Turbulence Ahead: Strategic Human Capital Management, Job Satisfaction, and Turnover Intention

Abstract

The COVID-19 pandemic further illuminated the importance of strategic human capital management (SHCM). As the pandemic surged in the United States, employee retirement and resignation rates grew rapidly. Not surprisingly, the significant number of individuals seeking new employment opportunities or entirely exiting the labor force exacerbated human capital shortages that were already crippling public sector organizations. Fortunately, research has shown organizations that engage in SHCM initiatives can simultaneously enhance performance-related outcomes and successfully endure turbulent workforce conditions. Job satisfaction and employee turnover intention are two such outcomes that have received ample consideration among researchers. But while public sector scholarship has empirically demonstrated that SHCM influences employee job satisfaction, it has failed to adequately account for its indirect linkage to voluntary employee turnover. Therefore, using local government data collected biannually from 2016 to 2022, this study explicitly examines how endogeneity issues factor into the dynamic relationship between SHCM, job satisfaction, and turnover intention. The results of two-stage least squares regression analysis suggest that SHCM is indirectly related to employee turnover intention by way of employee job satisfaction.