Employee Retention in the Service Industry in Malaysia

Abstract

This study aims to investigate the effects of work-life balance, work environment, and reward and compensation on employee retention in Malaysia. A total of 400 questionnaires were collected online from employees within the service industry in Malaysia. Partial least square structure equation modeling was used to test the model and hypotheses. The results reveal that work-life balance and work environment had a strong positive effect on employee retention, but reward and compensation had a much stronger positive effect on employee retention. This research provides unique theoretical contributions by investigating these factors in the midst of the COVID-19 outbreak as components of the reciprocal process between employee and employer, and their effects on employee retention. This study also provides vital insights to business organizations to consider designing effective employee retention plans for a successful business.

Challenges of Talent Retention: A Review of Literature

“…Al Badarneh et al (2019) mentioned that the current practice of working from home does contribute to stress, which directly impacts employee well-being and performance. This is also supported by Zainal et al (2022), who stated that there is a negative correlation between job-related stress and employee productivity. This proves that it negatively affects employees' motivation to perform their tasks.…”

“…There is a high expectation from stakeholders, especially the customers, which is constantly monitored by the regulatory bodies, causing the employees to have a high workload and work longer hours (Ashfaq et al, 2020). Employees exposed to stress over a long period can lead to burnout or cognitive impairments (Zainal et al, 2022). Burnout is described as a state of psychological and physical exhaustion derived from substantial involvement in challenging situations (Hakanen, 2018).…”

“…To see the complete license contents, please visit http://creativecommons.org/licenses/by-nc/4.0/ and engagement. A positive and supportive workplace environment is one of the critical factors that influence employees to stay longer in their companies (Zainal et al, 2022). Companies with a positive work environment will be able to attract and retain their employees and have the advantage to succeed and survive in the highly competitive market (Zainal et al, 2022).…”

Employee engagement during COVID-19 in Malaysia

“…Using Social Exchange Theory, the present study supports earlier studies and clarifies the roles of communication and transformational leadership in employee engagement in Malaysia. There has been a recent need for theoretical research pertaining to the reciprocal relationship between an employee and their organization (Zainal et al, 2022 ). As such, from a theoretical standpoint, our study has bridged the information gap regarding the development of an optimal framework for employee engagement.…”

Pengaruh Training and Development, Servant Leadership, Dan Reward Terhadap Employee Retention Di Mediasi Oleh Employee Engagement Pada Restoran Di Kota Batam

“…Reward merupakan preferensi dan prioritas yang dilakukan perusahaan untuk melakukan komunikasi terbuka dan memahami apa yang diinginkan oleh karyawan mereka untuk memastikan reward yang diberikan sesuai dan bermakna bagi mereka (Zainal et al, 2022). Reward ini seringkali digunakan sebagai insentif untuk memotivasi orang untuk bekerja lebih keras, mencapai tujuan, atau berperilaku sesuai dengan norma, nilai, atau tujuan tertentu.…”