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Determinants of Employee Retention

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Chapter 4
Determinants of
Employee Retention:
A Study of Reality in Brazil

Melissa Rodrigues Ataide Silva

Instituto Superior de Gestão, Portugal

João Conrado de Amorim Carvalho

Unidade de Ensino Superior Dom Bosco, Brazil

Alvaro Lopes Dias

Instituto Superior de Gestão, Portugal

ABSTRACT
One of the biggest challenges faced by companies is the retention of employees. Studies undertaken in the
area indicate that the high turnover rate, especially characterized by voluntary dismissal, is motivated
by non-alignment of employees’ interests with company objectives. The author focused on identifying
which factors related to the employees and which factors related to the companies are determinant to
retain employees and reduce the rate of turnover. To answer this question, a survey was conducted
with a sample of 264 people, between employees and employers, treated by factor analysis. The results
showed that age, gender, and marital status are not important for the employees’ permanence and that
the promotion of training, opportunities for advancement, salaries, and fair benefits are more valued,
as well as the employee’s interest in ascending professionally.

INTRODUCTION

Employee retention is one of the major problems facing companies facing the competitive environment.
The big business challenge is to align your goals with the growing demand for a balanced organizational
climate that meets basic human needs and where work is synonymous with personal fulfillment and
fulfillment (Teixeira & França, 2013).

DOI: 10.4018/978-1-5225-7888-8.ch004

Copyright © 2019, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Determinants of Employee Retention

In this sense, managers are increasingly convinced that attracting and retaining good employees goes
far beyond paying the best salaries in the market. It is imperative to understand the factors that lead
people to stay in a job, since all business action requires financial and human resources, and the latter act
better when motivated. Thus, implementing an effective employee retention strategy helps the company
to ensure better performance by properly utilizing employee capital.
Emphasis is also given to the worsening of the shortage of skilled labor, which hampers the process
of replacing good professionals. Even when companies are able to identify skilled people, in many cases,
they are faced with the demotivation of employees when they do not perceive alignment between their
individual perspectives and company objectives.
Data from the Departamento Intersindical de Estatística e Estudos Socioeconômicos - DIEESE
(2014) show that the turnover rate, excluding dismissals on request, for death, retirement or transfer of
employees varied between 40% and 45% of admissions in the period of 2002 to 2012. These indices are
considered high, mainly because they refer to a cycle of economic expansion. The DIEESE identifies that
the most important reasons are: dismissal without just cause, termination of the contract and dismissal
on demand, which together represent more than 90% of the total. In 2014, reflecting the first signs of
the recession, the overall turnover rate jumped to 63.7%.
It should be noted that the loss of human resources causes not only recruitment and training expenses,
but also the discontinuation of activities. Thus, it is concluded that the best policy is to avoid turnover,
especially the volunteer, when the employees themselves decide to leave the company. From this reality,
the questioning that constitutes the problem of this research: what factors related to employees and what
factors related to the companies are determinant to retain employees and reduce turnover rate?
The research aimed to assess which factors are considered most important by employees and employ-
ers and to identify common and discordant points between them. In addition, it sought to verify if it is
possible to reduce the number of factors to a smaller set without losing the explanatory capacity of these
factors. The research was also intended to analyze the correlations between the factors and the level of
interdependence between them.

BACKGROUND

Human resources are the most important elements in the competitive process in which organizations are.
Establishing lasting advantages in the modern world is only possible when these advantages can’t be
imitated. Achieving this purpose depends on people, the ability to create, innovate, diversify and offer
unique experience to consumers. Das and Baruah (2013) and Ampomah and Cudjor (2015) corroborate
that the health and long-term success of any organization depends on employee retention. Therefore, it
is the prime task of management to encourage employees to stay in business for a long time.
Aguenza and Som (2012) emphasize that retention and employee involvement are fundamental to the
organization. This is because they are the driving force for achieving planned development and achieving
organizational goals and objectives.
According to Samuel and Chipunza (2009), turnover occurs when employees leave their jobs and
it becomes necessary to replace them, which entails costs for organizations. For this reason, Khan and
Aleem (2014) argue that retaining employees, especially the most talented, has become the major chal-
lenge for managers.

