What factors influence Employee Retention (ER)?

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Research Analysis by Consensus

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Introduction

Employee retention (ER) is a critical aspect of human resource management, as it directly impacts organizational success and competitiveness. Understanding the factors that influence ER can help organizations develop effective strategies to retain their valuable employees. This synthesis explores various factors influencing ER based on multiple research studies.

Key Insights

Performance Appraisal and Training & Development:
- Performance appraisals and training and development are significant factors in employee retention. In the IT sector, performance appraisals have a more substantial impact, while in the banking sector, training and development are more influential.
Work Environment and Organizational Support:
- A supportive work environment (SWE) positively influences ER. Organizational commitment (OC) and person-organization fit (POF) mediate this relationship, enhancing retention.
- A positive working climate and opportunities for learning and development encourage employees to stay with the organization.
Job Satisfaction and Affective Commitment:
- Job satisfaction and affective commitment are crucial mediators between ER factors and turnover intention. High levels of job satisfaction and affective commitment reduce turnover intentions.
Compensation and Financial Rewards:
- Financial rewards and competitive compensation are significant motivators for employee retention. Employees are more likely to stay when they perceive their pay as fair and competitive .
Career Development and Opportunities:
- Career development opportunities, including lifelong learning and capacity building, are critical for retaining employees. Organizations that invest in their employees' career growth see higher retention rates .
Work-Life Balance:
- Work-life balance is a significant factor in ER. Employees who can balance their work and personal lives are more likely to remain with their organization.
Employee Engagement and Psychological Factors:
- Employee engagement (EE) has a positive relationship with ER. Psychological capital (PsyCap), control at work (CAW), and job satisfaction (JS) mediate this relationship, enhancing retention.
Leadership and Management Support:
- Effective leadership and management support are crucial for ER. Employees are more likely to stay when they feel supported and recognized by their leaders .

Conclusion

Employee retention is influenced by a combination of factors, including performance appraisals, training and development, supportive work environments, job satisfaction, compensation, career development, work-life balance, employee engagement, and effective leadership. Organizations that prioritize these factors can develop robust retention strategies, ensuring they retain their valuable employees and maintain a competitive edge.