Average employee tenure, voluntary turnover ratio, and labour productivity: evidence from Japanese firms

Using Japanese firms' data, this study shows that voluntary turnover ratio is negatively related to firm tabour productivity. While recent studies have reported the negative influence of turnover on organizational performance (Kacmar et al., 2006; Shaw et al., 2005a), they analysed only US samples. Our study contributes to researchers' efforts to generalize the relationship between voluntary turnover and organizational performance. Turnover is detrimental to labour productivity as it reduces the stock of firm-specific human capital that a firm retains. Findings suggest that firm average employee tenure mediates the relationship between voluntary turnover and labour productivity.