WHO LEAVES, WHERE TO, AND WHY WORRY?
EMPLOYEE MOBILITY, ENTREPRENEURSHIP AND EFFECTS ON SOURCE FIRM PERFORMANCE
Human capital is considered an organization’s core competency and source of competitive advantage, thus strategic management of human assets is critical particularly in knowledge-intensive industries.
Translating human assets to sustainable competitive advantage is challenged with management dilemmas, Employee mobility puts ﬁrms in the position of not only losing their competitive advantage but also enabling their competition, given the transfer of the human assets to either established competitors or to ‘spinouts’ (i.e., entrepreneurial ventures created by ex employees)
So the following questions are critical in the strategic management of human capital:
“What types of employees are most likely to leave, what types of ﬁrms are they most likely to join”
To answer these questions, the article developed theoretical rationale for employee mobility and entrepreneurship decisions
In this article context, the core asset refers to the human capital i.e the focal employee who is at risk of exit, while the complementary assets relate to the other human and nonhuman resources and capabilities (e.g., other employees, routines, opportunities, physical assets, intellectual property, etc.) that are provided by the ﬁrm for the creation of value
The employee’s ability to recreate or transfer the complementary assets affects employees’ decisions to stay, create a new venture, or join another established ﬁrm.
The article researched the legal services industry—a professional services sector where human assets are critical for the creation and appropriation of value and tested the predictions about who leaves, where they go, and the impact of the mobility events on source ﬁrm performance At the ﬁrm level, we ﬁnd that employee moves to a spin-out have a larger adverse impact on source ﬁrm performance than employee moves to established ﬁrms,