Do vacations and parental leave reduce voluntary turnover? A study of organizations in the ICT sector in Canada

Abstract

PurposeThis study examines the link between vacations, parental leave and voluntary turnover among Canadian organizations in the Information and Communications Technology (ICT) sector.Design/methodology/approachThe empirical analysis is carried out using firm-level data sourced from a survey that was completed by HR managers of 125 ICT firms operating in the province of Quebec (Canada).The organizational voluntary turnover rate was used and was obtained by dividing the number of employees who voluntarily quit an organization within the last year by the total number of its employees. Based on ordinary least squared estimates, results were generated by regressing voluntary turnover rate on vacation and parental leave.FindingsVacation, operationalized as the average number of annual vacation days, is negatively and significantly associated with the voluntary turnover rate of the ICT organizations surveyed. Parental leave, operationalized as the percentage of salary reimbursed during parental leave, does not significantly reduce voluntary turnover in the ICT organizations surveyed.Practical implicationsIn light of the results of this study, if organizations in the ICT sector, in Canada or abroad, desire to reduce voluntary turnover, compensating employees through the use of additional vacation days appears to be a viable approach.Originality/valueThis research constitutes an empirical test of the link between turnover and two compensation practices adopted by firms. To our knowledge, there is no prior scientific evidence on that subject in the Canadian ICT sector.