Atkinson’s flexible firm model: explained with workplace examples

Atkinson’s Flexible Firm Model explains how an organisation can combine a stable workforce with different staffing arrangements to respond to changing demand. Its central distinction is between a core workforce, which provides continuity and adaptable skills, and peripheral groups, which provide additional capacity or specialist services.

Developed by John Atkinson in the 1980s, the model remains useful for studying workforce planning. However, it is an analytical framework, not proof that temporary employment is cheaper, better or appropriate for every organisation.

Used thoughtfully, it helps managers ask where they need continuity, where demand genuinely varies and how they can develop people’s skills. Used uncritically, it can encourage a two-tier workforce in which some people carry disproportionate insecurity.

How atkinson’s flexible firm model works

The model describes an organisation with different workforce groups arranged around a stable centre. Those groups contribute different forms of flexibility.

The labels describe an employment structure, not a person’s worth, skill or commitment. In particular, part-time does not mean peripheral, and temporary workers are not necessarily less skilled than permanent employees.

The core workforce

The core usually consists of employees with relatively secure employment, organisation-specific knowledge and opportunities for development. They provide continuity while adapting to changing tasks through broader skills, teamwork and redeployment.

For example, a college might develop permanent curriculum staff to teach across related programmes, support assessment and contribute to quality improvement. That flexibility depends on training, professional competence and manageable workloads, not simply asking fewer people to do more.

Core roles can be part-time. A permanent finance manager working three days a week may hold knowledge that is essential to the organisation’s long-term operation.

The peripheral workforce

A fuller account distinguishes between different peripheral groups rather than putting everyone outside the core into one category.

• The first peripheral group typically includes employees in jobs involving less organisation-specific training and with fewer opportunities to move into the core. They may have full-time, ongoing employment, with staffing levels adjusted through recruitment and turnover.
• The second peripheral group includes arrangements such as temporary, short-term or variable-hours work, used to respond more directly to fluctuations in demand.

These are features of the historical model, not recommendations for restricting development. An employer should question whether apparently peripheral roles actually involve essential knowledge or recurring work that warrants greater stability.

External provision

Diagrams often also show contractors, agencies and outsourced services beyond the directly employed workforce. Some explanations call this distancing: obtaining a service externally rather than employing people to deliver it internally.

An IT consultancy providing a specialist security review is different from an agency supplying temporary administrative cover. Both sit outside the permanent workforce, but their management arrangements, costs and legal responsibilities differ.

The rings should therefore prompt questions about how work is organised, not become permanent labels attached to individuals.

The main types of flexibility

Understanding the model requires more than identifying contract types. Atkinson’s framework is commonly associated with three forms of flexibility.

Functional flexibility

Functional flexibility means employees can undertake different tasks or move between activities as needs change. It is particularly associated with the core workforce.

Examples include cross-training customer service staff or supporting assessors to work across appropriate qualifications. Successful implementation requires competence, recognition and clear boundaries. It must not override professional registration, safeguarding requirements or assessment standards.

Numerical flexibility

Numerical flexibility means adjusting the amount of labour available, through changes in headcount or working hours.

Seasonal recruitment, temporary cover and agreed changes to hours can provide this flexibility. However, predictable annual demand is not the same as unforeseeable demand. Employers should consider whether recurring work could support permanent employment, including stable part-time or annualised-hours arrangements.

Financial flexibility

Financial flexibility concerns variation in pay arrangements, including how remuneration relates to skills, performance or labour-market conditions.

It does not mean employers can disregard minimum pay, equal pay or contractual obligations. Poorly designed incentives can also undermine collaboration or reward visible activity rather than valuable work.

Modern discussions often add location and scheduling flexibility. These are useful concepts, but hybrid working should not be confused with Atkinson’s core-periphery structure: a home-based employee may be central to the organisation.

Potential benefits and limitations

The model can help organisations distinguish between enduring capability, short-term capacity and specialist expertise.

Potential benefits include:

• Better capacity planning: matching staffing to genuine seasonal or project-based demand.
• Access to expertise: bringing in a specialist when a particular skill is needed for a defined task.
• Greater internal adaptability: developing employees so that work does not depend on one person.
• Clearer continuity planning: identifying knowledge and relationships that should be retained internally.

None of these outcomes follows automatically from using temporary contracts. Contractors may charge higher rates, agencies add fees, and repeated recruitment creates induction and supervision costs. Outsourcing can also make an organisation dependent on a supplier.

The relevant comparison is the whole cost and quality of delivering the work, including errors, turnover, management time and loss of knowledge. Lower apparent staffing costs can conceal poorer service or costs shifted onto workers through unpredictable earnings.

Realistic examples in UK workplaces

The following examples illustrate how the framework could inform decisions. They are not claims that particular employers have formally adopted Atkinson’s model.

Retail: preparing for a christmas peak

A retailer retains permanent supervisors, stock specialists and customer service staff, then recruits temporary colleagues for increased Christmas demand.

This resembles numerical flexibility. Functional flexibility might also come from training existing staff to work across stock replenishment and customer collections.