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Determinants of Employee Retention

The impact of turnover is not limited only to economic-financial performance, it also affects the so-
cial relations developed in the organization. The impact of turnover is not limited to economic-financial
performance, it also affects the social relations developed in the organization. From this perspective,
Levine and Moreland (1982) analyze that turnover is a threat to the efficiency of transactional memory
organizational systems. The loss of sharing internal opinions ends up implying a delay in problem solv-
ing, that is, the departure of experienced employees and the entry of new employees affects the whole
system of the organization.
Policies to reduce turnover, that is, to retain employees in companies, are a process that starts from
recruitment and, according to Aguenza and Som (2012), there is no deadline to complete.

MAIN FOCUS OF THE CHAPTER

Issues, Controversies and Problems

The turnover occurs for different reasons, which cover both job dissatisfaction and particular circumstances.
Concerning job dissatisfaction, cases related to: low pay, poor relationships with superiors, insecurity,
insalubrity, lack of recognition, inadequate time, problems with moving to employment, among other
causes. As regards the particular issues, it is important to mention the change of the place of work of
one of the spouses, the achievement of another job more interesting, the lack of knowledge or skills for
work or even the interest in starting a business of his own (endeavor). In any case, it is rare for people to
leave their jobs when they are satisfied and happy. In this respect, the following hypothesis was proposed:

H1: Fair and competitive wages and benefits, such as transportation, subsidized meal, health plan etc.,
are important factors for the maintenance of employees in the company.

Bisht, Chaubey, and Thapliyal (2016) report that the central point of the issue is the establishment
of links between the factors that influence turnover and the use of appropriate retention strategies. The
numerous problems associated with the workplace and the way employees evaluate the incentives and
promises made by the organization lead to a sense of compliance or violation of what became known
as a psychological contract.
Breaches of promise often lead to voluntary turnover, which is treated as a management problem,
as people become unhappy because they do not fulfill their aspirations at work. A survey conducted in
14 Brazilian companies in 2010 on the main attraction and retention factors of talent shows that 61%
of respondents consider the work environment a decisive factor for their stay or exit from a company,
losing only to the aspect salary (67%) (BPC Recruitment Experts, 2011).
Casino (2014), on the determinants of turnover in a company, informs the 2 main reasons reported
by employees to resign: the first is a larger salary offer offered by another company, accompanied by the
difficulty of adapting to the company, due to schedules, work place, scale, etc. (23.3%), followed by the
lack of opportunity for internal growth (13.3%). Behr and Behr (2002) identified insecurity as one of the
key factors for raising the turnover rate. Ampomah and Cudjor (2015), in turn, found that the main causes
of turnover are related to lack of promotion, job dissatisfaction, safety at work, existence of alternatives
outside the company and the organization of work itself incompatible with demographic characteristics

46

Determinants of Employee Retention

of the employee. To reduce the problem, they prescribed measures, such as recognition of good employee
performance, building a better relationship of trust, and developing people in organizations.
For Fernandez (2010), the main reasons for the permanence of an employee in a company ‒ considering
the internal factors ‒ good human resources management and a greater appreciation of human capital. In
turn, Franco and Matos (2010) argue that it is necessary to reflect on the commitment of the company to
the market, because if it has a high turnover, it will inevitably find greater difficulties in capturing and
selecting good employees. In this context, the following hypothesis was proposed:

H2: Policies for promotion and career advancement, job rotation, performance-based gains and rewards
(praise and recognition) are prime factors for turnover reduction.

