Research Highlights Podcast
August 26, 2026
When managers try to keep their best workers from moving into other departments
Ingrid Haegele discusses the costs of talent hoarding.
Source: XArtProduction
Most firms rely on managers to spot talented workers and to encourage them to move into bigger roles within the company. But managers are judged on how their own teams perform, giving them an incentive to hold on to their best people.
In a paper in the American Economic Review, economist Ingrid Haegele provides the first empirical evidence that talent hoarding is prevalent and costly. Drawing on personnel records and surveys from a large European manufacturer with more than 200,000 employees, she finds that 75 percent of managers acknowledge hoarding. She says that the workers held back are disproportionately high-performing, with the effect falling hardest on women.
Haegele recently spoke with Tyler Smith about how she measured talent hoarding, what it costs workers, and what firms might do about it.
The edited highlights of that conversation are below, and the full interview can be heard using the podcast player.
Tyler Smith: What is talent hoarding, and what distinguishes it from a manager simply trying to build a good team of workers?
Ingrid Haegele: Talent hoarding means a manager is trying to keep an employee on their team even though they know that employee would be better off moving on. As an academic, think about a really good research assistant, a really good pre-doc. You have a gut feeling that they’re ready to move on, ready to apply for a PhD. At the same time, you’re worried about all the great work they’re doing and who will do it once they're gone?
This is exactly what we mean by talent hoarding. Managers are usually compensated based on team performance, so it's in their self-interest to have a team with really good teammates. When one of them leaves, the manager bears the cost. For the firm, it might be good to have the best people in high-level positions, but managers have this conflict of interest, this tension. They want to keep the best people on their team.
Smith: What factors lead a manager to hoard talent?
Haegele: I think this question goes back to the DNA of how we think as economists—we often think about incentives. In most organizations, a firm has very little information about talent. It's really hard to know where the good people are, so firms rely on middle managers to identify talent and develop it. If you talk to HR people, they'll say that developing talent is one of the key responsibilities of a manager. Every manager knows that, but managers are almost never compensated for it. We assume managers know where the talent is and will help those individuals climb the career ladder, but we don't give them anything for it, and we create all this extra work.
This comes back to a core part of economics, where we think there might be misaligned incentives, a conflict of interest, moral hazard. Managers might just be reacting to these incentives. This is the most human behavior ever. The problem with talent hoarding is that while it’s very much what core organizational economics would predict, it’s really difficult to measure. It’s ultimately a hidden action. That’s why we haven’t had empirical evidence showing whether it’s common and what its consequences are.
Smith: To get at the prevalence of talent hoarding, you surveyed over 3,000 managers at a large manufacturing firm in Germany. What questions did you ask these managers, and what did they tell you?
Haegele: In order to provide the first empirical evidence on talent hoarding and its consequences, I tried to collect very novel data. I was able to convince one very large manufacturing firm, one of the biggest manufacturers in Europe, to share their personnel records with me and to let me survey managers and workers. To make sure managers felt comfortable, I asked a lot of questions about managers in general. I was not asking, “Are you a talent hoarder?” but, rather, “Tell me what the incentives are at the firm and how you think other managers respond to them.”
What managers said is that they’re aware that they are key to developing talent. Almost all managers, 96 percent, said that managers have a huge impact on workers’ careers, so it’s not that managers are unaware or that the effect isn’t real—they all know it. But only 36 percent, about a third, said that this is actually rewarded by the firm, given the way team performance is. Managers are aware of this asymmetry: developing talent has a big effect, but they don’t get much for it. And 55 percent of managers in the survey said that there is a conflict of interest: ”we don’t have the incentive to promote people out of our teams.”
Interestingly, 75 percent of managers said that talent hoarding occurs from time to time. And what's really striking is that almost two-thirds of all managers at the firm participated—this is a really high response rate. With three-quarters of managers saying talent hoarding occurs, that's a big statement. It says that these misaligned incentives are common and that managers are responding to them.
Smith: You don’t just rely on what managers reported in this paper. You also look at their direct actions. How did you use data on public and private ratings of workers to measure the extent of hoarding at this firm?
Haegele: I tried to put together many different pieces of evidence to measure something that we think isn't measurable because it’s a hidden action. One piece of background: before I tried to measure talent hoarding, I ran an employee survey because neither the firm nor I knew how best to approach it. The employee survey showed what people reported as the common features of talent hoarding and how it occurs. Respondents said that managers discourage workers, including by suggesting that they do not apply outside the team. Managers may withhold career advice; they're supposed to help workers, but they might not. And they might try to reduce the visibility of worker talent, for example, by not sending workers to high-visibility training programs or by underrating public ratings of worker quality.
