WHEN DOES CORPORATE SOCIAL RESPONSIBILITY REDUCE EMPLOYEE TURNOVER? EVIDENCE FROM ATTORNEYS BEFORE AND AFTER 9/11

This study places important boundary conditions on the generally accepted notion that CSR will reduce turnover. Our primary argument is that CSR will be most effective at reducing turnover that is motivated by a preference for more meaningfulness at work. We find empirical support for this idea using microdata on attorneys employed by large law firms. We find that firms with higher levels of CSR have moderately lower rates of turnover to startup law firms and turnover through occupation changes, moves which are more likely to be motivated by a preference for meaningfulness than moves to nonstartup law firms. Strikingly, the retention benefits of CSR are much stronger after attorneys experience mortality-related shocks that likely cause them to reevaluate their jobs (i.e., for New York City-born attorneys following the 9/11 terror attacks). To our surprise, we also find that firms with higher levels of CSR experience higher turnover rates to nonstartup law firms. In addition to our arguments about the importance of meaningfulness, the study provides two important extensions to work examining CSR and turnover: (1) it may be useful to view the CSR-turnover relationship through a risk-management lens, and (2) investments in CSR may increase employee departures from organizations under certain conditions.