Employee-Oriented CSR Practices as Strategic Retention Levers in SMEs: Evidence from the V4 Countries

Abstract

Background: Employee turnover represents a critical challenge for small and medium-sized enterprises (SMEs), particularly in an environment where sustainability and responsible management practices are gaining strategic importance. Existing literature suggests that environmental, social, and governance (ESG) factors influence employee satisfaction, loyalty, and retention; however, empirical evidence on their impact within SMEs remains limited, especially in Central European countries.

Purpose: The purpose of this paper is to examine the relationships between employee-oriented CSR practices (social ESG dimension) and employee retention outcomes. The study focuses on identifying which CSR-related practices most significantly influence employees’ decisions to remain with their employer in the V4 countries.

Study design/methodology/approach: An empirical study was conducted in March 2024 using data collected through an online questionnaire among SMEs in Slovakia, Czech Republic, Hungary, and Poland. Linear regression analysis was applied to assess the relationships between selected employee-oriented CSR factors and employee turnover.

Findings/conclusions: The results indicate that social ESG factors play a dominant role in employee retention. In Slovakia and Hungary, employee skill development and career growth planning emerged as the most influential factors, while corporate benefits were found to be most significant in the Czech Republic and Poland. The findings confirm that strategically implemented ESG practices can contribute to lower employee turnover in SMEs.

Limitations/future research: The study is limited by its cross-sectional design and reliance on self-reported data. Future research should employ longitudinal approaches and extend the analysis to other regions and firm sizes to further explore causal relationships.