Responsible implementation would include paid induction, clear contract dates, reasonable notice of shifts and access to relevant safety training. Temporary staff still need support when dealing with difficult customers or unfamiliar systems.

The retailer should also review recurring patterns. If supposedly seasonal hours are needed throughout the year, more stable contracts may improve both retention and service.

Further education: launching a specialist short course

An FE college plans a short employer-funded programme in a technical subject. Its permanent team manages curriculum quality, learner support and delivery coordination, while a practising industry specialist contributes defined teaching sessions.

The arrangement can bring current professional expertise into the classroom without assuming there is enough demand for a full-time specialist post.

However, subject knowledge alone does not guarantee teaching competence. The college needs appropriate checks, induction, support with assessment and clarity about preparation, marking and payment. Relevant safeguarding requirements apply regardless of how briefly someone contributes.

If the programme becomes established, the college should review whether ongoing employment and internal capability development would provide better continuity for learners.

IT consulting: using a specialist contractor

A consultancy brings in a contractor for a time-limited cloud migration while its permanent team retains client relationships and service knowledge.

This provides access to specialist expertise, but the project needs documented decisions, secure access controls and a planned handover. Otherwise, critical knowledge may disappear when the engagement ends.

Contractor status and any applicable tax obligations require separate assessment. Calling someone external or peripheral does not determine their legal position.

Employment quality and equality must shape the decision

The model’s greatest risk is that organisational flexibility becomes insecurity for individuals. Uncertain hours, repeated short contracts and exclusion from development can make it difficult to plan income, caring responsibilities or career progression.

Employment protections cannot be inferred from a diagram. Rights depend on the actual relationship, employment status and applicable law.

For example, GOV.UK explains protections against less favourable treatment for part-time workers and fixed-term employees, subject to the relevant rules and exceptions. Different arrangements also have different legal tests, so managers should seek appropriate advice rather than assume that everyone outside the core has fewer rights. Check jurisdiction-specific guidance, particularly for Northern Ireland.

An equality review should ask:

• Who receives secure hours, development opportunities and progression?
• Are part-time colleagues overlooked because meetings or training take place outside their working patterns?
• Are people with caring responsibilities or disabled workers disproportionately placed in less secure roles?
• Are recruitment and promotion decisions based on job requirements rather than assumptions about availability?

Equal access does not always mean identical arrangements. Accessible learning, reasonable adjustments and alternative meeting times may be necessary for meaningful participation.

What hybrid working changes

Atkinson’s model is not a guide to deciding who should work from home. Contract security, working hours and workplace location are separate dimensions.

A permanent remote employee can be part of the core workforce. An on-site contractor can hold highly specialised expertise. Physical presence is not a reliable measure of contribution or commitment.

Hybrid working nevertheless creates a modern risk: an informal core of people who are seen regularly in the office, with everyone else excluded from information and opportunities. This can undermine development and progression even when contracts are identical.

Managers should document decisions, make meetings accessible and allocate work using explicit criteria. They should also check whether remote colleagues and those working different hours receive comparable feedback and sponsorship.

Acas guidance on home and hybrid working policies provides a practical starting point for agreeing arrangements. Location flexibility should support effective work, not become an expectation of constant availability.

How to apply the model responsibly

Start with the work rather than deciding how many people should be labelled core or peripheral. CIPD’s workforce planning guidance offers a broader approach to connecting people requirements with organisational needs.

A practical review can follow five steps:

1. Map demand. Separate enduring workloads, predictable peaks, absence cover and genuinely uncertain projects. Use evidence rather than habit.
2. Identify critical capability. Establish where relationships, safety, learner continuity or institutional knowledge make retention especially important.
3. Compare options. Consider training, job redesign, stable part-time roles and improved scheduling alongside temporary recruitment or outsourcing.
4. Build in fair treatment. Plan induction, supervision, appropriate learning access, clear terms and routes for raising concerns across the workforce.
5. Review outcomes. Monitor service quality, total costs, turnover, workload, worker feedback and access to progression. Change arrangements that create avoidable harm.

Involve employees and recognised trade unions or other representatives where appropriate. People doing the work often understand dependencies and demand patterns that a staffing spreadsheet misses.

Summary and next step

Atkinson’s Flexible Firm Model helps explain how organisations combine continuity, adaptable skills and variable staffing capacity. Its value lies in making workforce choices visible, not in endorsing insecure employment or treating some people as expendable.

For a useful next step, review one team or service. Identify its lasting work, genuine demand fluctuations and critical knowledge, then assess whether current arrangements provide both organisational resilience and decent work.

Sources and further reading

These sources support the practical and employment considerations above. They are not Atkinson’s original publication, and modern legal rights should not be read back into the historical model.

• CIPD: Workforce planning explains how to connect workforce requirements with organisational planning.
• GOV.UK: Part-time workers’ rights outlines protections and examples of less favourable treatment.
• GOV.UK: Fixed-term employment contracts covers employer responsibilities and fixed-term employees’ rights.
• Acas: Policies for home and hybrid working supports the development of clear working arrangements.