Investigating Employee Turnover in the Construction Industry: A Psychological Contract Perspective

Abstract

Employee turnover has long been, and will continue to be, a significant concern in the construction industry. Organizations that can retain skilled employees have a stronger competitive advantage. In two independent studies in China and the Philippines, the authors investigated the role of psychological contract breach in predicting employee turnover in the construction industry. The results reveal that psychological contract breach results in emotional exhaustion, which in turn predicts employees’ turnover intentions (Study 1) and actual turnover (Study 2). The results further suggest that younger as opposed to older construction workers who experience psychological contract breach are more likely to experience greater levels of emotional exhaustion and exit their organizations. Accordingly, to retain skilled workers, construction organizations should understand and continuously manage employees’ psychological contract expectations and provide more support to younger workers. This paper offers significant theoretical contributions because it is one of the few in the construction literature that examine both employee turnover intentions and actual turnover from a psychological contract perspective.