When Leader Departures Invoke Employee Turnover

Abstract

Extending Shapiro, Hom, Shen and Agarwal’s (2016) theory on how voluntary departures by leaders initiate turnover among followers (aka “leader-departure [LD] effect”), we investigated the robustness of the LD effect and its potential moderators. Using Big Data (sampling over 100,000 employees across ten years), Cox regression (controlling a multitude of covariates) revealed that subordinates’ turnover hazard increased fivefold when leaders quit. We also determined that leader effectiveness strengthens the LD effect. By contrast, we found that subordinates who received higher performance reviews, were recently promoted, or earned higher total compensation more likely to quit when leaders exit. Our findings sustain Shapiro et al.’s model, while disputing job embeddedness theory as leader embedding actions failed to attenuate LD effects.