The economic valuation of flexible work arrangements: how to convert non-pecuniary benefits into monetary value for the employee

Purpose This applied proposal aims to create a mechanism applicable to any company where the exact economic value of flexible work arrangements can be measured – that is, translating nonpecuniary benefits into something monetary which can be added to the financial salary. Design/methodology/approach This is a how-to method approach that helps companies to convert nonpecuniary benefits of flexible work arrangements into monetary terms. Findings Initially, the authors discover a way to translate the nonpecuniary benefits of flexible work arrangements into monetary rewards. Theoretically, these monetary rewards are symbolic, but in many cases they are not, due to the fact that free time for the employee could also eliminate needs of hiring third parties. In the practical example provided, we can see how flexible work arrangements can trigger higher pecuniary benefits. Research limitations/implications Further research will be needed to determine behavior in different industries, positions, etc. Practical implications A practical tool for managers to use when hiring and retaining talent. The vision of two forms of salary (financial salary + pecuniary benefits of the flexible work arrangements) allows employees to better realize the corporate efforts in work flexibility. Social implications What you cannot measure, you cannot control. The business community can benefit from measuring the flexible work arrangements using a system that adapts itself to the personal needs of each employee. This system tackles the hypercomplexity of the real value of the free time of people. It is a way to put down in a number the corporate efforts in work flexibility. Originality/value This practical approach helps HR managers to guide other departmental managers in designing flexible work initiatives. Actually, the benefits of these initiatives and efforts in flexibility are predominantly qualitative and not easy to measure. The proposed method translates and converts qualitative assumptions based on sometimes confusing adverbs (good, bad, effective, inefficient, etc.) into real numbers, which can be measured and controlled.