Sylvia Hewlett has heard many cries for help in her workshops, but none so sad as that of a young City trader who admitted she was “almost glad” to have been diagnosed with breast cancer because it put her demanding job in perspective.

As the financial sector reels from crisis to crisis, stress levels have almost doubled as survivors of the latest “rif” – reduction in force, a euphemism for mass redundancies – take on extra work in depleted teams even while wondering whether they will be the next out of the door, she said.

The turmoil on Wall Street and its impact on City financial institutions puts at risk everything Hewlett, an economist and champion of women in the workplace, has worked for.

According to The Economist, women are likely to be the main casualties of the downturn as family-friendly initiatives such as flexi-time and job shares are axed. Research by the Institute for Employment Studies at Sussex University claims that managers persist in seeing part-time workers as less committed and are more likely to give them lower performance ratings, leaving them the most vulnerable to staff cuts.

However, some firms are now realising that flexibility and work-life balance can compensate for lower financial packages and bonuses, said Hewlett, founder of the Center for Work-Life Policy in America. “When things get bad, the stars are the ones who quit to take up new opportunities in Hong Kong or India,” she said, and the clever way to stop them was to offer sophisticated working patterns that increased their control over their working lives.

“Time is the new currency if you want to persuade your top performers to stay in the game,” she said. In London recently to hold workshops for high-flyers in the City, Hewlett said she was shocked by the level of demoralisation and anger. “It’s actually worse than on Wall Street because of the sense that workers in Britain have been somewhat undercut or even betrayed by their American employers.

The credit crisis started in the US with a lot of risky, highly leveraged loans and then caused a ripple across the world, especially in London. There was a strong feeling that the smart thing to do was to get out.” She heard how one trader was grinding his teeth so badly at night he needed dental treatment on three molars. “There was a young woman who said, in her actual words, she was ‘almost glad’ of a recent diagnosis of breast cancer because it was thankfully only at stage one and it had put her job in perspective, giving her a cast-iron reason to go home at a decent hour.”

Hewlett was born and educated in the Welsh valleys and then at Cam- bridge University where she won a scholarship to Harvard. “It was a liberation to get to America, where I was no longer labelled by my strong Welsh accent and I stayed there, working as an economist and university professor.”

She had hoped under President Bill Clinton to use public policy to change the entrenched working practices she believed were so alien to women, but when George W Bush was elected, put her faith in the private sector. She recruited six companies as members of a new Hidden Brain Drain Task Force, which she set up in 2003. It now stands at 44 companies that employ a total of 4mpeople in 153 countries.

Far from fearing that the economic downturn will damage the flexible working policies she sees as vital to recruit and retain female talent, she believes it is an opportunity to embed them. “If employers want to keep their good people, they have to offer something beyond the prospect of huge bonuses, especially to professional womenwho are more likely than men to be the second earner and have a choice whether to go on,” she said.

In fact, nearly a third of men in senior positions in Britain would like to work shorter hours, compared with a fifth of women, according to a study by Mary Mercer, a consultant at Sussex University’s employment institute. Men were less likely to apply, however, fearing it would reduce their chances of promotion because people tended to see flexible workers as less committed, she said.

“The problem isn’t flexible working but bosses who aren’t very good at managing performance and think the best staff are those who arrive first in the morning and leave late at night.” Hewlett agrees that the strongest barrier is the “permafrost” – that group of middle managers who make sure that flexible workers don’t get good performance ratings.

In Britain, as in America, firms have rushed to construct a portfolio of pick-and-mix policies on flexible working but few senior, ambitious workers have taken them up, she said.

She has seen evidence, however, over the past few months that far from abandoning their commitment to flexible working, some of the big institutions are moving to the next stage, such as Lehman Brothers, which, she said, within the next few weeks would be starting a huge programme of training to encourage managers to make flexible working even more of a reality.

A spokesman for the British arm of the investment bank – which is a sponsor of Hewlett’s Center for Work-Life Policy and a leading member of the task force – said: “We’re proud to have had flexible-working programmes since 1997, which were enhanced in 2004. This next step continues our established programme for providing the best possible working environment for all our staff.”

Hewlett believes that flexible working will be the silver lining to the downturn in company profits. And women will be the beneficiaries.

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