Aguenza and Som (2012) warn that employees remain in companies when they receive motivational
advantages, such as bonuses. However, remuneration can’t be seen as the only retention factor. There
are other elements that may be more effective, such as benefit programs, flexible schedules, equity op-
tions, training, and the internal culture itself, which is probably the most relevant factor. The authors feel
that feeling as an integral part of the team, fosters a necessary connection with the organization’s vision
and direction, and makes people feel better working together. The authors suggest the use of reward
programs as one of the most effective ways of retaining employees. These programs should be applied
in conjunction with other factors, such as adapting job characteristics to employee expectations and
flexibility of schedules. In addition, career development opportunities, recognition, management style,
and an appropriate balance between work and personal life complement conditions that reduce turnover.
In addition, the trend towards professional qualification ‒ a modern phenomenon in organizations
‒ positive results on the growth of the company and its employees. In organizational practice, profes-
sional qualification brings financial and human benefits to both company and employees. It involves a
multiple process, which instigates the active participation of all members of the organization to achieve
a particular goal, which will benefit all. Developing competencies increases competitiveness, as well as
fostering talent discovery (Mourão, 2009).
Sciberras (2015) found that humanitarian companies share similar retention strategies. Some of them
implemented measures focused on social benefits, while others, in training and career, in recruitment
and improvements in working conditions.
Despite the incentives to professional qualification in companies, Mourão (2009) states that many
organizations are still focused on instruction and information. Managers perform few systematic actions
on specific training events, with rare investments in training, development and education, as such. In
this environment, it was proposed:

H3: The good working conditions, the possibility of a balanced life and the identity with the values and
beliefs of the company are factors motivating the permanence of the employees in the companies.

Arthur (1994) has identified in a previous paper (1992) that the variety of human resources policies
can be encompassed in six systems, which are grouped into two categories: cost reducers and commit-
ment maximizers. Das and Baruah (2013) argue that managers need to pay attention to factors such as
compensation and reward, safety at work, training and development, supervision support, culture, work
environment and fairness in the organization. The authors consider that employee retention factors can
be divided into three dimensions: social, mental and physical. The social dimension refers to the contacts

47
 
Determinants of Employee Retention

between employees and other people, both internal and external. The mental dimension consists of the
characteristics of work, where employees always prefer flexible journeys, tasks in which they can use
their knowledge and see the results of their efforts. The physical dimension refers to the fair payment.
From previous studies, it is possible to perceive some common factors among the researches. Reward
and recognition, for example, is a factor cited as more motivating than wage compensation. Winning for
the performance of a job well done is a much stronger retention factor than the simple salary increase.
When recognition comes from the boss and the work team, or even clients, it becomes a catalyst for
loyalty (Das & Baruah, 2013; Herpen, Praag & Cools, 2002). The same phenomenon occurs when the
employee is promoted or when participating in decision making (Herpen et al., 2002; Khan & Aleem,
2014). The authors go further, in reporting the importance of the balance between work and private life
and the involvement of employees in work. In the first case, balancing reduces stress and emotional ex-
haustion, promoting retention of employees, while in employee involvement with work retention occurs
to the same extent as employees feel part of the company.
Das and Baruah (2013) broaden their analysis by discussing the importance of factors such as employee
training and development, the leadership style practiced in the company and safety at work. Training
and development is considered one of the most important retention factors, in addition to ensuring better
performance in the execution of the work. Leaders’ behavior, in turn, raises the level of job satisfaction,
as well as job security. In this way, it was proposed that:

H4: Leadership style and a policy of open channels and use of good ideas are factors that promote the
permanence of employees in companies.
H5: Training policies and continuing education increase employees’ interest in staying in business.

Muir and Li (2014) pointed to the average age, the ownership, the female percentage, and the work
project that increases participation as retention factors. It was also pointed out that internal mobility poli-
cies (promotion) raise retention rates. The authors recommend that employers provide employees with
opportunities to perform new functions. A highly committed human resource system requires measures
to develop, between low and high level employees, the capacity to engage with organizational goals,
in addition to building a more incisive and less bureaucratic culture. In this way, it was proposed that:

H6: Age, gender and marital status are conditions that define the permanence of employees in companies.
H7: Experience, qualification and willingness to advance in the career are crucial to keeping employees
in the company.
H8: Working conditions such as the distance from the company to the employee’s residence, the means
of transport, the status of the profession are important for his or her stay in the company.

