How does perceived investments in employee development affect turnover intentions?

Abstract

There is a debate in the managerial literature on the risks for the organization related to investments in employee. Building on attribution and social exchange theories we explore the relationship between perceived investments in employee development (PIED) and turnover intentions by testing simultaneously different paths where affective commitment, perceived internal employability and perceived external employability are included as potential mediators. The study adopted a mixed method approach comprising a survey of 336 employees and 19 semi-structured interviews with the HR staff undertaken across two private companies. The results show that the overall effect of PIED on turnover intentions is negative and it is fully mediated by external employability and affective commitment, while the path through internal employability was not supported. More specifically, PIED increases commitment, which in turn limits the risk of turnover. Although perceived external employability is positively associated with turnover intentions, PIED seems to contain this effect, by negatively affecting the employees’ perceptions of marketability in the labour market. The multy-group analysis confirmed the overall path from PIED to turnover intentions, while some organizational conditions affect the relationship between PIED and perceived employability. The study supports the assumptions of the social exchange theory in explaining turnover behaviour as consequence of employee development support and, at the same time, it questions the existence of the employability paradox not finding a turnover risk via perceived external employability.