Corporate social responsibility on worker turnover rate and worker turnover cost: the role of symbolic image dimensions and the unemployment rate

Abstract

Purpose

This study aims to examine the relationship between corporate social responsibility (CSR) and worker turnover rate (WTR) and worker turnover cost (WTC) in Vietnamese garment companies, using the mediating role of symbolic image dimensions (SID) of employer image and the moderating role of unemployment rate.

Design/methodology/approach

This study uses Signaling Theory and Job Embeddedness Theory as theoretical frameworks to examine the mediating role of SID and the moderating role of the unemployment rate on the link between CSR and WTR, as well as the associated cost. Data from 119 Vietnamese garment companies are analyzed using structural equation modeling – AMOS software.

Findings

The findings suggest that CSR has a direct adverse effect on the WTR and an indirect effect on WTC through WTR. The results also indicate a direct relationship between the level of CSR adopted by companies and workers’ perception of the symbolic attributes of their company’s employer image as sincere, innovative, competent and prestigious. This, in turn, leads to a reduced rate of worker turnover. In addition, this study discovers the moderating influence of the region’s unemployment rate on the correlation between companies’ CSR and WTR.

Practical implications

The results indicate that companies should view CSR as a strategic tool to obtain better performance by achieving a win-win state of affairs with their workers. It also implies the influence of external economic factors on the relationship between CSR and worker turnover.

Originality/value

This study contributes to the literature by highlighting the economic benefits of CSR and the SID.