Predicting employee turnover using financial indicators in the pharmaceutical industry

Abstract

Purpose This study aimed at investigating the impact of some financial indicators (salary competitiveness, employee productivity, company performance and company size), disclosed in the annual financial reports, on employee turnover in Jordanian pharmaceutical companies listed on the Amman Stock Exchange (ASE). Design/methodology/approach A longitudinal design with cross-sectional time-series (panel) data from annual financial reports of six Jordanian pharmaceutical companies, listed on the ASE for the period 2009–2018, was used to measure employees’ turnover and its precedents quantitively. The panel data of 160 observations (six companies with ten-time periods) were analyzed using STATA 15.0 to achieve study objectives. Findings Contrary to what is expected, the results showed that salary competitiveness does not affect employee turnover, and employee productivity positively affects employee turnover. In contrast, the results of this study supported the widespread belief that company performance and size negatively affect employee turnover. Research limitations/implications This study does not address voluntary and mandatory turnover because it is very difficult to distinguish the two types based on financial reports. Also, other important variables (medical expenses, training expenses, etc.), which can affect employee turnover are not disclosed in the financial reports of all pharmaceutical companies due to the lack of uniform financial reporting standards. Practical implications Pharmaceutical companies should not focus on salaries to attract and retain employees but rather provide them with a distinct set of other benefits including salaries. Also, it should try to reduce the workload of employees by increasing their number to the extent that it does not constitute an additional burden on other employees. Originality/value This is the first attempt, according to a literature review, to measure employee turnover and its antecedents based on financial indicators disclosed in the pharmaceutical companies’ annual financial reports.

Comparison of factors affecting turnover intention by job field in biopharmaceutical industry in Korea: A questionnaire-based study

“…Regarding sociodemographic factors, employees in small-sized or venture companies show higher turnover intention rates because social evaluation is relatively lower than that of large companies, and the welfare of such companies is also poor (36). This nding is similar to that of a previous study (12) that found a negative relationship between company performance and size and employee turnover. Women were more likely to leave their jobs than men in sales or marketing positions.…”

“…Many studies have been conducted on turnover intentions in the pharmaceutical industry. Among them, several studies (10)(11)(12) have identi ed the factors that affect employees' turnover intention based on job or pharmaceutical company types. However, no study has targeted turnover intention in pharmaceutical companies only.…”

Employee turnover and the social outreach (breadth): international evidence from the microfinance industry

“…Several studies have highlighted employee turnover as a persistent challenge in most organizations, including microfinance institutions (MFIs) (Ahmed et al , 2015; Li et al , 2021). As a result, a voluminous number of studies have investigated its effect on the various performance dimensions of firms/institutions (Awwad and Heyari, 2022; Climek et al , 2022; De Winne et al , 2019; Hancock et al , 2013; Porter and Rigby, 2021). Based on these studies, two main arguments are presented on the relationship between employee turnover and firm performance.…”

“…Based on these studies, two main arguments are presented on the relationship between employee turnover and firm performance. Firstly, any level of employee turnover hurts firm performance due to monetary costs associated with the recruitment and training of new employees, loss of accumulated human capital and disruptions in social relations (Awwad and Heyari, 2022; Climek et al , 2022; Hossain and Mahmood, 2018; Wang and Sun, 2020). Moreover, when employees stay within the organization, it should give the organization substantial cost savings (Shipp et al , 2014).…”

Environmental Performance with Firm Size as an Intervening Variable

“…Company size determines stakeholders (Awwad and Heyari, 2022). Large companies tend to pay more attention to environmental conditions than small companies.…”