Synchronized job transfer and task-specific human capital

Abstract

Recent evidence suggests that frequent and broad lateral transfers increase the possibility of promotion. A question is how firms save the costs of these frequent lateral transfers given the existence of job-specific skills. This paper proposes a new theory of the transition across jobs based on the assumption that each job consists of tasks and that each of these tasks requires specific skills. This shows that firms synchronize the promotions and lateral transfers of their employees to reduce the cost of transferring to the employee those task-specific skills required for a new position. We find that this unique prediction is broadly supported by a large personnel data set in Japan.