Friday, October 06, 2006

Social Capital approach

The other day I posted on how organizations need to find out ways to benefit from the knowledge and skill of employees who are leaving. I came across this interesting study which says “losing an employee, at least in a high-tech field, is not necessarily as bad as it seems.”Firms can wind up learning when employees leave their firm, which is contrary to the conventional wisdom -- that firms learn by hiring away employees," says Wharton management professor Lori Rosenkopf.

But Rosenkopf says the picture is different when employees are viewed in terms of "social capital." Workers aren't just silos of knowledge and skill onto themselves, but rather are part of social networks of workers from various firms who talk about what's going on in their field. Those networks may involve formal arrangements, such as strategic alliances, but they may also be informal, involving professional conferences, email exchanges, common blog sites or even after-hour socializing.

"The social capital approach would predict that the firm losing an employee would gain access to the new employer's knowledge, while the human capital approach would not," the researchers suggest in their paper.

So it’s not always a bad idea if at all some people leave organizations. But building such social capital of the organization continues to be a challenge. This concept may work as long as people are able to associate themselves with the previous organization and continue to share an intimate and personal relation with colleagues and ex-co workers. It all depends on the learning and sharing culture which the organization has been able develop.

1 comment:

John Schneider said...

I think there is a gap between theory and reality when it comes to employee retention.

No one can dispute the logic of keeping good employees. Unfortunately, humans don't make decisions based on reason. Companies often drive good people away due to the emotional insecurities of management (envy, ego, insecurity, greed, etc). It's hard to imagine that these individuals would be open to learning something from an employees departure, or that their organizations would gain more than they would lose.