Purpose – This paper aims to estimate empirically the effect on the voluntary turnover (quit) rate of employees when a large public corporation already judged as an outstanding employer is also ranked as being socially responsible by an external review organization. Design/methodology/approach – The paper employs a cross‐section regression of the turnover rate of 84 of Fortune magazine's “100 Best Employers” against measures of corporate social responsibility (CSR) and several other control variables such as annual wages, ethnic and gender composition of the labor force that economic theory and prior studies have identified as explaining firm labor turnover. Findings – Adoption of business policies that cause the firm to be rated as socially responsible reduce the annual quit rate by 3 percent to 3.5 percent, which amounts to a 25‐30 percent reduction, as compared to non‐CSR public corporations or a larger comparison set including privately held and not‐for‐profit firms. Research limitations/implications – The wider universe of public corporations may not realize comparable turnover benefits from CSR as these “best employers” because these firms might be especially vulnerable or sensitive to corporate image when hiring workers. Practical implications – The model estimated permits calculation of the annual rise in average wages that would be required to reduce turnover by the same amount as CSR, a sum of approximately $3,700 per year or about 9 percent of the mean wage, with a lower bound estimate of about $1,000. This suggests that these firms can significantly reduce labor costs by investing in worker‐friendly employment policies, which account for half of the entire measured CSR impact. Originality/value – This is believed to be the first effort to quantify rigorously the effect of CSR on the employment side of firm performance. Prior labor studies have looked at hypothetical employment scenarios involving students.
Corporate Governance – Emerald Publishing
Published: Oct 19, 2010
Keywords: Corporate social responsibility; Employee turnover; Employers; Corporate image; Public sector organizations
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera