Flexible working arrangements and strategic positions in SMEs

Under the Australian Fair Work Act 2009, employees can request flexible working arrangements (FWAs) from their employers. Provision of FWAs is costly to small and medium enterprises (SMEs). They can, however, use FWAs to achieve competitive advantage. The purpose of this paper is to investigate strategic positions associated with FWA availability in SMEs. It also examines the effects of size and industry sector on FWA availability in SMEs.

With a sample of 1,541 cases comprising micro, small and medium firms from the Australian Bureau of Statistics’ Business Longitudinal Database, binary regression models were used to analyse the relationships between FWAs and the independent variables: strategic position, firm-size and industry of operation.

Flexible working hours, flexible leave arrangements and roster/shift selection were used by SMEs pursuing a strategy focussed on human resources. In contrast, a strategic focus on cost correlated negatively with paid parental leave and flexible rosters/shifts. SMEs pursuing innovation were unlikely to provide flexible leave while job sharing was less visible in SMEs focussing on quality. An industry effect was evident with working from home unlikely for firms in industry sectors where employees had to be present at work. Micro- and small-sized firms were less likely than medium firms to provide FWA to their employees.

SMEs with competitive positions based on human capital could use FWAs to attract the required skills. Employees in SMEs that compete on cost may benefit from FWAs in the form of temporary and casual positions.