Labor flexibility and firm performance

The aim of this paper is to add to the labor flexibility debate by exploring the relationship between different forms of flexible working practices and the performance of the firm. Although there is a strong argument that labor flexibility can lead to greater financial success through the reduction in labor costs and the ability to use labor resources more efficiently, little empirical evidence has been provided to demonstrate the existence of such a relationship. This paper reviews the existing literature, puts forward a number of research propositions, and tests them by using data drawn from the Cranet-E International Survey of Strategic Human Resource Management. Only one form of numerical flexibility is found to have a positive relationship with firm performance. Proposals for further research are suggested.