The Paradox of Employee Retention for Knowledge Transfer

Employee retention is widely held to positively influence an organisation's knowledge transfer outcomes. This positive relationship is most widely recognised through the impact that employee retention has on increasing a firm's level of the knowledge transfer antecedent, absorptive capacity, thereby increasing the potential value of the stocks of knowledge within the organisation. A paradoxical outcome, however, is discovered when the effect of employee retention on knowledge transfer is considered from the perspective of knowledge flows across the organisation rather than knowledge stocks within. Case study analysis from research conducted in a multinational hotel chain identifies this paradox. Primarily the findings indicate that while employee retention increases individual absorptive capacity it may prevent a relative increase in organisational level absorptive capacity. Further, the creation of knowledge sharing networks is facilitated through longer term retention of staff. However, where they manifest as a result of retention they remain closed to the larger organisation. As a result this paper identifies significant implications for the management of longer term employees' knowledge sharing behaviour.