IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i5p1365-d143591.html

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/5/1365/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/5/1365/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rachel M. Hayes & Paul Oyer & Scott Schaefer, 2006. "Coworker Complementarity and the Stability of Top-Management Teams," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 184-212, April.
    2. Boris Groysberg & Linda-Eling Lee, 2009. "Hiring Stars and Their Colleagues: Exploration and Exploitation in Professional Service Firms," Organization Science, INFORMS, vol. 20(4), pages 740-758, August.
    3. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    4. Beechler, Schon & Woodward, Ian C., 2009. "The global "war for talent"," Journal of International Management, Elsevier, vol. 15(3), pages 273-285, September.
    5. Karl V. Lins & Henri Servaes & Ane Tamayo, 2017. "Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis," Journal of Finance, American Finance Association, vol. 72(4), pages 1785-1824, August.
    6. Chen, Peter & Mehrotra, Vikas & Sivakumar, Ranjini & Yu, Wayne W., 2001. "Layoffs, shareholders' wealth, and corporate performance," Journal of Empirical Finance, Elsevier, vol. 8(2), pages 171-199, May.
    7. Pfeffer, Jeffrey, 2001. "Fighting the War for Talent is Hazardous to Your Organization's Health," Research Papers 1687, Stanford University, Graduate School of Business.
    8. Clare Kelliher & Michael Riley, 2003. "Beyond efficiency: some By-products of functional flexibility," The Service Industries Journal, Taylor & Francis Journals, vol. 23(4), pages 98-113, September.
    9. Clint Chadwick & Larry W. Hunter & Stephen L. Walston, 2004. "Effects of downsizing practices on the performance of hospitals," Strategic Management Journal, Wiley Blackwell, vol. 25(5), pages 405-427, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matt Marx & Bram Timmermans, 2017. "Hiring Molecules, Not Atoms: Comobility and Wages," Organization Science, INFORMS, vol. 28(6), pages 1115-1133, December.
    2. Ben-Nasr, Hamdi & Ghouma, Hatem, 2018. "Employee welfare and stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 700-725.
    3. Muñoz-Bullón, Fernando & Sánchez-Bueno, María José, 2008. "Does downsizing improve organizational performance? An analysis of Spanish manufacturing firms," DEE - Working Papers. Business Economics. WB wb083007, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    4. Shima Amini & Sofia Johan & Eilnaz Kashefi Pour & Abdulkadir Mohamed, 2023. "Employee Welfare, Social Capital, and IPO Firm Survival," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2174-2204, November.
    5. Schmoll, René & Süß, Stefan, 2019. "Working Anywhere, Anytime: An Experimental Investigation of Workplace Flexibility's Influence on Organizational Attraction," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 30(1), pages 40-62.
    6. Kao, Chun-Lin & Chen, Ming-Yuan, 2020. "Employee downsizing, financial constraints, and production efficiency of firms," International Review of Economics & Finance, Elsevier, vol. 68(C), pages 59-73.
    7. Xavier Jaravel & Neviana Petkova & Alex Bell, 2018. "Team-Specific Capital and Innovation," American Economic Review, American Economic Association, vol. 108(4-5), pages 1034-1073, April.
    8. Mai, Nhat Chi, 2021. "Talent Conceptualisation and Talent Management Practices within the Banking Sector in Vietnam," OSF Preprints y6r4q, Center for Open Science.
    9. Daniel W. Elfenbein & Adina D. Sterling, 2018. "(When) Is Hiring Strategic? Human Capital Acquisition in the Age of Algorithms," Strategy Science, INFORMS, vol. 3(4), pages 668-682, December.
    10. Marta F. Arroyabe & Katrin Hussinger & John Hagedoorn, 2020. "Hiring New Key Inventors to Improve Firms’ Post-M&A Inventive Output," DEM Discussion Paper Series 20-19, Department of Economics at the University of Luxembourg.
    11. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    12. Francesco D’Acunto & Geoffrey Tate & Liu Yang, 2020. "Entrepreneurial Teams: Diversity of Skills and Early-Stage Growth," Working Papers 20-45, Center for Economic Studies, U.S. Census Bureau.
    13. Eleni T. Stavrou & Chris Brewster, 2005. "The Configurational Approach to Linking Strategic Human Resource Management Bundles with Business Performance: Myth or Reality?," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 16(2), pages 186-201.
    14. Alexandre Mas & Enrico Moretti, 2009. "Peers at Work," American Economic Review, American Economic Association, vol. 99(1), pages 112-145, March.
    15. Fogel, Kathy & Jandik, Tomas & McCumber, William R., 2018. "CFO social capital and private debt," Journal of Corporate Finance, Elsevier, vol. 52(C), pages 28-52.
    16. David J. Cooper & Krista Saral & Marie Claire Villeval, 2021. "Why Join a Team?," Management Science, INFORMS, vol. 67(11), pages 6980-6997, November.
    17. Chiaki Moriguchi, 2005. "Did American Welfare Capitalists Breach Their Implicit Contracts during the Great Depression? Preliminary Findings from Company-Level Data," ILR Review, Cornell University, ILR School, vol. 59(1), pages 51-81, October.
    18. Arru Brunella & Delrio Federico & Furesi Roberto & Pulina Pietro & Fabio Albino Madau, 2025. "Role of environmental, social and governance disclosure in business profitability and cost of debt: An analysis of small Southern Italian agri‐food businesses," Agribusiness, John Wiley & Sons, Ltd., vol. 41(3), pages 856-895, July.
    19. Leon Zolotoy & Don O’Sullivan & Keke Song, 2021. "The Role of Ethical Standards in the Relationship Between Religious Social Norms and M&A Announcement Returns," Journal of Business Ethics, Springer, vol. 170(4), pages 721-742, May.
    20. Muhammad Imran Hanif & Muhammad Shahzad Hani & Asif Kamran & Rabia Khan & Shao Yunfei, 2016. "Knowledge Sharing And Innovation Performance Affected By Hr Generic Strategies: An Empirical Study Of Smes In China And Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(1), pages 272-306.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1365-:d:143591. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.