📄 Abstract
Employee retention is the oldest instrument in the human resource repertoire and the least examined for its external cost. This paper sets the firm-level value of retention against the economy-level value of the knowledge spillovers that employee mobility generates, and asks whether the contractual devices firms use to hold staff in place — post-employment non-compete covenants above all — are worth what the wider economy pays for them. Following a PRISMA-guided protocol, 1,580 records were identified and 48 studies retained, drawn overwhelmingly from the United States, where half a century of accidental and deliberate state-level legal change has produced the only body of credibly identified evidence on the question. The synthesis is unambiguous in direction. Stricter enforceability of mobility restrictions raises firm-appropriable outcomes modestly — intangible investment by roughly 8 per cent and firm-sponsored training by a contested 0 to 7 per cent — while depressing the outcomes through which knowledge reaches the rest of the economy substantially: inventor mobility by 11 to 17 per cent, patenting by 12 to 19 per cent, spinout formation by 6 to 11 per cent and worker earnings by 2 to 4 per cent, alongside a 13 per cent rise in the emigration of the most highly cited inventors out of enforcing states. The asymmetry is structural rather than accidental: the firm's gain is largely a transfer captured from the worker, whereas the economy's loss is a genuine deadweight in the reallocation of human capital. Because the retaining firm internalises the whole of the first and none of the second, the privately optimal restriction is systematically stricter than the socially optimal one, and the gap widens precisely in the knowledge-intensive sectors where spillovers matter most. The paper closes by proposing a four-tier regulatory and managerial framework that preserves genuine appropriability through narrower instruments — compensated garden leave, calibrated non-solicitation, trade-secret enforcement and deferred equity — while removing the blunt post-employment restraint that carries almost the whole of the social cost. For the human resource function the implication is that retention should be re-founded on engagement, empowerment and leadership quality rather than on legal immobilisation.
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📚 How to Cite:
Dr. N Subbukrishna Sastry, Dr. Manjula Mallya M , EMPLOYEE RETENTION POLICY AND THE ECONOMIC VALUE OF KNOWLEDGE SPILLOVERS: A SYSTEMATIC REVIEW OF UNITED STATES NON-COMPETE REGIMES AND OPEN TALENT ECOSYSTEMS , Volume 14 , Issue 7, August 2026, International Journal of Indian Economic Light(JIEL) , Pages: 1 - 18 ,