Talent Hoarding in Organizations

Most organizations rely on managers to identify talented workers. However, because managers are evaluated on team performance, they have an incentive to hoard talented workers, thus jeopardizing the efficient allocation of talent within firms. This study provides the first empirical evidence of talent hoarding using a unique combination of personnel records and application data from a large manufacturing firm. When managers rotate to a new position and temporarily stop hoarding talent, workers’ applications for promotions increase by 123%. Marginal applicants,who would not have applied in the absence of manager rotations, are three times as likely as average applicants to land a promotion, and perform well in higher-level positions. By reducing the quality and performance of promoted workers, talent hoarding causes misallocation of talent. Because female workers react more to talent hoarding than males, talent hoarding perpetuates gender inequality in representation and pay at the firm.

That is a new paper by Ingrid Haegele, via the excellent Kevin Lewis.