📄 Abstract
Deliberate staffing slack — paid professional time that an employer designates as uncommitted rather than scheduled against delivery work — is one of the few human resource variables that is simultaneously a cost line and an innovation input. Artificial intelligence sharpens the conflict: it raises the marginal value of a committed hour and, for the first time, gives workforce planners the instrumentation to reclaim every uncommitted minute. This paper asks what the elasticity of innovation output with respect to deliberate staffing slack actually is, and whether the lean AI-optimised operating model now spreading across knowledge-intensive sectors is economically defensible. An analytical model is developed in which paid professional time splits between a delivery block whose productivity is AI-augmented and an innovation block in which slack must first clear a contiguity filter and then survive a governance dissipation term. The model yields a closed-form innovation peak, an elasticity function, and an elasticity rule characterising the profit-maximising slack ratio. A Monte Carlo experiment over 40,000 parameter draws calibrated to published estimates returns a median profit-maximising slack ratio of 8.9 per cent of paid professional time against an innovation-maximising ratio of 18.5 per cent, and an elasticity that peaks near 0.49 at a five per cent slack ratio before falling to 0.27 by ten per cent. A lean five per cent utilisation target under AI-augmented technology retains 99 per cent of the private value of the re-optimised policy while delivering only 87 per cent of its innovation output: the value curve is flat exactly where the innovation curve is steep, which is why the innovation loss is easy to miss and easy to authorise. In roughly one configuration in eight, no deliberate slack at all is privately optimal — slack is a lumpy commitment, not a marginal one. Once the spillover premium documented for R&D is admitted, the socially optimal slack ratio rises to between ten and fourteen per cent, so that about one per cent of firm value buys roughly eight per cent more innovation output at the margin.
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📚 How to Cite:
N. Subbu Krishna Sastry, Dr. Manjula Mallya M , ORGANISATIONAL SLACK IN WORKFORCE DESIGN AND INNOVATION OUTPUT ELASTICITY , Volume 13 , Issue 8, August 2026, EPRA International Journal of Economics, Business and Management Studies (EBMS) , Pages: 358 - 375 ,