Dancing with the Stars: How Talent Shapes Firm Performance

41 Pages Posted: 15 Mar 2012 Last revised: 30 Aug 2012

See all articles by Bo H. Eriksen

Bo H. Eriksen

Region of Southern Denmark; affiliation not provided to SSRN

Date Written: August 29, 2012

Abstract

In spite of the attention that attracting and retaining talent receives, little is known about effective talent management. What is the impact of talent on firm performance, among which employee types should firms build talent and do complementarities between employee talent and firm resources affect which talent management approach firms should follow? Our paper contributes with two insights using a rich panel of Danish matched employer-employee data. We identify a tradeoff between short term adjustment costs and longer term gains from increasing talent where initial gains appear of offset later benefits. We identify important complementarities between manager and worker talent, and between these and the firm’s capital resources and organizational design. These complementarities suggest that firms can create and appropriate rents from talent when their talent acquisition strategy is well aligned with policy and organizational choices.

Keywords: Strategic human capital, firm performance, organization design, panel data

JEL Classification: C23, M10, M12, M50, M51, J6, J24, D24

Suggested Citation

Eriksen, Bo H. and Eriksen, Bo H., Dancing with the Stars: How Talent Shapes Firm Performance (August 29, 2012). Available at SSRN: https://ssrn.com/abstract=2021899 or http://dx.doi.org/10.2139/ssrn.2021899

Bo H. Eriksen (Contact Author)

affiliation not provided to SSRN

Region of Southern Denmark ( email )

Damhaven 12
Vejle, DK-7100
Denmark
DK-7100 (Fax)

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