Employee Retention Improvement of Pulp and Paper Companies in Indonesia

Abstract

Indonesia is the largest pulp and paper producer in Southeast Asia. One of the problems faced by the pulp and paper industry in Indonesia is high employee turnover. This study aims to analyze the factors that influence employee turnover and propose strategies to reduce turnover or increase employee retention in the pulp and paper industry. The endogenous variable in this study is turnover intention. Meanwhile, exogenous variables are work environment, compensation and benefits, training and development, performance appraisal, employee recognition, and job satisfaction. Research data was obtained through a survey of pulp and paper employees in Indonesia. The data was then analyzed using the partial least square structural equation model (PLS-SEM). The study results show that performance appraisal, training and development, work environment, and employee recognition affect employee turnover negatively and significantly. The strategies proposed to reduce turnover in the pulp and paper industry in Indonesia include the company providing free training according to the competencies needed, making bureaucratic rules simple and transparent, arranging gifts and awards programs for employee achievements, and creating measurable and transparent promotion programs.