Employee diversity attributes of productivity and real remuneration spillover impacts of employee migration to smaller firms in the South African workplace

Abstract

Orientation: This study is part of an ongoing research project on various dimensions of labour productivity in the South African workplace.

Research purpose: The aim of this article was to determine the magnitude of employee migration to smaller firms in the South African workplace and the directional impact of this migration on employee productivity and real remuneration levels when different employee diversity attributes are considered.

Motivation for the study: The study focussed on understanding why the migration of employees from bigger and more labour productive firms can have a positive employee productivity spillover effect on smaller firms.

Research design, approach and method: Two sets of inbound employee migration possibilities were considered, namely employee migration from bigger firms and that from other smaller firms. The manufacturing industry of Gauteng Province of South Africa was used as a case study. Fixed-effect panel data estimations were performed to determine the diversity-based employee productivity and real remuneration effects created by inbound employee migration from bigger firms, other smaller firms and new non-migrating employees.

Main findings: The estimation results confirm superior positive employee productivity and real remuneration spillover effects because of inbound employee migration from bigger firms. The study also indicates that the positive employee productivity and real remuneration spillover effects because of inbound employee migration are greater for a more employee-diverse workplace.

Practical/managerial implications: Skills training and the retention of skilled employees are of utmost importance if employee productivity in firms is to be enhanced.

Contribution/value-add: The study confirms the greater employee productivity and remuneration spillover impacts of employee migration to smaller firms in the South African workplace. The size of the employee productivity and remuneration effects also vary according to employee diversity attributes.