The determinants of employee turnover during the Covid crisis: Evidence from Belgium

Abstract

The objective of this thesis is to provide employers and employees with a comprehensive understanding of the determinants that could contribute to dismissals. As a result, both parties could take the initiatives to avoid such outcomes to the extent possible. During the coronavirus pandemic, various measures were implemented by the government to mitigate the spread of the virus in Belgium. The included minimizing travel, maintaining a distance of one and a half meters from others and wearing masks. Additional measures were also imposed on companies, such as limiting the number of individuals inside establishments, furnishing hand sanitisers, promoting teleworking and closing non-essential sectors. Given the impact of these measures on the finances of companies and individuals, additional support measures were implemented. These included an increase in unemployment allowances and a simplification of measures to access these benefits. Special allowances were provided to individuals who needed to take care of a child or disabled persons under a certain age who had no other solution than staying at home. A specific form of parental leave, known as “parental leave corona”, became effective and offered more favourable conditions compared to the existing standard parental leave. Workers were also allowed to take leave to get vaccinated or accompany someone without losing their remuneration. Furthermore, unemployed workers had the possibility to be trained. Programmes aimed at enhancing the skills and job opportunities of less qualified workers were implemented, enabling them to make the most of their unemployment period. Financial assistances were also introduced to support the training of individuals in internship positions and to promote the hiring of this kind of worker. Similarly, workers were encouraged to improve their skills in informatics through specific online training, to be able to work from home effectively. The measures implemented to reduce the spread of the virus and support Belgian companies and individuals served as the basis for formulating and testing hypotheses. In this thesis, the determinants of employee turnover during the pandemic that were examined include turnover, the financial structure of companies, the number of training hours and public versus private sector affiliation. To complete models and minimize the influence of other variables, some control variables have been chosen such as added value per employee, (non) current liabilities and return on assets Based on the analysis of companies selected from the Belfirst website, the findings indicate that turnover, training programmes and sector affiliation did not have the expected effect on employee turnover. However, the variables that exhibited a significant effect on employee turnover were added value per number of employees and the ROA followed by the solvency ratio and the self-financing ratio. It is important to notice that while this thesis explores certain determinants, there may be other factors that contribute to employee turnover.