Occupational Stress And Turnover Issues In Public Accounting: The Mediating Effects Of Locus Of Control, Social Support, And Employment Expectations

Abstract

At the aggregate level, turnover costs firms in the accounting profession billions of dollars each year (Larkin 1995).  Though the costs of turnover vary widely from firm to firm, one study estimates that each separation costs firms $4,000 to $8,000 in training and recruiting costs (Roth and Roth 1995).  Further complicating the profession’s turnover dilemma, changing organizational structures and workforce demographics are forcing public accounting firms to update employee recruitment and retention programs. The increased importance of recruitment and retention efforts coupled with the detrimental effects of turnover have led researchers to gain a better understanding of the voluntary turnover process in public accounting.  The demanding and time-pressure nature of the public accounting work environment coupled with the profession’s lack of success in retaining women and minorities suggests that occupational stress may have an increasingly negative impact on the accounting profession. Through the development and testing of a behavioral-based theoretical model, this study attempts to expand our understanding of the turnover process that transpires in public accounting.  The study proposes that three factors act as mediators of occupational stress and subsequently impact employee turnover.  Specifically, locus of control (personality type), the perception of adequate social support (a source of additional information), and the bestowing of realistic employment expectations (knowledge acquired at hiring) are all modeled as buffers of occupational stress.  Results of a path analytic procedure support the theoretical model suggesting that the aforementioned constructs could become critical components of the accounting profession’s recruitment and retention processes.