Small firms looking to hold on to their top staff must be more flexible in the hours they offer key employees, according to two recent surveys.

Research by Microsoft revealed that 73% of staff see flexible working as a decisive factor in which job to accept, while over half (52%) said the ability to work from home would make their life less stressful.

But the study also showed that just 16% of firms had a formal flexible working policy in place and a quarter of young people who wanted to work remotely believed such requests would not be welcomed by employers.

“If British businesses are to address the productivity gap between themselves and the leading Western economies, these challenges must be solved,” said Alex Reeve, UK director of Microsoft Mobile Communications Business.

But another poll by First Direct Bank suggests that flexible working is beginning to infiltrate British workplaces, albeit in a less formal manner. The survey claimed that more than a third of UK workers now work outside the traditional nine-to-five office arrangement.

The findings have been welcomed by not-for-profit organisation Work Wise UK, which is staging its second annual Work Wise week – where companies are encouraged to allow staff to work from home – between May 16-21.

“What we are seeing is the beginnings of a complete revolution in the way we work,” said Phil Flaxton, chief executive of Work Wise UK. “The changes are unavoidable and crucial if the UK economy is going to be able to compete in the global economy in the face of competition already emerging from India and China.

“Shifting working practices to meet market demands, such as 24/7 service, is vital for competitiveness,” he added. “Those companies that don't change to meet market demands will not be here tomorrow.”