Pre†Exit Bundling, Turnover of Professionals, and Firm Performance

Context†emergent turnover theory (CETT) focuses on the contextual factors that influence the turnover†firm performance relationship, yet to date, has not investigated how particular firms weather the detrimental effects of loss more effectively than others. We build on the CETT literature by theorizing that different human resource bundling strategies are central contextual factors that impact the effects of human resource exit. Specifically, we argue that bundling human resources prior to exit in greater concentrations deflects some harmful effects of turnover. Pre†exit bundling ensures that remaining professionals post†exit retain both the capacity necessary to meet job demands and the critical tacit knowledge of firm routines that maintain effectiveness. Our study examines the loss of professionals in a panel of the largest U.S.†based law firms. We find general support for our theory. Results show that losing professionals when the pre†exit bundling had produced greater service†, hiring†, and geographic†concentration lessens the negative effects of loss.