The conceptual model developed in this research is based on the research carried out by Sharma,
Mahendru, and Singh (2010) on the retention of employees in information technology industry (iTeS),
in north of India. The authors assumed that retaining competent and skilled employees became a source
of competitive advantage. In this way, companies that wish to be successful must implement policies
that aim to encourage employees to stay in the organization for as long as possible. The research aimed
to identify employee retention strategies, determine the significance of selecting HR practices to pro-
mote job satisfaction, to study the significance of differences between individuals and organizations in

48

Determinants of Employee Retention

selected factors, to examine the correlation between employee satisfaction and retention, and to identify
the different strategies adopted by ITeS.
Search results for Sharma et al. (2010) show that there is a wide range of employee retention strate-
gies in different organizations, classified into two categories: monetary and non-monetary strategies.
The authors realized that although companies use monetary strategies with great evidence (performance
linked to incentives, rewards, wage increases etc.), there are also a number of innovative non-monetary
practices (job rotation, job enrichment, exit interviews, participation in decisions, public recognition
etc.). It became clear that initial recognition is key to retaining manpower, which is why organizations
closely monitor the performance of new employees by providing them with weekly feedback and ensur-
ing a friendly environment.
The statistical findings have shown that in this sector the employee is better paid as he gains experi-
ence, and that the probability of friction is very high. Age and educational qualifications are relatively
significant factors for retaining employees, and marital status had an expressive result in a third of respon-
dents. Fair wages and performance-related incentives were the factors that emerged as most important in
employee retention, as well as non-monetary factors related to organizational values and beliefs. Finally,
the results also showed that the placement of women in specific jobs helps to retain employees of this
sex, as well as training and safety at work were aspects reported as factors capable of retaining female
employees. On the other hand, the provision of night service for women did not have a negative impact
in relation to other factors examined at work.
From the conceptual basis developed by Sharma et al. (2010), the methodology of this research was
structured.

SOLUTIONS AND RECOMMENDATIONS

The Method

To design this work, it was made a extensive bibliographic review applying a questionnaire to the man-
agers and collaborators, chosen at random.
The city of São Luís, capital of the State of Maranhão, located in the northeastern region of Brazil,
was adopted as a research territory. Data obtained from the Instituto Brasileiro de Geografia e Estatística
‒ IBGE1 (2016) reported that São Luís has 18,166 companies, which constitute the universe of research.
The definition of the sample took into account the teachings of Santos (2016) and Bruni (2011), being
fixed in 105 companies.
The questionnaire, composed of twenty-one questions, was elaborated using the Likert scale, from
the following answer alternatives: (1) Strongly disagree; (2) Partially disagree; (3) Not agree or disagree;
(4) Partially agree; (5) Strongly agree. This scale was chosen because of the ease it presents, both for its
construction and for the comprehension of the respondents. The questionnaires were answered individu-
ally, without interference from the researcher (voluntary responses), by 269 people, with 264 validations.
Of this total, 77 responses were from employers (29.17%) and 187 from employees (70.83%). Among the
respondents, 74 people identified themselves with the position of director (28.03%), 41, with the position
of manager (15.53%) and 149, with the role of collaborator (56.44%), were not registered references to
partners and outsourced. Responses were treated using factorial analysis.

