Knowledge-Based Jobs and the Boundaries of Firms: Agent-based Simulation of Firms Learning and Workforce Skill Set Dynamics

The article explores emergence and survival of human resource management strategies and organisational types in a knowledge-based job market. The analysis considers a dynamic environment in which skill requirements change rapidly. We built an agent-based model to simulate a market where firms post job offers to fill vacancies and decide how to select and reward employees; employees, bearing skills, select firms comparing job offers. Taking an evolutionary approach, we explore how hiring strategies, which guarantee survival, emerge from interconnected variation, selection and retention processes. The simulation experiments suggest that, as the rate of change of the environment increases, long-term employment and firm-specific knowledge building emerge as the survival strategy.