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

Author

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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)

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.

Suggested Citation

  • Hee-jung Cho & Ji-Young Ahn, 2018. "The Dark Side of Wars for Talent and Layoffs: Evidence from Korean Firms †," Sustainability, MDPI, vol. 10(5), pages 1-18, April.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1365-:d:143591
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    References listed on IDEAS

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