Family friendly firms, female employees and turnover-an analysis across time and countries
Purpose– The objectives of this study are to examine actual turnover rates and how they are impacted by family friendly firm policies and the share of female employees in four European countries between 2002 and 2011.
Theoretical consideration –The theoretical argumentation is based on Social Exchange Theory, which postulates that additional benefits like family friendly policies are likely to create internal obligations on the part of employees to recompense the organization by increased level of commitment and attachment to the organization. Recent empirical studies support the argument that firms offering a family friendly work atmosphere have lower turnover rates. In general, empirical studies find higher turnover rates for female employees. Most of these turnover rates following childbirth may derive from personal or family-related reasons like childrearing. Therefore I assume establishing family friendly policies in an organization compensate higher turnover rates of female employees.
Design/methodology/approach– In this study I analyze a nine-year longitudinal dataset of 200 listed firms in Germany, Switzerland, France and Great Britain between 2002 and 2011. The data are taken from Asset4. A comparative descriptive analysis shows differences in family friendly firms, female employees and turnover rates between countries. To test whether family friendly firm practices and female employees have an influence on turnover, multiple pooled OLS regression analysis with country and year dummies are performed. Further controls are industries dummies, number of employee and performance of the company.
Findings– The empirical results of the multiple regression show that having a high score of family friendliness is negatively related to turnover rates, whereas the percentage of female employees in the workforce is positively related to turnover rates. If an interaction term of friendly firms and female employees is included the turnover increasing effect deriving from the percentage of female employees disappears.
Concluding remarks– In sum and in accordance with Social Exchange Theory the first empirical results hint at a positive link between turnover rates and family friendly policies. Moreover I find that the negative effect of female employees on turnover rates vanishes once an interaction of family friendly firms and female employees is included.