Voluntary turnover: knowledge management – friend or foe?

Abstract

The onset of the knowledge era has affected all industries. Without exception, the Canadian financial services industry has transformed itself due to the knowledge‐intensive structure it possesses. However, high competition and career‐minded professionals have created a situation in which leading financial services firms are losing key human capital each day – capital that can and will be used against them in the modern, fast‐paced labour market. In the fight for the brightest senior executives, portfolio managers and fund administrators, human resource professionals must pay attention to the investments they are making in their employees through training and development, while monitoring reward and recognition programs, so that loss of intellectual capital is kept to a minimum. This study examines 19 Canadian financial service firms and their current human capital practices. Results show that while human resource managers are effectively managing the people in their organizations through training and development, performance reviews, and the effective management of fluctuating workforce demands. However, this study highlights the need for greater attention to be paid to the leveraging of human capital that exists within their knowledge‐intensive workforce. Furthermore, research findings strongly suggest the need to increase knowledge management behaviours such as the valuation and codification of organizational knowledge assets.