This presentation concentrates the role of labor flexibility in the pursuit of innovation strategies. The resource-based view (RBV) of the firm has both recognized the importance of flexible employment and of the internally-trained labor with regular contracts. While the former cohort is more likely to be downsized during economic crises, the latter contributes to firm’s long-term competitive advantage via the acquisition of nontransferable skills. This research aims to answer the question about the role of HR practices in corporate innovation. Specifically, the issue in focus is numerical labor flexibility that “reflects the ability of firms to use the external labor market to replace regular employees and/or to use temporary employees” (Kato & Zhou, 2018).