49
 
Determinants of Employee Retention

The questionnaire was sent by e-mail and also through social networks (Facebook, Linkedin, Google+,
Instagram and WhatsApp), in order to reach a larger number of respondents. In addition, the method
provides faster speed to receive the answers, in a safe and economical way. The construction of the
questionnaire was based on the research of Sharma et al. (2010), which led to the division of the fac-
tors that help in the retention of employees in two groups: 1) factors related to the employee; b) factors
related to the company. Employee-related factors pertain to those elements intrinsic to employee condi-
tions, such as age, gender, experience, qualifications, marital status, family circumstances, willingness
to grow, and working conditions. The factors related to the company are those whose provision falls to
the company, such as salaries, additional benefits, promotion, benefits linked to performance, rewards,
training, continuing education, communication channels, leadership profile, industry rotation, good ideas
and values and organizational beliefs.
The next step at the end of the data collection was to evaluate the reliability of the questionnaire,
a task for which the Cronbach Alpha coefficient was used. Several authors establish as acceptable the
value of Cronbach’s alpha above 0.700 (Gliem & Gliem, 2003; Christimann & Van Aelst, 2006; Cortina,
1993; Tavakol & Dennick, 2011; Panayides, 2013). In this study, Cronbach’s alpha showed a score of
0.770, based on non-standardized indexes, and 0.803, based on standardized indexes, index higher than
the value of 0.700, revealing that the variables are appropriately structured for analysis.
The statistic of each item answered (mean and standard deviation) showed that the 5 answers with the
highest average in the items “Partially Agree” and “Totally Agree” established a ranking in which the
training offer came first, followed by availability for growth, professional ascension policy, fair wages and
the provision of additional benefits. It can be noticed that the respondents chose 17, out of the 21 items,
as significant to justify the permanence of the employees in the companies (almost 81% of the items
proposed in the questionnaire). Only 5 of these 17 items (less than 30%) relate to factors that are derived
from employees, while 15 (slightly more than 70%) refer to the factors that depend on the companies.
On the other hand, of the items with an average of less than 4, only the “Rotativity between functions”
(factor provided by the company) and the “Employee age” (factor derived from the employee) were in
the “I do not agree or disagree”. On the other hand, the “Gender” and “Marital Status” (both related to
the employees) had an average response of less than 3, therefore, in the range of “Partially Disagree” and
“Disagree Totally”, showing little relevance with regard to permanence of the employee in the company.
It was also observed that, among the ten highest average items, non-monetary items, such as training,
willingness to grow and ascending, prevailed in the first three places of the ranking. “Wages and benefits”,
the only monetary items in the top 10, appear in fourth and fifth place. These data provide indications
that the retention of employees is not determined primarily by remuneration or financial benefits. They
show that employees seek much more opportunities for self-development and quality of life at work, as
well as recognition and opportunity to be heard, as well as the desire that their ideas can be harnessed.
It seems clear from the frequency of responses that the option of trying to retain employees only by
granting financial benefits is not so important to them.
The factorial analysis used in this study is a type of multivariate analysis, designed to evaluate how
different variables are related, and if these can be reduced to a smaller set with little loss of information.
It should be considered that no indicator is capable of explaining a phenomenon in isolation, which puts
the factorial analysis in the condition of identifying the common variability dimensions of the phenom-
ena, identifying structures that can’t be observed directly (factors).
Tabachnick and Fidell (2007) consider that factor analysis should be used when there are hypotheses
about the underlying structure or when the researcher believes that some questions can be better ex-

50

Determinants of Employee Retention

plained by variables that do not go together (factors). Hair et al. (2005, p. 91) state that “factor analysis
is a generic name given to a class of multivariate statistical methods whose main purpose is to define
the underlying structure in a data matrix”.
In this research, the correlation pattern was measured by the Kaiser-Meyer-Oklin (KMO) test among
the variables, and met the one proposed by Figueiredo Filho and Silva Jr. (2010), which suggest 0.600
as a reasonable limit. The authors also recommend that the Bartlett Test of Spherecity (BTS) statistic
should be significant (p <0.05).
In order to extract the factors, this research followed the Principal Components Method (PCA) and
extracted the factors by the Eigenvalue Criterion or the Latent Root Criterion, or the Kaiser test. The
rotation of the factors was orthogonal. As results, only two pairs of factors had a correlation above 0.600
(Age x Gender and Gender x Marital status), both related to items in which respondents scored low aver-
age, indicating that these variables are not significant for the permanence of employees in companies.
The results of the Kaiser-Meyer-Olkin (KMO) test reached 0.799 (higher than the suggested value of
0.500) and the Bartlett sphericity test indicated that there was a sufficient relation between the indicators
for the application of factorial analysis (Sig less than 0.05).
The analysis of the anti-image matrices did not identify low correlations (less than 0.500), and it is not
advisable to exclude any variables. Likewise, the communalities test presented only a low value (Values
and Belief variables), not justifying further testing with its exclusion, since six variables explain almost
58% of the cumulative variance. At this point, it seems clear that the purpose of reducing the number of
factors, with minimal loss of information, is not adequate.
The hypothesis test was made based on the frequency of the answers obtained. Except for the hy-
pothesis H6 – Age, gender and marital status are conditions that define the permanence of employees
in companies, all other hypotheses were confirmed by the frequency of high responses to the “Partially
Agree” and “Totally Agree” alternatives in relation to the issues involved in each hypothesis. It should
be emphasized that the H6 hypothesis was refuted exactly because most answers were not concentrated
in the “Partially agree” and “Totally agree” answers. It was also found that employers and employees
do not consider the employee’s age, gender and marital status as determining factors for his stay in the
company.

