Labor flexibility is a new cost-based approach for human resource management, and it can be employed by enterprises to reduce the limitations of the workforce and to increase the diversity of labor supply. Instead of adopting traditional approaches, modern enterprises use this method to respond to the labor market shifts. This method incorporates the cost considerations and the management strategy of human resources to enhance labor diversity. This research examines how labor flexibility impacts business operation. The research findings show labor flexibility can enhance enterprises' operational performance, increase the supply and the dynamics in the labor market, and further encourage socio-economic development and prosperity.