Turnover prediction using attitudes towards benefits, pay, and pay satisfaction among employees and entrepreneurs in Estonia, Latvia, and Lithuania

This paper seeks to examine the efficacy of predicting turnover for employees and entrepreneurs from Estonia, Latvia, and Lithuania using attitudes towards benefits, pay satisfaction, pay, gender, and age across a four‐year time frame.

A survey that included information on attitudes towards benefits and pay satisfaction was used to collect data from 153 Estonian, 157 Latvian, and 146 Lithuanian employees and 243 Latvian, 103 Estonian, and 109 Lithuanian entrepreneurs. The turnover of the employees and business owners was then followed over a four‐year time period with assessments done each year allowing for an examination of temporal variations in the relationships over time. Actual salary/income data was also obtained from organizational records.

It was found that for the employee samples the classification rates increased slightly as compared to base rates over time (e.g. did better the longer the time period included), while for the employers the classification rates and R² values were relatively flat as compared to base rates. For the employee samples the R² values decreased over time. Attitudes towards benefits were generally significant predictors of turnover for employees and entrepreneurs over a four‐year time period while satisfaction with pay was typically significant for employees but not for entrepreneurs. It was also found that for the employees both equity and expectancy considerations were able to explain differences in turnover rates while for entrepreneurs expectancy theory considerations were more powerful than equity theory explanations.

The research is limited both by geography, job types, and the theoretical construct of turnover. Few studies have examined turnover among both employees and business owners, and few studies have explored the similarities and differences between the two.

Pay and benefits are important for employees. Pay seems to be important for attracting employees while benefits are important for retaining them.

This study examines turnover for both employees and entrepreneurs with a four‐year longitudinal design with data from three different countries – Estonia, Latvia, and Lithuania. Temporal variations in the relationships are also examined on a year by year basis. As employee retention has been an important factor in the Baltic region over the last two decades it is vital to understand how to retain employees.