Flexible Work Arrangements in Central and Eastern Europe: Effects on Organizational Outcomes

Flexible work arrangements (FWAs) have attracted growing attention in recent years for their ability to help employees better balance personal and professional responsibilities. By catering to diverse needs, such as caregiving, education, and mental health, FWAs foster inclusivity and employee satisfaction. Previous research has shown that organizations that embrace flexibility often experience stronger organizational performance, including profitability, productivity, and even innovation. Additionally, flexible work policies can reduce employee turnover and absenteeism, ensuring a more stable and productive workforce. Despite their importance, studies examining FWAs in Central and Eastern European (CEE) countries remain limited. The main aim of this paper is to investigate how flexible working arrangements cluster into distinct bundles in CEE countries and how these bundles relate to organizational outcomes, based on Cranet survey data from organizations in ten CEE countries. The authors used principal component analysis (PCA) to extract bundles of FWAs and hierarchical linear modelling (HLM) to identify the relationships between these bundles and organizational level profitability, innovation, employee turnover, and absenteeism, across 1073 organizations in ten countries. Three distinct bundles of FWAs were identified from eight individual FWAs across the sample. Bundle 1 represents flexitime and remote work; Bundle 2 represents shift work and weekend work; and Bundle 3 represents part-time, temporary, and contract work. The results show that Bundle 1 and Bundle 3 are significantly associated with innovation, employee turnover, and absenteeism in organizations in CEE. Bundle 2 is not related to any of the dependent variables (organizational or human resource) outcomes. Furthermore, none of the identified FWA bundles were found to be related to profitability. The paper offers novel insights into the implementation of FWAs in CEE countries.