Why Do Employers Retrain At-Risk Workers? The Role of Social Capital

27 Pages Posted: 10 May 2004

See all articles by Peter Cappelli

Peter Cappelli

University of Pennsylvania Wharton School - Center for Human Resources; National Bureau of Economic Research (NBER); University of Pennsylvania - Management Department

Abstract

Why are some employers willing to retrain workers who are at risk of layoff for new jobs in their organization, whereas others "churn" their workforce through layoffs and outside hiring? The question seems central to understanding why some employers and some jobs are "good," whereas others are not and, more generally, for understanding employment security. The arguments herein use national probability data to examine this question and find that the retraining option is associated with preserving the social capital among current employees. Employers who make greater use of work systems that rely on social capital are more likely to retrain their workers. Alternative explanations - that retraining is an employee benefit associated with employee-friendly policies or is part of overall strategy to invest in training - receive no support. These results extend our understanding of the role that social capital can play in organizations. They also suggest that being a "good" employer may have a great deal to do with other choices about systems of work organization.

Suggested Citation

Cappelli, Peter, Why Do Employers Retrain At-Risk Workers? The Role of Social Capital. Industrial Relations, Vol. 43, No. 2, pp. 421-447, April 2004. Available at SSRN: https://ssrn.com/abstract=524279

Peter Cappelli (Contact Author)

University of Pennsylvania Wharton School - Center for Human Resources ( email )

3733 Spruce Street, Vance Hall
Philadelphia, PA 19104-6358
United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/cappelli.html

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

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