The dark side of wars for talent and layoffs: Evidence from Korean firms

Hee jung Cho, Ji Young Ahn

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

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 offat 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.

Original languageEnglish
Article number1365
JournalSustainability (Switzerland)
Volume10
Issue number5
DOIs
StatePublished - May 2018

Keywords

  • Employee development
  • Firm performance
  • Human resources
  • Layoffs
  • War for talent

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