New Insights on the Firm-Specific Human Capital Debate: Theoretically Decoupling KSAOs from Tasks

Abstract

In this paper we try to reconcile the conflicting positions in the strategic human capital literature about the implications of firm-specific human capital by suggesting that human capital results from the complementarity that emerges when employee knowledge, skills, abilities, and other characteristics (KSAOs) match the tasks the firm requires to produce economic value. Doing so allows us to introduce a new human capital typology that can be expressed in a two-by-two matrix where the level of specificity of KSAOs to tasks is compared to the specificity of tasks to firms. The two-by-two matrix allows us to organize extant human capital research into three of the four cells, but also highlights an under-theorized cell that we call mobile firm-specific human capital. This type of human capital is characterized by tasks that are specific to the firm, but that only require highly general KSAOs. We then discuss how our framework helps us to revisit the firm-specific human capital debate but also its implications for the HR architecture that has set firm boundaries based on traditional notions of valuable and unique human capital, as well as aggregation issues related to the emergence of human capital resources within the firm.