Influence of Compensation, Work-Life Balance and Psychological Well-Being on Employee Retention: Evidence from an IT Company Based in Shah Alam Malaysia

Abstract

Employee retention is a critical concern for organizations seeking to sustain workforce stability and maintain competitive advantage. This study investigates the influence of compensation, work-life balance, and psychological well-being on employee retention in an Information Technology (IT) company based in Shah Alam, Malaysia. This study employs a quantitative research method using a structured questionnaire distributed to 81 employees. Findings from Pearson’s correlation analysis indicated that employee retention was positively and significantly associated with compensation, work-life balance, and psychological well-being. Results from the multiple regression analysis further showed that compensation was the strongest predictor of employee retention, followed by work-life balance and psychological well-being. These results underscore the integrated role of financial, structural, and emotional resources in influencing employees’ decisions to remain with the organization. This study contributes to the growing literature on retention by providing empirical insights from Malaysia’s IT company, emphasizing the need for competitive compensation, flexible work practices, and initiatives that strengthen psychological well-being. The findings offer practical guidance for HR managers and policymakers in designing holistic retention strategies that support a committed and stable workforce.