Why flexible organisations will prosper (while others will flounder)

Written by: Elena Fedorchenko

Almost 4 decades before the pandemic forced businesses worldwide to pivot to a remote and flexible working model, the concept of flexible work began to lay its foundations in business discourse.  

The idea was designed to help organisations quickly adapt to fluctuating landscapes and unforeseen market disruptions. While there have been a few global market disruptions in the past 30-40 years, none have been more impactful than the pandemic. Thus, the concept of flexible work has been reignited to help organisations remain open and profitable in times of uncertainty.

So how has the flexible working model changed over the years, and what have we learned from our generation’s most dramatic disruption?

The history of the flexible working concept

In 1984, John Atkinson of the Institute of Manpower Studies first proposed a Flexible-Firm model designed to increase the fluidity of organisational structures in fluctuating markets and unpredictable and competitive business environments. The model suggests that flexible staffing arrangements enable businesses to be proactive rather than reactive in the face of change.

The model proposes the division of employees into 2 groups – core and peripheral. The core group consists of full-time employees who are integral to the functionality of the organisation. The peripheral group is made up of secondary workers with skills that can easily be found in the labour market and can be called upon to fulfil a fit-for-purpose position on short notice.

Many businesses have adopted the Flexible-Firm model since Atkinson first called for organisational flexibility, but none could have predicted how much of a competitive advantage it has given to early adopters in the face of the pandemic.

The other side of the flexible model

We saw that flexible organisations were far more adaptable to the sudden changes the pandemic introduced than ones that were not. However, prior to the COVID-19 outbreak, the flexible model came under debate among academics regarding its benefits.

It is worth noting that flexible working practices are not easily adapted to different types of jobs and industries. Research argues that flexible work is “an ambiguous concept: on the one hand, it is a prerequisite for short term, economic success and competitive advantages, while at the same time, flexible work might be criticised for its negative effects on workers and society”. 

The concept of flexibility in organisations has 2 dimensions: employment-type flexibility and work-type flexibility. So who are the winners of flexible working practices? Employers or employees?

What we’ve learned so far – short-term lessons

Pandemic restrictions forced many employers to adopt fully remote or hybrid working models. This had a positive impact in sectors with a predominance of intellectual labour, such as IT and digital. However, it had the opposite effect on the service and labour sectors, for example.  

According to the CIPD’s Flexible Working: Lessons from the Pandemic, flexible working formats for highly-skilled workers create an inclusion risk when lower-paid front-line workers are denied that opportunity. Flexible working initiatives are amplifying polarisation among workers which is exacerbating the negative social impact inherent in the hourglass economy.

Some argue that the positive impact of flexible working in the digital sector isn’t as clear-cut as it might first appear. Proponents of flexible working models say that despite the positives regarding eliminating lengthy commutes and improved work-life balance, it is accompanied by negative factors that might outweigh the positives. Social isolation, lack of physical team interaction, and increasing workloads can lead to mental well-being problems made worse by a sedentary lifestyle.

At this stage, the short-term perspective shows employers are the winners of flexible working initiatives as they can reduce overhead costs while enjoying higher team productivity and better staff retention.

What we can expect – a mid-term outlook

The remote working/flexible hours revolution has seemingly challenged the status quo regarding employment hierarchy. Workers across most industries are becoming more vocal about expectations and working conditions. Simply put, many people aren’t willing to accept what they used to.

For example, recent research has shown that the majority of teleworkers are not willing to come back to offices after the pandemic restrictions have been eased. 

HR professionals are increasingly worried about the growing level of employee individualism and insistence to transform traditional working relationships (peer-to-peer, manager-subordinates, workers-employer).

Flexible employment initiatives will open new models of cooperation (including gig work) and wider use of zero-hours contracts, self-employment, and temporary work. However, behind the freedom to choose a project or a temporary employer lies increasing labour insecurity and lower remuneration. Moreover, the main “investor” in the professional development will be an individual contractor, who will be interested in adding value to their skills in a highly competitive market. 

Flexible organisations – the future of work

The good thing is that flexible businesses are here to stay. Flexible working hours benefit employees greatly if managed correctly, and businesses win from having a happy and motivated workforce. 

Looking ahead, businesses will continue transforming their management methodologies and applying agile approaches that focus on outcomes rather than working hours. However, businesses must also consider that flexibility regarding types of employment can bring potential risks that are associated with loss of continuity and legacy knowledge within the organisation.

The future will no doubt involve an increase in non-traditional career paths and growing numbers of gig platforms that value skills ratings for gig workers. 

Currently, flexible employees struggle to get access to credit and housing as the sector is still in its infancy. Soon, financial and government institutions will recognise this shift to a gig economy and we anticipate more security given to flexible workers.

Weighing in

For now, the long-term outlook will likely see a realised model of Atkinson’s Flexible-Firm model, but with some modifications. We will potentially see core teams having complete flexibility in work while the peripheral teams will have more flexibility in employment. Keeping and developing a core team will prevent knowledge and capacity loss, however, it will likely further polarise the workforce. 

Thus, HR specialists will be met with new challenges regarding the development and regulatory framework of policies and procedures responses to ensure decent work for gig workers.

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Last modified: November 28, 2022
Author info
Elena Fedorchenko
Olena is an HR enthusiast and magician, who has a big love for people and keeps business goals in her mind. Care, support and inspiration are her magic tools that help to keep this hard "human and resource/capital" balance.
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