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.
Highlights
The recent business environment of rapid change and innovation has put renewed questions about how managing human resources (HRM) can contribute to organizational effectiveness and sustainability
We argue that investments in employee development can mitigate the negative impact of layoffs on the relationship between war-for-talent practices and organizational performance
All the two-way interaction effects on financial performance are negative, and the two-way interaction between investment in employee development and layoffs is not significant. These results indicate investment in employee development can attenuate the negative effect of layoffs on the relationship between war-for-talent practices and organizational performance
Summary
The recent business environment of rapid change and innovation has put renewed questions about how managing human resources (HRM) can contribute to organizational effectiveness and sustainability. The strategic HRM literature in building on resource-based views (RBV) has long argued that one of the key elements for organizational sustainability is the acquisition and retention of human resources that are valuable, unique, and difficult to imitate [1,2,3]. Against this backdrop, it is no wonder that many firms increase their efforts to obtain this talent and these “wars for talent” continue to heat up. Hiring talent can enhance organizational capabilities and sustainability by generating innovation and playing complementary roles in expanding the current capabilities of an organization [6,7]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
