The Dark Side of Wars for Talent and Layoffs: Evidence from Korean Firms †

Hee-jung Cho and Ji-Young Ahn
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Hee-jung Cho: Ewha Womans University and HR Team, Samsung Engineering, Samsung GEC, 26 Sangil-ro 6-gil, Gandong-gu, Seoul 05282, Korea
Ji-Young Ahn: Ewha School of Business, Ewha Womans University, 52 Ewhayeodae-gil, Seodaemun-gu, Seoul 03760, Korea

Sustainability, 2018, vol. 10, issue 5, 1-18

Abstract: In this study, we examined the effects of layoffs and wars for talent on firms’ performance. The simultaneous use of layoffs and “war-for-talent” practices has become part of the management strategy for adjusting workforce competencies. We suggest that war-for-talent practices decrease organizational performance when laying people off at the same time. Moreover, we argue that investment in employees’ skill development during the same period as layoffs and a war for talent can enhance organizational sustainability in increasing employee commitment, trust and organizational flexibility. Using a longitudinal survey conducted at over 653 Korean firms by a government-sponsored research institution, the results show that war-for-talent practices do not have a significant impact on firms’ performance. Moreover, our findings indicate a negative relationship between war-for-talent practices and financial performance when conducting layoffs and, as expected, a positive effect of the interaction between a war for talent and layoffs on turnover. Lastly, the results indicate a negative effect on organizational performance in firms pursuing a war for talent is mitigated when investments in employee development are continued during periods of layoffs.

Keywords: war for talent; layoffs; employee development; human resources; firm performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
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