Workplace Flexibility Practices in SMEs: Relationship with Performance via Redundancies, Absenteeism, and Financial Turnover

This workplace flexibility study uses primary data on private sector small and medium‐sized enterprises () in ancashire, nited ingdom, collected in 2009 during the recent “credit crunch” recession. Key features include: (1) objective measures of performance; (2) a focus on the previously relatively neglected relationship between workplace flexibility practices () and three performance indicators, namely, redundancies, absenteeism, and financial turnover; and (3) a timely contribution to research on . Numerical, functional, and cost analyses, via zero‐inflated oisson and linear regressions, control for and market characteristics. Despite having limited resources, the results show a significant section of to be innovative and entrepreneurial organizations, embracing advancements in employment relations regarding employee discretion, training, participative working arrangements, and/or job security. Moreover, results indicate that have the potential to assist in responding to periods of constrained demand. Flexitime and job sharing are associated with low permanent‐employee redundancies. Training, job security, and family‐friendly practices relate to low absenteeism with reductions of up to six annual days per worker. Job security and profit‐related pay are associated with high financial turnover. Staff pay‐freeze links with high financial turnover, but to the detriment of redundancies and absenteeism, whereas management pay‐cuts or management pay‐freeze relate to low financial turnover. On a cautionary note, spending cuts, often enforced by policymakers, may be of limited benefit to , and thus other approaches would appear more fruitful.