Willingness and ability of the company to make necessary changes in terms of the number of employees they hire and hours worked by them. It is an essential aspect to keep up with the market conditions and to achieve macroeconomic objectives. A flexible firm can work with minimal regulations regarding the labor market, can set wages such as minimum wage, fire employees at willpower, and change their work schedules. A company with low flexibility is bounded with minimum wage restrictions and requirements from trade unions.