Recommendations

The turnover in companies is a phenomenon that must be better analyzed and interpreted by the manag-
ers and scholars of the HR area. The treatment of the problem generally involves the pursuit of quality
management, focused on reducing costs. However, employees should not be allowed to stay in companies,
especially the most talented ones, because of the costs involved, since the investment made in this aspect
usually yields excellent results. For example, promoting employee empowerment involves costs, but
results in the expectation of a better performance of all the beneficiaries, which leads to the recovery of
investments made. Providing growth opportunities and rewarding employees for new challenges and the
results they provide are also easily recoverable costs. Therefore, this type of expense should not be an
impediment to an employee retention policy. In combating turnover, it is essential that the treatment of
employees be kept in balance, taking into account their real needs, so that productivity and profitability
will continue to grow, and the work environment will be satisfactory to all.

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Determinants of Employee Retention

FUTURE RESEARCH DIRECTIONS

The limitations of the present study, due in part to the use of electronic methods ‒ initially considered
facilitators of the process, and who ended up being tiresome ‒ revealed the importance of proper choice
of research methods. It was observed that the actors involved in the research did not show interest in
participating, either due to lack of knowledge (despite the explanations provided by the researcher) or
lack of time, or even lack of interest in the subject. Another limitation of the present study refers to the
fact that it was not possible to detail the reality of companies and employees from other regions.
Thus, to expand the analysis regarding the reality of turnover in companies, it is proposed that new
studies be undertaken in the area in question. Within this proposal, it is suggested to make some varia-
tions in the subject matter, which may heighten the deepening on the subject, in addition to mitigating
the limitations faced in this work, such as: a) Extend the universe of research to other Brazilian states
or other regions, in order to understand if the phenomenon repeats itself under different conditions; b)
Reinforce the analysis of the results, applying qualitative research, through a multiple case study, in order
to confirm the factors raised; c) Try to group the factors by more homogeneous groups, avoiding pos-
sible confusion on the part of the respondents, or even redundancies that could make the wrong answers.

CONCLUSION

It has long been known that one of the manager’s main challenges is to avoid turnover, and, more im-
portantly, to retain the organization’s top talent. This task becomes even more challenging in times of
economic crisis, since the most skilled people are usually harassed by competitors, who make them
tempting financial proposals. In order to prevent the evasion of their human resources, companies design
attractive packages, involving not only financial aspects, but a range of benefits that can keep their team
interested in remaining in business, even if market conditions are not the most favorable.
Thus, to investigate which factors are important to keep the employees in the companies and, thus,
not only to avoid turnover, but also to retain the best professionals, was the scope of this research. To
that end, we investigated 8 factors related to the employees and 13 factors related to the companies,
supported by a conceptual model developed from a study by Sharma et al. (2010), in companies of the
technology sector of India.
The results showed that training policy is the most important factor in retaining people in organiza-
tions. Then, and with many close scores, stand out the availability for growth, the politics of professional
advancement, salaries, additional benefits, valuing good ideas, promoting a balanced life, employee
qualification, openness of internal communication channels and continuing education. The results also
pointed out that 17 of the 21 factors surveyed received high scores, revealing their significant contribu-
tion to the turnover reduction, and that only 5 of them correspond to factors related to employees.
It is noticed that the reduction of turnover is a problem that can be reduced much more by the di-
rect action in the factors related to the companies than in the factors related to the employees. In other
words, it is more effective for companies to act on those variables that they themselves can control than
to require employees to fit the variables of their responsibility. The provision of training opportunities
was the best punctuated factor, proving to be the main component for retaining people in the company.
This is a function of employers, therefore an element of easy management if companies wish to retain
good employees. In this sense, developing a training policy that can meet the interests of the business

