Modelling Employee Retention in Small and Medium-sized Enterprises and Large Enterprises in a Dynamically Changing Business Environment

Gelencsér, Martin and Kőműves, Zsolt Sándor and Hollósy-Vadász, Gábor and Szabó-Szentgróti, Gábor (2024) Modelling Employee Retention in Small and Medium-sized Enterprises and Large Enterprises in a Dynamically Changing Business Environment. INTERNATIONAL JOURNAL OF ORGANIZATIONAL ANALYSIS. pp. 1-33. ISSN 1934-8835

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Abstract

Purpose – This study aims to explore the holistic context of organisational staff retention in small, medium and large organisations. It also aims to identify the factors affecting the retention of organisations of different sizes. Design/methodology/approach – The study implements an empirical test of a model created during previous research with the participation of 511 employees. The responses to the online questionnaire and the modelling were analysed using the partial least squares structural equation modelling method. The models were tested for internal consistency reliability, convergent and discriminant validity, multicollinearity and model fit. Findings – Two models were tested by organisation size, which revealed a total of 62 significant correlations between the latent variables tested. Identical correlations were present in both models in 22 cases. After testing the hypotheses, critical variables (nature of work, normative commitment, benefits, co-workers and organisational commitment) were identified that determine employees’ organisational commitment and intention to leave, regardless of the size of the organisation. Research limitations/implications – As a result of this research, the models developed are suitable for identifying differences in organisational staffing levels, but there is as yet no empirical evidence on the use of the scales for homogeneous groups of employees. Practical implications – The results show that employees’ normative commitment and organisational commitment are critical factors for retention. Of the satisfaction factors examined, the nature of work, benefits and co-workers have a significant impact on retention in organisations, so organisational retention measures should focus on improving satisfaction regarding these factors. Social implications – The readers of the journal would appreciate the work, which highlights the significance of employee psychology and retention for organisational success. Originality/value – The study is based on primary data and, to the best of the authors’ knowledge, is one of the few studies that take a holistic approach to organisational staff retention in the context of the moderating effect of organisational size. This study contributes to a comprehensive understanding of the phenomenon of employee retention and in contrast to previous research, examines the combined effect of several factors.

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