While general turnover has been extensively studied, competitive attrition—the loss of talent to rival firms—, which can disproportionately impact an organization's market share, customer relationships, and overall performance, remains understudied despite its critical importance. Firms often turn to performance-based compensation to motivate employees, particularly in salesforces. However, the relationship between compensation structures, turnover, and competitive attrition is not well understood.
In this seminar Dr Alireza Keshavarz explores how compensation dispersion and regional labor market conditions shape both turnover and the movement of top sales talent to competitors. Drawing on a dataset that tracks over 50,000 employees across firms in French manufacturing from 2003 to 2020, the analysis highlights how compensation strategies intended to retain top performers can have unintended consequences, such as increasing their attractiveness to competitors. The discussion will also consider how firms operating in different labor markets may need to adjust their compensation and retention strategies to balance performance incentives with the risk of talent loss.