The Dynamics of Labour Flexibility: Relationships between Employment Type and Innovativeness

Abstract

This paper investigates the relationship between flexible human resource (HR) practices and innovativeness. Testing the research model in a sample of first-tier automotive suppliers indicates that internal flexibility practices are positively related to innovativeness. Regarding external flexibility, the association depends on the type of contingent employee: negative association for ‘short-term hires’ and positive association for ‘consulting/contracting firms’. The relationships to innovativeness for practices associated with knowledge transfer are moderated by environmental dynamism, but the non-knowledge related practices are not. Firms in highly dynamic environments can benefit more from flexible HR practices than firms in less dynamic environments.