Purpose: The creation of customized, technology-based services is highly dependent on experience-based knowledge embodied in individual expert employees. Therefore, knowledge upgrading through recruitment is fundamental to advanced services firms. Paying particular attention to the role of pre-existing knowledge bases and organisational contexts, this paper investigates how software services firms search and select new employees. By doing so, it addresses an underdeveloped part of the human resource management (HRM) literature that concerns the relationship between recruitment and organisational learning.
Design/methodology/approach: The analysis uses qualitative data gathered through semi-structured interviews with HR managers and executives in 12 software firms located in the Norwegian capital, and supplementary information from technologists’ CVs. The firms are strategically chosen to support conceptual development and to allow theoretical generalizations that have relevance for practitioners, and for future research.
Findings: The findings point to a challenging tension associated with the need to create stable individual knowledge linkages internally in consultancy-based business environments where technologists tend to develop their careers through external labour market mobility.
Practical implications: Mangers should reflect upon the balance between external and internal competence investments. The creation of an organisational labour market (ILM) represents one way of co-investing in integrative capabilities and thus of avoiding over-dependency on external sources of knowledge.
Originality/value: The study provides a conceptual model linking recruitment to organisational learning, and emphasises the importance of knowledge management functions at the intersection between external labour markets and the internal organisation.