Smoke-Free Laws and Employee Turnover

The purpose of the study is to examine the effects of smoke-free laws on employee turnover and training costs in one large national restaurant chain. Research regarding smoking and productivity costs has primarily focused on the smoking behavior of employees, their health, and labor market outcomes, rather than business operating costs such as employee turnover and training costs. The literature on employee turnover implies that exposure to secondhand smoke and dissatisfaction with workplace smoking policies may act as disamenities in the workplace that affect employee turnover. In a preliminary study, the Principal Investigator found that nonsmoking servers exposed to secondhand smoke at work were less satisfied with their policies than those who worked in smoke-free places. A time series design with treatment and control groups will be used. Data from employees in 75 Applebee's restaurants (currentN= 5,563) available from 1999 through the first two months of 2006 will be examined. There will be two treatment groups: one group of employees who worked at the restaurant both before and after a smoke-free law was implemented in the community (treatment group I) and another group of employees who worked in the restaurants located in smoke-free communities only after they became smoke-free (treatment group II). Employees in treatment group I will have experienced the shock of a new policy, both the anticipation and implementation of the new policy. Employees in treatment group II will experience working in a smoke-free environment the entire time. The control group will include employees who worked at a restaurant in a community without a smoke-free law. Data will be collected on separation (employee turnover), age, sex, ethnJicity, average weekly income, job tenure, type of job, labor market conditions, and restaurant training costs. The main source of data will be the monthly employment records of Thomas & King, a franchise operator of the 75 Applebee's restaurants. Data on county unemployment rates will be available from the Bureau of Labor Statistics. Applebee's also will provide data on employee training costs associated with employee turnover. The unit of analysis will be the employee, nested within the business and within their community of residence. To test the effect of smoke-free laws on employee turnover, panel data will be analyzed using logistic regression with fixed effects. Each employee-month will serve as a single observation. Fixed effects allow each individual to have a separate intercept value. The separate intercept will reflect employees' unchanging characteristics that influence the likelihood of separation from their job. To examine the effect of smoke-free laws on restaurant training costs, per worker costs will be multiplied by the reduction in the number of separations per month to estimate the total cost savings for Applebee's. If a decrease in employee turnover can be shown (which will ultimately reduce operating costs), the hospitality industry may be persuaded to support smoke-free laws in order to capture productivity gains and cost savings due to reduced training costs. The results of this study will be disseminated to professional and lay groups and the hospitality industry. A national media advocacy plan will be implemented in collaboration with Americans for Nonsmokers Rights and the Campaign for Tobacco-Free Kids. The findings from this study will provide information from the business cost perspective and will add to the growing body of knowledge on the economic impact of smoke-free laws.