NEWSRELEASE
For Release: July 26, 2007 Study Measures Employee Turnover In Large And Small Firms Documents Impact Of Wages And Benefits WASHINGTON, D.C. – Establishment size matters in determining employee
compensation and job tenure, concludes a study released today by the Office of
Advocacy of the U.S. Small Business Administration. The study found that all
other things being equal, employees of larger establishments have longer job
tenures than those working in smaller establishments. Moreover, the study found
that service and manufacturing occupations pay more in larger establishments as
well. Written with funding from the Office of Advocacy by John Hope and Patrick
Mackin of SAG Corporation, the study determined that each additional year of
tenure on a job reduces the probability of turnover by 81 percent. It also
established that the offering of benefits reduces the probability of an employee
leaving in a given year by slightly more than 26 percent. “The reasons for shorter job tenure and lower compensation in smaller
establishments are not yet well understood,” said Dr. Chad Moutray, Chief
Economist for the Office of Advocacy. “Smaller establishments tend to be
younger, and younger firms are more volatile. Their higher closure rate could be
a major factor in determining job tenure rates. More study is needed to fully
understand this phenomenon,” he said. The report, The Relationship Between Employee Turnover and Employee
Compensation in Small Business, analyzes a unique set of data drawn from the
National Longitudinal Survey of Youth gathered by the Bureau of Labor
Statistics. The Office of Advocacy, the “small business watchdog” of the federal
government, examines the role and status of small business in the economy and
independently represents the views of small business to federal agencies,
Congress, and the President. It is the source for small business statistics
presented in user-friendly formats, and it funds research into small business
issues. For more information and a complete copy of the report, visit the Office of
Advocacy website at
www.sba.gov/advo. ### The Office of Advocacy of the U.S. Small Business Administration (SBA) is an
independent voice for small business within the federal government. The
presidentially appointed Chief Counsel for Advocacy advances the views,
concerns, and interests of small business before Congress, the White House,
federal agencies, federal courts, and state policy makers. For more information,
visit
Contact: John McDowell, (202) 205-6941
john.mcdowell@sba.gov
SBA Number: 07-27 ADVO
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