EMPLOYEE MOBILITY AND INNOVATION: THE ROLE OF TURNOVER RATE AND NETWORK CENTRALITY
Innovation is crucial to a company’s competitive advantage and employees play an important role in generating innovation within a company. Based on social capital theory, we proposed a new type of social network: the employee mobility network, and explored the impact of employee mobility on innovation. Specifically, we examined the role of both employee turnover rate, and an organisation’s centrality in the employee mobility network in predicting innovation. We collected data from World Intellectual Property Organisation (WIPO), Talentale, and Forbes Global 2000 to test our hypotheses. The results showed that turnover rate had a significantly inverted-U curve relationship with innovation, and both degree and closeness centralities of an organisation in the employee mobility network had a significant positive relationship with innovation. Based on the results, we suggest that companies should find a balanced value for their turnover rate to get the highest return in innovation. Also, we suggest that companies should improve social influence in employee mobility networks in order to attract talent and increase company innovation.