An organizational model and workplace technique utilizing the flexibility of human resources to maximize production.
Flexible Firm Details
Flexible firms are meant to do just that: work flexibly. To adapt to a diverse and ever-changing marketplace, this living and breathing workplace model allows companies of all sizes to grow and contract in conjunction with their respective industry.
In 1986, Jon Atkinson of the UK Institute of Manpower Studies found that the most effective workplace consists of companies capable of maneuvering fast-paced markets and adjusting manpower accordingly.
K.C. Bruning from Wisegeek states that the flexible firm model "tends to be focused on employees with specialized skill sets who are difficult to replace." Flexible firms often identify their employees as core and peripheral, or secondary. Core employees encompass the inner workings of an organization, the beating heart of a body. Secondary employees are the appendages to that body. Not to say that limbs aren't important, but the body can survive without.
Example of Flexible Firms
While adapting to the marketplace is vital for any company, constantly growing and shrinking labor requires mounting expenses and human resources to gather the human resources needed. Changes in the marketplace directly correlate to manpower, and a thorough operational strategy is needed to mitigate the costs associated with restaffing, retraining, and rehiring.
For example, the commercial construction industry is a dynamic, fast-moving, evolving system that heavily relies upon the economic principle of supply and demand. If there is a demand for new facilities, restaurants, infrastructure, or entertainment, supply seems to generate as if it were from thin air. Finances and managerial staff are gathered by core employees, while building materials and manpower are deferred to secondary employees.
During this time of demand, interns and subcontractors are supplied. The summer months in rural midwestern Idaho produce the most results after the ground thaws, and weather permits excavation and foundation work to proceed with little interruption. Recruiting for the busiest season, you run the calculated risk of outsourcing employees to satisfy the marketplace demand. Employers must be ready to adapt to a volatile market and present a competitive edge within the flexible firm model.
Significance of Flexible Firm
Flexible firms are malleable in their employment structure and the workload itself. The US Bureau of Labor Statistics reports that 27.5% of all full-time workers in 2005 had flexible schedules. While deadlines and commitments continue to exist, a level of trust co-exists between employer and employee to accomplish the work on time and budget. Ursula Mead, founder and CEO of InHerSight, stated that "when you stop clocking employees' actual work time, you reinforce the fact that you trust them to do what they were hired to do." Employers run the risk of employees taking advantage of the system. However, a flexible schedule allows employees to enjoy a higher quality of life, resulting in a higher satisfaction that produces a higher quality of production.
While only 5% of the world's companies using the flexible firm model, those that do report 25% more productivity than their competitors. By allowing employees, core or secondary, to utilize the time available to them, employers allow their staff to breathe and expand, to pump the lifeblood from the organization's core to the other appendages of the company body.
Work-related stress causes insomnia, and insomnia causes stress until employees are caught in an endless loop of chaos and self-destruction. In an article, Ronald Kessler of Harvard Medical School stated that insomnia costs 252.7 days and $63.2 billion in lost productivity every year. Rather than previous generations adapting to standardized conventions of 9 to 5 routines, 2020's COVID-19 pandemic strong-armed traditional office workplaces to become a flexible firm, expanding and contracting with the marketplace and its workload.