange], and the shortening of the settlement cycle beyond T+1 will certainly change a lot of dynamics around the need for more real-time support around the clock."

Making working hours more flexible over the course of the day could also boost employee productivity, experts say.

This flexibility has been linked to "increased job satisfaction, better wellbeing, reduced absence and turnover", benefiting both employees as well as companies, says Claire McCartney, senior policy adviser at the Chartered Institute of Personnel and Development.

"Many countries are contending with ageing populations, and rising levels of economically inactive people due to ill health, making flexible working more important than ever," she says.

Mario Cugini, asset management expert at PA Consulting, agrees that some roles can be "more flexible" and done "outside of normal nine-to-five hours".

But he adds that the number of such roles are "relatively limited at present" and he does not expect this to change in the near future.

McCartney says that if chronoworking is implemented "without boundaries" then it "won't work for lots of roles", especially those requiring a "more specific schedule" to address clients' needs.

There are also risks associated with chronoworking, Walker says, including the safety of employees travelling to and from the office outside normal working hours, as well as the cost of keeping offices open later at night.

"Working alone late into the night can be an isolating experience, so care would need to be taken to ensure those employees remain connected to the business for their own mental well-being, " she says.

Firms that have recently had to adapt to employees working from home could also face further challenges to team cohesion if chronoworking was introduced.

Walker says: "The workforce could become disjointed with employees working essentially different shifts."