Drawing on a coalitional view in the Behavioral Theory of the Firm, we focus on how employees affect the allocation of cash holdings in firms. Specifically, we argue that the bargaining power of employees will affect the extent to which cash holdings are allocated to new hires. Using panel data from 62,608 firms, we show a positive, but decreasing effect of cash holdings on new hires. This relationship is strengthened for subgroups of employees which hold more power because firms are more dependent on them and an exogenous law change grants them stronger protection against employers. As such, this study sheds light on the role of employees, as important but under-examined coalition members, in the allocation of cash holdings within firms.