How Flexibility in the Workplace Impacts Employee Retention

While the Great Resignation may be over, employee retention and engagement is still a top priority for HR professionals and will likely remain a challenge for the foreseeable future. To prevent employee exits and sustain the Great Stay, employers should continue to focus on adding flexibility to their workplaces.

According to iHire’s 2024 Talent Retention Report, 40.8% of workers would accept a job elsewhere for a lower salary if they were offered more flexibility. Further, 20.8% of employees who quit jobs in 2024 did so because of a poor work/life balance, which can be linked to a lack of flexible work arrangements.

With these survey findings in mind, it’s clear that extending flexible scheduling to your employees – including remote work, hybrid work schedules, or a generous paid time off policy – can help boost retention.

What Is Workplace Flexibility?

Flexibility in the workplace varies from employer to employer. Ultimately, workplace flexibility means that your company defines “work” differently and has its own guidelines for how, when, and where employees do their jobs.

While most employers may immediately associate flexible work environments with remote work or telecommuting, other examples of workplace flexibility include:

• Hybrid work: Employees work from home part of the time and in the office the other part of the time.
• Part-time employment: Employees work less than 40 hours a week.
• Flex time: Employees are available within core hours during the day but may vary the times they arrive in the morning and leave in the afternoon.
• Compressed workweeks: Employees work at least 40 hours across fewer than five days; for example, four 10-hour days vs. five eight-hour days.
• Generous paid-time-off: Employers offer substantial PTO to help employees achieve greater work/life balance.
• Unlimited paid-time-off: Employers allow employees to take as much PTO as they need.
• Four-day workweeks: Associates work 32 hours a week but are still considered full-time employees.

What works for one organization may not work for your organization. Review your business structure to determine what kind of workplace flexibility is right for you and how you can implement it successfully at your company.

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What Types of Flexibility Do Employees Want?

Now that we know there are several different types of workplace flexibility, let’s look at which flexible arrangement employees actually want. When surveying workers for our 2024 Talent Retention Report, we asked respondents to identify the types of flexibility that would increase the likelihood of them staying with an employer.

The most popular response was flex time (54.7%) – for example, the ability to vary their workdays’ start and end times, or to take time off for personal matters when needed and “make up” that time later in the week.

Four-day workweeks – although controversial – were the second most popular response (44.4%), followed by hybrid work (41.5%).

What Are the Benefits of Flexibility in the Workplace?

What was once viewed as a “nice-to-have” workplace perk is now expected among prospective and current employees. During the pandemic, many employers allowed extreme workplace flexibility as employees tried to cope with the uncertainty of their new situation, which included working from home, helping their child(ren) with virtual schooling, and managing a blurred line between work and home life.

Jobs with flexible hours became commonplace, as did hybrid and remote work schedules. Flash forward to the present, and workplace flexibility is an expected benefit. It helps employees manage their stress levels and burnout, as well as fulfill outside obligations (e.g., caregiving) and gain autonomy over their work life.   

How Does Workplace Flexibility Affect Retention?

One of the biggest benefits of workplace flexibility is its direct impact on your employee turnover rates and retention.

When employees are given the flexibility to properly manage their non-work responsibilities, they tend to be less stressed, as well as more engaged, productive, and loyal to a company. In a tight labor market, building employee loyalty and boosting engagement can significantly set your company apart from competitors, enticing current employees to stay and attracting new employees too.

How to Add Flexibility Into Your Workplace

Implementing flexibility in the workplace can feel overwhelming, as changing your policies to accommodate flexible scheduling, alternative working arrangements, and hybrid or remote options is unfamiliar territory. Consider these steps when adding flexibility into your workplace.

1. Understand Employee Needs

Gather employee feedback to understand what types of flexibility they value most. Surveys, focus groups, or one-on-one meetings can help you identify their wants and needs. Use that feedback to prioritize which policy changes you will make.

2. Assess Your Business Operations

Consider your industry, team roles, and operational requirements. For example, customer-facing roles may require core business hours, while project-based roles might thrive with asynchronous schedules. Identifying what is feasible ensures your initiatives do not disrupt productivity or service quality.

3. Update Policies and Procedures

Develop clear policies that define how flexibility will be implemented and managed. Specify eligibility criteria, approval processes, and performance expectations. For instance, if adopting a hybrid work model, outline how often employees are expected to be in the office.

4. Leverage Technology

Invest in tools that support remote work, communication, and productivity, such as video conferencing platforms, project management software, and secure file-sharing systems. Make sure employees are trained to use these tools effectively.

5. Test New Flexibility Options

Before rolling out flexibility policies companywide, test them with a smaller group of employees. For instance, trial a hybrid schedule with select teams or departments to assess the impact on employee engagement, productivity, and morale. Use feedback to refine your approach before full implementation.

6. Empower and Support Managers

Train managers to lead flexible teams, set clear expectations, and focus on outcomes rather than micromanaging hours worked. Managerial support fosters trust and ensures success with flexibility.

7. Monitor and Adjust

Flexibility is not a one-size-fits-all solution, and employee needs may evolve over time. Continuously evaluate the effectiveness of your policies by tracking HR metrics like employee engagement, retention, and productivity. Stay open to feedback and be prepared to make adjustments as needed.

To discover more ways to make your workplace more flexible and improve retention, browse our Employer Resource Center.