Turnover and Innovation: Moderating Effect of Skill Type, Skill Level and Communication

Abstract

Main focus of this study tries link the connection between turnover and innovation. Despite the thorough researches regarding both turnover and innovation there has been a lack of interest between these two. Drawing from both human capital and social capital theory here it predicts that turnover will have a negative impact on a firms innovative performance. There has been a growing importance of whose turnover has a stronger impact on organizational performance. Some researchers have focused on the difference of individuals performance levels but to measure individuals contribution to a firms innovation, how much knowledge an individual has is important. Organizational tenure has been known to be a good measure of an individuals stock of knowledge and experience, so for the current study it focuses on the differences in individuals tenure. It also tries to discover what contextual factors within an organization may strengthen or lessen the relationship between turnover and innovation. A total sample of 210 Korean firms were used to the proposed hypotheses by negative binomial regression. Results show that there is a negative relationship between turnover and innovation, but also shows that turnover maybe beneficial for innovation if there is either a low or high rate of turnover within the organization. Furthermore, the level of skill and communication have shown to moderate the negative relationship, showing that contextual variables within organizations should be also considered for future researches. This study is one of the few study that tries to connect the link turnover and innovation and also highlights that consideration of contextual variables are needed.