A growing literature suggests that workers’ financial insecurity (or perception that their financial resources are insufficient) undermines job performance, hindering organizational objectives. We argue that the organizational costs of financial insecurity do not end there. Based on classic and contemporary models of turnover, we hypothesize that employee financial insecurity predicts both voluntary and (potentially unproductive) involuntary turnover above and beyond compensation. Further, we draw on attribution theory to argue that perceived negative (positive) changes in the worker’s financial position also contribute to (forestall) turnover above and beyond state levels of financial insecurity, but only when the cause of the change is attributed to the employer. We test these arguments using data from a longitudinal national panel containing financial security and job transition data across more than 60,000 person-years. Our results indicate that highly financially insecure workers are nearly twice as likely to leave (voluntarily or involuntarily) than more secure workers, and changes in financial security also predicted turnover. In sum, this paper identifies multiple mechanisms through which financial insecurity impacts voluntary and involuntary turnover, offering further evidence that organizations contribute to the financial insecurity of their employees to their own detriment.
