"Managing Stock and Flow of Human Capital: Inflow, Outflow, and Stock Stability"

Abstract

We advance the collective turnover literature by investigating the effects of human capital outflow, inflow, and the stock stability on organizational performance. Building on the human capital stock and flow model, we theorize that negative effects of human capital outflow—measured as voluntary turnover rates—are influenced differently by the types of human capital inflow— measured as inexperience and experienced hires. In addition, we also investigate how human capital stock stability— measured as employment variability—influences the human capital outflow and organizational performance relationship. Using balanced panel data from six years of biennial surveys of 310 Korean firms merged with archival data, we show that the turnover rates and organizational performance relationship is weakened when a firm hires inexperienced workers at high rates, but not when it hires experienced workers at high rates. In addition, the turnover-performance relationship was weakened when employment variability was high. We discuss the implications for future turnover, staffing, and human resource management research and practice.