Using data from 170 for‐profit U.S. firms with 100 or more employees from 27 North American Industry Classification System (NAICS) industry subsectors, we investigated firm‐level precursors of HR flexibility and industry‐level boundary conditions of the HR flexibility—firm financial performance relationship. The findings denote that a contingency illumination is warranted in which consideration should be given to firm‐level factors such as flexibility business strategy and high‐performance work systems, which may play a key role in engendering HR flexibility, and external factors such as industry dynamism and growth, which may serve as boundary conditions that influence the relevance and impact of HR flexibility. This study is an important extension of extant HR flexibility research and adds clarity regarding the roles and relevance of HR flexibility and the circumstances in which HR flexibility and/or its focal factors may augment (or diminish) firm competitiveness and performance.

Wright and Snell (1998) contend that HR flexibility is an important construct that may enable managers and management scholars to gain a greater understanding of the role of human resource management in enhancing firm performance. However, there is limited evidence regarding the psychometric properties of the measures that have been used to assess the HR flexibility construct and examine its effects. A primary objective of this study was to develop and validate a psychometrically sound measure of the HR flexibility construct. In this article, we present evidence of content validity/adequacy, internal consistency reliability, convergent validity, discriminant validity, and criterion-related validity that provides support for the use of this study’s multidimensional HR flexibility measure in subsequent empirical inquiries and theory testing efforts. Implications and limitations of this current research as well as avenues for future research are discussed.