The role of paid time off, flexible scheduling and job satisfaction in voluntary turnover

Employers today struggle with how to retain workers, yet research is not clear on how specific strategies lessen voluntary turnover. The study’s objective is to clarify the relationship between paid time off and voluntary turnover. In particular, we consider the mediating effect of job satisfaction and the interaction effect of flexible scheduling.

Through a longitudinal quantitative design, we are able to isolate the association between paid time off and voluntary turnover with logit regression and fixed effects estimations, using the National Longitudinal Survey of Youth (NLSY97). We further assess the likelihood of intervening and interacting variables on the focal relationship.

Our data suggest paid time off is associated with fewer voluntary resignations, but not through the mediator of job satisfaction. Flexible scheduling is also associated with fewer resignations, though the variables of paid time off and flexible scheduling do not interact. Further, paid time off had a gender effect: men who were offered paid time off were associated with a 41% decrease in voluntary turnover, whereas women were associated with a 25% decrease. In summary, we find PTO influences voluntary turnover, but this relationship is not mediated by job satisfaction or moderated by flexible scheduling.

The role of employee benefits on voluntary turnover is understudied and not well understood, particularly as to whether voluntary turnover is impacted by paid time off through job satisfaction or as a measure of necessity. Furthermore, previous literature has not considered how contemporary benefits, such as flexible scheduling, work to complement or substitute, the effects of paid time off.