52

Determinants of Employee Retention

and, at the same time, the employees, can be an excellent opportunity to mitigate the high loss rate of
talented professionals.
The second and third most punctuated items are the employee’s willingness to grow within the job
and the opportunities for advancement. It is possible to understand that these factors are intrinsically
related. Employees will only be willing to grow if the company offers opportunities for advancement. It
seems clear that if there are no opportunities offered, the tendency is for the employee to settle into the
position he already has or, if he is talented, accept other job offers and leave the company. It is noted that,
although the willingness to grow is in second place in the frequency ranking, it depends on the offer of
opportunities. It is concluded that the company that wants to retain employees can act by offering op-
portunities to rise to those employees who are able and able to take on new challenges. It is important to
emphasize that these two factors and the training policy, which came first, are ahead of the fourth item,
which refers to fair and competitive wages, and also the fifth item, which refers to benefits, 2 monetary
factors which are always considered important in benefit packages.
Wages and benefits are factors that are also interconnected, and comprise actions that can be provided
by companies. In addition, it is possible to infer that training opportunities enable employees to seek
internal growth, and it is incumbent upon companies not only to provide such training but also to open
opportunities for advancement. The sequence of the first three factors selected is quite logical and justi-
fies the fourth and fifth factors (salaries and benefits), since the professional rise is followed by salary
increase and other attractions.
These findings confirm some hypotheses initially raised, such as H1 (fair and competitive wages
and benefits such as transportation, subsidized meal, health plan etc., are important factors for the
maintenance of employees in the company) and H2 (promotion and promotion policies career turnover,
job turnover, performance-based gains, and rewards are prime factors for turnover reduction). The H3
hypotheses (good working conditions, the possibility of a balanced life, and the identity with company
values and beliefs are motivating factors for employees’ permanence in the company) and H4 (leadership
style and open channels and the use of good ideas are factors that promote employees ‘permanence in the
company), as well as the hypothesis H5 (training and continuing education policies increase employees’
interest in staying in companies).
Hypotheses H7 (experience, qualification and career readiness are crucial to keeping employees in
the company) and H8 (working conditions, such as the distance from the company to the employee’s
residence, the means of transport and the status of the profession are important for the company’s stay)
were also confirmed. However, the hypothesis H6 (age, gender and marital status are conditions that
define the permanence of the employees in the companies) was refuted by the low index of positive
answers and lack of correlation between the variables.
The no confirmation of the H6 hypothesis can also be observed by the multivariate analysis (factorial
analysis), in which it was tested whether the different variables have relationship, and if it is possible
to reduce them to a smaller set without loss of quality in the information. Initially, it was possible to
verify that none of the factors is able, in isolation, to explain the permanence of the employees in the
company. Next, we attempted to analyze the existence of underlying factors not directly observable. The
application of the factorial analysis through the SPSS system produced the Matrix of Correlations, in
which two sets of variables were highlighted with correlation higher than 0,600. They refer to the Age
and Gender pair (0.607) and Marital Status and Gender (0.617), confirming the previous descriptive
analysis that these variables are not relevant for reducing the turnover rate.

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Determinants of Employee Retention

The model on which the factorial analysis was applied can only explain significant variance when
incorporating all the variables, which makes it clear that it is impossible to reduce the number of factors
to a smaller set without loss of quality in the evaluation. It is also noted that, in the descriptive analysis,
the factors were placed in order of punctuation and that the variation of score between the factors is very
small. This shows that all factors are equally important for the reduction of turnover and that there is no
way to stop considering the complete set, including those items that presented lower scores.
Thus, companies must have a structured system of people management, based on the idealizations
and needs of their employees. This system should provide conditions for studying and continuously im-
proving the working environment. The goal is to gain control over the maximum amount of information,
preventively reducing turnover. This is necessary because, when employee turnover is high, it reveals
significant costs of time and resources, impacting poor service quality, productivity and profitability. In
this regard, it is essential that productivity itself be carefully scrutinized by companies. The turnover is a
natural phenomenon, but only acceptable at a reasonable level, so that it does not interfere in a negative
way in the processes and development of the companies.

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ENDNOTE
1
IBGE is the official body of the Brazilian government that collects, manages and provides statisti-
cal data on the population, economy, geography and other information of all Brazilian cities (www.
cidades.ibge.gov.br).

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