Bell, Simon J.; Iverson, Roderick D.
January 2002
AMA Winter Educators' Conference Proceedings;2002, Vol. 13, p82
Conference Proceeding
As businesses embrace downsizing and outsourcing practices, and with the changing composition of the workforce (e.g., the rise of part time and casual workers), we are observing across industries a reduction in the average employee tenure within organizations. At the same time, the costs of employee turnover to the organization have been well documented (e.g., separation costs, recruitment and selection costs, training of replacements, initial lack of productivity of the new hire, and the loss of productivity of co-workers during the transition). In addition, there are less tangible costs such as decreased employee morale from the loss of colleagues and disruption of customer relationships. Attracting less research attention has been the costs to the firm of losing firmspecific capabilities embodied within the minds and abilities of individuals when employees depart. This is particularly noteworthy in an era of knowledge workers, learning organizations, and service economies where individuals are responsible value creation. Viewed from this perspective, the turnover of employees represents a loss of organizational memory (Kransdorrf 1997). To date there have been few investigations of employee turnover and its relationship with organizational memory (for an exception see Carley 1992). The objective of this study, therefore, is to explore how firms can protect themselves from the loss of skills and capabilities resulting from employee attrition. To answer this, we consider the notion of organizational memory and investigate its role as a "buffer" that insulates the firm against the detrimental effects of turnover.


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