Employee retention: Effect of compensation, work stress, and job satisfaction - A case study in an edible bird's nest company

Abstract

This study was conducted to measure compensation factors and job stress on job satisfaction that may affect employee retention rates. A case study was conducted on a swiftlet company by conducting a questionnaire-based survey to collect data and information from 112 employees in the production division as the sample of this study. Compensation and job stress factors were determined as independent variables, employee retention variable as the dependent variable, and job satisfaction as the intervening variable in analyzing the survey data with the Structural Equation Modeling technique in Smart PLS 3.0. The study found that compensation positively and significantly affects job satisfaction and employee retention. Furthermore, the study results prove that job stress has a negative effect on job satisfaction and employee retention. Therefore, job satisfaction can also have a positive and significant impact on employee retention. However, let us look more deeply at the demographic aspect of the respondents in the group of employees. For employees who already have children, job stress variables do not significantly affect employee retention. In addition, job satisfaction variables do not significantly affect employee retention for workers in the age group below 25 years and the compensation variable does not significantly affect the unmarried employee.