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Factors determining rate of employee turnover in companies

A survey conducted in Lithuania in 2007, at the request of the Lithuanian Labour Exchange, sought to identify factors determining employee turnover in companies. The survey found that pay and working conditions are key factors influencing the rate of staff turnover. Moreover, the survey concluded that employers give a more positive evaluation of working conditions and career opportunities for personnel in their enterprises than do employees.

Survey characteristics

In 2007, the Lithuanian Labour Exchange (Lietuvos darbo birža, LDB) commissioned a survey to analyse the most important factors influencing the turnover of employees in Lithuanian enterprises. Two groups of respondents were interviewed within the framework of the survey, comprising:

  • representatives of enterprises or employers operating in the county of Kaunas in central Lithuania;
  • employees working in these companies.

The employers and employees were asked the same questions about working conditions, wages, the psychological climate and career opportunities in the companies they represented. The survey was carried out by staff members at the Kaunas County local labour exchange. A total of 160 employers and 1,306 employees were selected to take part in the survey from a list of enterprises, using the random systemised selection method.

In total, 79% of the interviewed employers and employees worked in urban enterprises, with the remaining 21% working in rural enterprises. Most of the employers and employees represented service and industrial companies (Figure 1).

Distribution of survey respondents, by economic activity (%)

Distribution of survey respondents, by economic activity (%)

Source: LDB, 2007

Most of the employers and employees surveyed represented small and medium-sized enterprises (see Table).

Distribution of employers and employees surveyed, by company size (%)
This table presents the distribution of employers and employees surveyed, according to company size.
  Micro enterprises (up to 10 employees) Small enterprises (11–49 employees) Medium-sized enterprises (50–249 employees) Large enterprises (more than 250 employees) Total
Employers 8   38   40   14   100  
Employees 7   29   43   21   100  

Source: LDB, 2007

Main survey findings

Evaluation of working conditions

The survey found that the employers’ evaluation of working conditions in their companies was somewhat more positive than that of their employees. According to the findings, 77% of the employers stated that working conditions in their enterprises were good or very good, compared with 63% of their employees (Figure 2).

Evaluation of company working conditions (%)

Evaluation of company working conditions (%)

Source: LDB, 2007

Evaluation of wages

According to the survey, more than one third of the respondent employers (38%) stated that the wages in their companies matched the jobs performed by employees, while 33% of the employers thought that wages should be higher and 29% admitted that they could not raise the wages of their employees.

On the other hand, as few as 17% of the employees considered that their wage conformed with the job they performed. More than two thirds of the employees, regardless of the size and activity of the company for which they worked, thought that their wages should be higher. According to the employees surveyed, wages best matched the jobs performed in the construction sector.

Evaluation of career opportunities

The survey found that the employers and employees expressed different opinions as to career opportunities in the enterprises concerned. In total, 76% of the employers believed that their companies offered good career opportunities (Figure 3). However, this opinion was supported by only 49% of employees. Overall, 23% of the employees and 13% of the employers thought that career opportunities were limited or non-existent in the companies they represented.

Opinions on career opportunities in the companies concerned (%)

Opinions on career opportunities in the companies concerned (%)

Source: LDB, 2007

Factors reducing employee turnover

The employers and employees surveyed identified similar factors determining, in their opinion, staff turnover in their companies. According to both parties, the key factor was remuneration for work. A third of respondents also emphasised working conditions or the implementation of new technologies in the enterprise as important factors.

Commentary

The findings of the survey indicate that, in order to minimise the turnover of employees in enterprises, it is important to improve working conditions and the psychological climate, increase wages, implement new technologies, reduce physical workload and provide employees with social security guarantees.

Rasa Zabarauskaite, Institute of Labour and Social Research



Page last updated: 17 March, 2008
About this document
  • ID: LT0609049I
  • Author: Rasa Zabarauskaite
  • Institution: Institute of Labour and Social Research
  • Country: Lithuania
  • Language: EN
  • Publication date: 17-03-2008
  • Subject: Income and payment systems, Labour market, Psychosocial work factors, Quality of work indicators