Why Do Employers Retrain At-Risk Workers? The Role of Social Capital

Why are some employers willing to retrain workers who are at risk of layoff for new jobs in their organization, whereas others "churn" their workforce through layoffs and outside hiring? The question seems central to understanding why some employers and some jobs are "good," whereas others are not and, more generally, for understanding employment security. The arguments herein use national probability data to examine this question and find that the retraining option is associated with preserving the social capital among current employees. Employers who make greater use of work systems that rely on social capital are more likely to retrain their workers. Alternative explanations - that retraining is an employee benefit associated with employee-friendly policies or is part of overall strategy to invest in training - receive no support. These results extend our understanding of the role that social capital can play in organizations. They also suggest that being a "good" employer may have a great deal to do with other choices about systems of work organization