Voluntary Turnover and Firm Performance: Firm-Specific Human Capital Loss and Organizational Change

The purpose of this study is to explore the relationship between voluntary turnover and firm performance among Korean firms listed in the HCCP data collected in 2015. Based on the human capital view, we expect that voluntary turnover will have a negative impact on firm performance. The results obtained through the hierarchical OLS regression confirm the negative implications of voluntary turnover on firm performance, highlighting the importance of retaining human capital. In addition, from the contingency perspective, we examined the interaction effect of firm-specific human capital (FSHC) Loss and organizational change. Results show that organizational change alleviates the negative impact of voluntary turnover, implying that firms will suffer less when implementing a higher degree of organizational change. However, no significant result was found for FSHC Loss. Then, we found that the significant three-way interaction effect of FSHC and organizational change. The result suggests that the negative impact of voluntary turnover is neutralized when firms implement a higher degree of organizational change by minimizing the loss of FSHC. We also provide theoretical and practical implications.