EXPRESS: Spotlight Personnel: How Hiring and Turnover Drive Service Performance versus Demand

Abstract

In many sectors of the entertainment industry a few employees are in the public spotlight when performing the key service. For example, in professional team sports a team of players competes in games and in TV shows a cast of artists acts in different episodes. These employees, coined spotlight personnel, are an essential but expensive element of ongoing service delivery. Despite their importance and cost, very little is known about how changes in spotlight personnel affect service performance and demand. To address this gap, this paper uses unique data on professional German soccer teams tracking the quantity (number of players) and quality (average transfer price) of spotlight personnel hiring (incoming transfers) and turnover (outgoing transfers), objective service performance (winning percentage) and demand (ticket sales) across four decades, utilizing both traditional and novel time series methods. The results show that service performance and demand are primarily affected by spotlight personnel hiring rather than turnover. Hiring quantity decreases service performance yet increases demand whereas hiring quality benefits both service performance and demand. The analysis further uncovers that these effects are subject to dynamic interactions and nonlinearities. Investment scenarios showcase how understanding these effects can substantially improve managerial decision making.