A new study highlights the significant role of peer behavior within employee cohorts on turnover rates, offering actionable insights for businesses.
Innovative research led by the University of South Florida (USF) and the University of Cincinnati has unveiled compelling insights into how workplace cohorts — groups of employees who join an organization simultaneously — affect newcomer retention rates. This study offers valuable guidance for companies striving to reduce employee turnover and enhance workforce stability.
Cohorts are particularly prevalent in the military and professional services sectors, including law, accounting and consulting firms, and are increasingly utilized by Fortune 500 companies, such as Amazon and Walmart.
“Our findings highlight the need for strategic cohort management to improve retention,” co-author Amit Chauradia, an assistant professor at the USF Muma College of Business, said in a news release. “If companies listen to employee location preferences during the hiring process and foster a positive cohort experience, it’s likely they can reduce turnover risks.”
Published in the Journal of General Management, the study analyzed data from around 650 new employees across 32 cohorts at a global IT services firm. The data revealed a significant pattern: members of a cohort who witnessed their peers engaging in job-seeking behaviors tended to follow suit, often leading to their own eventual departure from the organization. The trend was less pronounced among those who held a strong preference for the organization’s geographic location.
Co-author Daniel Peat, an assistant professor in the Carl H. Lindner College of Business at the University of Cincinnati, emphasized the pioneering nature of their research.
“At the core of our approach is the belief that people are the most important asset in any organization,” he said in the news release. “Previous research on this topic mostly focused on collective turnover and organizational issues. Our research is some of the first of its kind to emphasize the importance of the contagion effect within cohorts.”
Building on existing theories of job embeddedness and turnover contagion, the study underlines how social bonds within cohorts can either anchor employees to their roles or expedite their exit. This insight is critical when considering the management of Gen Z, which makes up more than a quarter of the global workforce and has a 65% turnover rate within the first year on the job.
“This provides a fresh perspective on how peer behavior within cohorts drives retention patterns and offers organizations new ways to build a more stable, committed workforce,” added Chauradia.
For business leaders and human resources (HR) professionals, these findings underscore the benefits of viewing cohorts as interconnected social groups rather than a mere collection of individuals. Emphasizing geographic preferences during recruitment and nurturing positive cohort experiences could significantly boost employee retention.
Chauradia and Peat aim to build on this research by exploring strategies that organizations can employ to develop newcomers, fostering their growth, performance and long-term commitment.
The study also featured contributions from Koustab Ghosh, an associate professor at the Indian Institute of Management Rohtak in Haryana, India.
Source: University of South Florida