Published at: Heliyon

Abstract: 
The increasing practice of flexible work impacts the way in which firms manage and retain workforce. This paper presents two bi-level mathematical models to assist firms retain their workforce more effectively. The models aim to achieve this goal by including both flexibility and appealing benefit packages in the work plans. The models consist of two levels: 1] firms' goal to maximize profit, 2] employees' goal to minimize the difference between desired salary and the total benefits offered by the work plan. Model I assume that the firm offers salaries for each work plan and job type, whereas Model II allows for a fully flexible salary determination. The models provide an exact solution on the basis of a mixed integer formulation. We present an experimental analysis based on three experiments. Results indicate that in certain situations, Model II leads to significantly higher firm profit compared to Model I. However, when the flexibility of the benefit packages offered by market work plans and firms' work plans are similar, the difference in profit between the two models is minimal. These results highlight the relevance of optimal solutions to real-world challenges. This study makes three important contributions. First, from a methodological perspective, it introduces a novel bi-level modeling approach that can proactively enhance employee retention, thereby decreasing turnover. Second, from a practical perspective, it presents solutions to new workforce challenges by providing a decision support tool that can optimize employee retention, which takes the form of customizable and flexible work plans and salaries that aim to meet employee needs while maximizing the company's profit. Third, the study highlights the importance of incorporating managerial insight into the model's parameters and utilize them as an important decision support tool via experimental analysis in order to optimize firm profit.

By Iris Forma 4/1/2026

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