The Effects of a Short-Term Corporate Social Impact Activity on Employee Turnover: Field Experimental Evidence

Abstract

Short-term corporate social impact activities, wherein employees participate in firm-sponsored prosocial initiatives, are becoming increasingly common. However, it remains unclear whether short-term social impact activities affect employee behavior in a manner of relevance to the firm. Theoretically, arguments could be made in favor of or against the likelihood that such short-term activities would increase firm-benefitting employee behavior. We utilized data from a randomized field experiment implemented at a large Latin American bank to examine whether a short-term social impact activity can be beneficial for firms, focusing on one important outcome: turnover. Newly hired employees were randomly assigned to a short-term social impact activity as part of the new employee onboarding process or not. Notably, we find causal evidence that a day-long, short-term engagement reduced employee turnover almost a year later. We explore potential mechanisms behind this effect and find that employees’ perceptions of organizational justice help to explain the effects of the intervention on turnover. We also explore heterogeneous treatment effects and find more substantial effects for male, rather than female, employees. This paper advances the literature on the implications of corporate social responsibility (CSR) practices by shedding light on the causal mechanisms through which a theoretically underexplored and practically relevant type of CSR activity can benefit organizations and their employees. This paper was accepted by Lamar Pierce, organizations. Funding: The authors acknowledge funding from NSF through the Learning the Earth with Artificial intelligence and Physics (LEAP) Science and Technology Center (STC) (Award #2019625). Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2022.01517 .