Blessing or curse: impact of increasing market demand on employee stress and turnover intention

Purpose Building on the transactional theory of stress and the challenge-hindrance stressor framework, we investigated stress and turnover intentions among employees in organizations that experienced increased demand for their products and services during the COVID-19 pandemic, an external shock that strongly influenced market dynamics. Design/methodology/approach We suggested a conditional indirect effect linking increased market demands and turnover intentions, moderated by a climate for autonomy. To test our research model, we used a sample of 4,725 employees working in 318 South Korean firms that experienced increased market demand for their major products and services in 2021 while the country battled one of its worst-ever disease outbreaks. Findings In organizational climates with high levels of member autonomy, employees perceived increasing market demands as challenging and motivating and thus felt less stress, resulting in reduced turnover intention. Conversely, in organizations with low levels of member autonomy, the indirect effect of increased market demand on employees’ turnover intentions via stress was found to be not significant. Practical implications This study offers valuable insights on firms in the growth phase of their respective industries. Originality/value Research examining how market growth affects employee stress levels and turnover intentions remains limited; therefore, this study broadens the scope of research on employee turnover within dynamic environments by proposing organizational climate as a crucial factor enabling employees to effectively navigate these dynamics.