The purpose of this paper is to examine the effect of individual‐based, firm‐based, and market factors on job retention, basing its hypotheses on human capital theory and signaling models.
By collecting secondary data on 180 employees who left their jobs at one firm and interviewing human resource managers and those who left for other jobs, factors determining the decision to stay with a firm for a certain period were investigated. Hierarchical regression analyses were performed to test hypothesized relationships.
Marriage, gender, honored employee status, relative pay (both inter‐firm and intra‐firm wages), speed of promotion, and economic cycles had a significant impact on how long the employees retained their jobs, but education level and individual performance did not. Firm‐specific human capital, wages, and signaling effects were proved to affect job retention. Firm‐based factors had a significantly more pronounced impact on the ultimate decision than individual‐based factors.
This study examines worker mobility from the perspective of actual length of job retention, complementing existing streams of research based on intention to leave. Because a few unexamined psychological and sociological factors may confound the findings and because only examine one firm is examined, care should be used when generalizing the findings to other firms.
The study provides evidence useful in the creation of human resource management practices aimed at retaining competent employees.
This study's research questions and methods are new to the line of turnover studies, making it a starting point for further lines of exploration.
