Corporate Social Responsibility and Employee Retention
54 Pages Posted: 30 Jun 2022
Date Written: June 23, 2022
Using administrative data from the U.S. Census, this study provides the first direct evidence on the positive effect of firms’ corporate social responsibility (CSR) policies on employee retention. Following an exogenous shock leading to deterioration in firms’ CSR policies, we find that within an employer, voluntary separation rate of CSR-conscious employees increases while that of others does not, and such employee turnovers are costly to employers. Furthermore, for CSR-conscious employees, CSR’s retention effect cannot be substituted by financial incentives. Our findings suggest that CSR-related value alignment between firms and employees serves as a non-financial job benefit that strengthens employee retention.
Keywords: employee retention, CSR, environmental consciousness, social consciousness, financial incentive, non-financial incentive
JEL Classification: G13, G14, G41, G23, J31, L25, M52
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