The problem of employee turnover has been investigated in recent years because more and more countries and organizations are faced with the lack of an adequate labor force ^[1][2][3][1,2,3]. The most important managerial task related to human resource management (HRM) is the attraction of qualified human resources and the struggle for retention of talent. Employee turnover is one of the biggest challenges for all organizations. It may cause different economic, psychological, and organizational consequences [3] (p. 32), such as the loss of human capital and the loss of institutional knowledge [2] (p. 1467).

Numerous challenging factors influence the business environment and labor market; however, the most important are the presence of the new generation of employees (Y and Z generations) on the labor market, who have different views and ideas about jobs, careers, and authority; contemporary political, social, and economic challenges; the COVID-19 pandemic; and especially rapid technological development. In such conditions, many organizations struggle to maintain their competitiveness. In addition, several organizational factors like managerial style, organizational culture, HR practices (staffing, compensation, training, career development, etc.), job satisfaction, and stress and conflict management influence the organizational ability to be an attractive employer and to retain employees. Companies need to create working conditions that will attract, motivate, and retain employees.

According to previous studies, one possible response to many challenges in HRM is the implementation of flexible working arrangements (FWAs) as a new and more flexible way of organizing traditional jobs and working positions; this allows employees to have more possibilities to maintain work–life balance and to choose how and when they perform business activities ^[4][5][4,5]. FWAs can be defined as a “work option that provides a control for employees in terms of ‘where’ and/or ‘when’ to perform their job tasks” [4] (p. 3). This level of control over job tasks means greater perceived autonomy of an employee, which could lead to a greater possibility for balancing work and private life and to the preservation of time and energy of an employee [6]. This is one of the most important benefits of FWAs.

Previous research pointed to the conclusion that FWAs are seen as HRM practices that comprise greater productivity, organizational commitment, job satisfaction, lower absenteeism, lower turnover intentions, etc. ^[5][6][5,6]. On the other hand, some of the limitations of FWAs lie in the fact that not all types of FWAs would have such effects in organizations. Potential costs for employees could be related to increased stress if the workload is in excess of the reduced work time or when employees are required to attend to work issues on their days off [5] (p. 734). This could harm employee performance and diminish FWAs’ positive effects.

The above-mentioned relations are derived from the social exchange theory, which states that positive and benevolent behavior of one person (sender) to another (receiver) in an interdependent relationship would create the potential for the receiver to feel obligated to reciprocate with returned positive behavior [4]. It is important to emphasize that this relation or exchange in the employment context is not a contract; it is more about the beliefs and perceptions of both sides, that is, employees and employers. Namely, if employees perceive the work environment and other HRM practices of employers as positive and satisfactory, they could feel obligated to show positive work attitudes and behaviors. On the contrary, if employees perceive HRM practices as not satisfactory, they will show negative organizational behavior and attitudes. Based on the social exchange theory and previous research, it is expected that FWAs would have positive effects on turnover intentions, as a type of employee behavior, in terms of decreasing turnover ^[4][5][6][7][4,5,6,7]. In addition, FWAs are seen as a driver of higher job satisfaction [8], one of the most important employee attitudes related to the willingness to stay or to leave the organization [5]. 

2. Theoretical Background

Flexible working arrangements have gained great attention recently due to the great negative impact of the COVID-19 pandemic all over the world. FWAs are seen as a solution for many business issues, but are mainly related to work–life balance. FWAs could increase work control, and are defined as constructs that possess two major forms of flexibility, related to time (flex-time) and related to location (flexplace) [9]. FWAs are generally seen as a “negotiated term of employment related to timing and/or place of work” [10]. FWAs are also explained as “employer-provided benefits that permit employees some level of control over when and where they work outside of the standard workday” ^[11][12][11,12] and are usually related to home-based working, flex-time, reducing or extending contract hours, or allowing overtime hours to support employees’ work–life balance and improve firm performance [13] (p. 727). Flexibility in work has a great effect on employees and employers. Employees are more ready to “join an organization, be satisfied with the jobs they do and continue working with the same employers. Employers have become aware of some outcomes, such as being interested, motivated, and retaining their talented employees, having satisfied and numerous engaged employees, along with improving employee effectiveness and success” [14]. Previous research investigated the effects of FWAs on employees’ behavior and attitudes, such as turnover ^[12][15][12,15], engagement [16], job satisfaction [17], absenteeism [18], etc. In most of these areas, FWAs showed a positive relation to the dependent variables, in terms of increasing job satisfaction, engagement, or performance, while decreasing absenteeism and turnover. For this research, bearing in mind that more and more companies are struggling to retain their best employees, the authors decided to investigate relations between FWAs, job satisfaction, and turnover intentions of employees. The mentioned constructs are important outcomes of organizational behavior strategies; organizational human resource management practices influence organizations such that the outcomes can be measured by employee performance, job satisfaction, absenteeism, and turnover [19]. Regarding turnover, the best way to investigate the turnover of employees is to follow their turnover intentions, as a reliable predictor of actual turnover behavior [2]. Sandhya and Sulphey stated that turnover intentions can be defined as “a mental decision prevailing between an individual’s approach with reference to work to continue or leave the work”; it is “a measure for understanding turnover before employees actually quit or leave organizations” [1] (p. 327). FWAs, in terms of gaining more control over the job and the usage of different work types, like teleworking, flex-time, home-based work, etc., should decrease the turnover intentions of employees. This idea is derived from social exchange theory, explain ed in the previous section of the paper, in which positive employer practices towards their employees should cause positive work behavior (i.e., decision to stay, reduction of turnover intentions, and turnover itself) and work attitudes (commitment, engagement, job satisfaction, etc.). In most of the previous research, this hypothesis has been proven [20], but the question is what is happening now, during the COVID-19 pandemic, when more companies are using FWAs [21] and when different external factors are moving organizations towards greater usage of FWAs. FWAs like flex-time (which allows employees to vary the times when they start and finish work), sabbaticals (paid leave from work), and home-based work (work from a location outside workplace, in a household) increased job satisfaction, while sabbaticals and home-based work decreased turnover intention of employees in a sample of German employees [20]. In addition, Tsen et al. [4] investigated 16,920 respondents from 35 countries and found that perceived job independence significantly moderates the relationship between FWAs and turnover intention. They found that employees who perceive their jobs as highly independent have a lower turnover intention when they are using FWAs such as flex-time, flex-leave, or home-based work, while more interdependent employees who use home-based work and flex-time may have a greater intention to leave [4] (p. 1). In a similar study, the authors found that flexible work hours had no significant effect on job satisfaction, but they reduced staff turnover. In contrast, job satisfaction improved with job sharing and flexible leave [5]. Masuda et al. [22] investigated the relationship between FWAs and job satisfaction, turnover intentions, and work–family conflict in Latin American, Anglo, and Asian country clusters in a sample of 3918 managers from 15 countries. The results showed that there is a negative relationship between flex-time work and turnover intentions in the Anglo cluster and that the relationship is not significant for the Latin American cluster. In addition, a positive relationship was found between flex-time availability and job satisfaction for the Anglo cluster, but not in the Latin American cluster. De Sivatte and Guadamillas [23] also investigated similar relations in a sample of 480 employees in Spain and noted that FWAs have a negative relation to turnover intentions (these practices reduce the intention of employees to leave the organization) and a positive relation to employees’ commitment. Mullins et al. [24] found that FWAs are associated with lower dissatisfaction of employees, but with small effects on employee intention to leave the organization.