Once I read all this evidence from the employee survey, I started thinking about how we could measure it. One thing we can do is to look at these trainings and these public ratings. What I realized is that, at many firms, there are two types of ratings done by the same manager at the same time for the workers on their team. The first is the performance rating. This is meant to be a very private rating—you tell your worker how well they’ve been doing over the past year on their tasks. In Germany, performance ratings are a bit like salary: there’s a taboo about sharing them. On the other hand, there's also a rating on potential, where the manager is supposed to say whether you have potential for the next job. These ratings are widely shared—HR makes lists of high-potential talent and circulates them.
So, in the paper, I compare the difference between the two. If you're a talent hoarder, you want to suppress the public rating of worker talent relative to your private assessment. It could be that the worker is bad, in which case you're not suppressing anything—you just don't think they're good. But what I want to capture is the systematic underreporting of the public rating compared with the private one. I aggregate this to the manager level and identify a systematic difference. There could be many reasons a given worker doesn't get a high potential rating, but in the paper I show that the managers who consistently do this are the talent hoarders, and I relate it to different types of incentives.
I find that whenever the incentives to hoard are stronger—because managers have more money at stake; because the team is smaller, so losing a worker is really bad; or because talent is less visible in that function—I find a larger gap between the public and private ratings. I find very similar results when I look at training—whether managers avoid sending workers to high-visibility training programs. And I find the same pattern in the survey responses where managers told me whether they think talent hoarding is going on. Putting this all together is very likely a good measure of talent hoarding because the stronger the incentives you face, the more you hoard—whether measured through the ratings, the training, or the self-reports in the survey.
Talent hoarding doesn't only reduce the applicant pool, it makes it worse. For the firm, it means fewer good applicants to choose from when filling high-level positions.
Ingrid Haegele
Smith: You have a very interesting natural experiment where you use manager rotations to measure the impact of hoarding on workers. How does that work?
Haegele: In many firms and in the firm I study, managers switch jobs, and they often find out a couple of months before the switch. Intuitively, if I know I’m not going to be there tomorrow, I don't really care if people apply to other positions because I’ll be on a different team. So when a manager finds out they're about to switch jobs, it creates a temporary window in which they no longer have an incentive to hoard talent. If you want to apply, be my guest. Workers have this window where they're no longer exposed to talent hoarding, which lets me study its effect. I have about three months where the incentives are gone, so I can see what happens to applications.
What's really unique in the data is that at this firm you have to actively apply for a job switch, and I collected the universe of all job applications. So when a manager switches, I can see what happens to the workers, and I find that applications increase by almost 80 percent. When your manager is about to leave, workers are much more likely to apply. That means talent hoarding suppresses applications in the first place.
What I then do in the paper is to use these manager rotations as an instrument. I look at workers who apply only because talent hoarding is gone. These are the marginal applicants. What I see is that these workers would have been much more likely to actually get hired and to perform well in higher-level jobs. So talent hoarding doesn't only reduce the applicant pool, it makes it worse. For the firm, it means fewer good applicants to choose from when filling high-level positions.
Smith: It seems like there are strong incentives for firms to mitigate some of these issues. What should firms actually do with these findings? Are there feasible ways to prevent, or at least mitigate, talent hoarding?
Haegele: When we asked managers in the survey, about 68 percent said that they would hoard less if it were easier to replace workers. Think about times when labor markets are tight, when there are hiring freezes, when it’s really difficult to replace a worker—managers would do a lot not to lose another team member. So one thing firms can do is support managers in replacing lost talent, through succession planning or additional HR support, so managers don’t worry so much about replacement.
Firms could also try to recognize talent developers. You can think about an award or simply making this part of the manager's own performance evaluation, so a manager’s manager asks, “Have you developed any talent?” In academia we sometimes do that—we list the people we’ve mentored on our CVs to show that we're talent developers.
The firm could also try to help workers directly. In the survey, workers said most of the career advice they get comes from their manager. So, you could try to bring in more neutral influences on workers’ careers—have HR step in, or mentors, or managers from other units who don't have an incentive to hoard.
And lastly, what the survey showed, and what really shocked the firm, is that even though people can apply to jobs, most workers are terrified of applying because they're scared that the manager will find out and retaliate. One thing firms can do is to make applications anonymous and smooth out this retaliation risk. It’s a bit tricky because people go to lunch together and might find out anyway. It won’t help with the training channel or the career-advice channel, but it would at least help a little with applying and with making talent more visible in the end.
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“Talent Hoarding in Organizations” appears in the August 2026 issue of the American Economic Review. Music in the audio is by Sound of Picture.