Our findings run counter to claims that businesses are better off taking the 'low road' to profitability

Shirley Dex, co-author

Firms experienced "significant" levels of improved performance if they helped their employees balance their working lives with family responsibilities, it said.

Parental leave, flexible working, childcare help, job share schemes and allowing employees to work from home all led to improvements in productivity and work quality.

The survey, from the Judge Institute of Management at Cambridge University, also said these sorts of measures encouraged loyalty and lowered staff turnover.

Employee relations

Nine out of ten companies which offered flexible working arrangements said they were cost-effective.

However, the improvements in performance seen by commercial firms were not shared by the public sector.

While public sector organisations were more likely than the private sector to offer flexible working arrangements to their staff, these measures did not improve commitment among their employees.

Shirley Dex, co-author of the study, said "Our findings concerning the private sector run counter to claims that businesses are better off taking the 'low road' to profitability, cracking down on wage costs and embracing a long-hours culture."

Ms Dex said that while family-friendly policies may not be the main reason for sales and productivity improvements, there were strong reasons why companies should listen to the needs of their staff.

"If flexible arrangements are popular and help employees to manage their work-life balance, then the mostly positive effects revealed in this study are good reason for businesses to forge ahead with a family-friendly agenda."