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Information Management and Business Review (ISSN 2220-3796)
Vol. 16, No. 3(S), pp. 817-831, Sep 2024
817
Retaining Talent in Digital, Technology and Innovation Department: Key Factors Influencing
Retention at a GLC in Malaysia
Haney Shafira Abdul Halim1, *Dilla Syadia Ab Latiff2
1Faculty of Business and Management, Universiti Teknologi MARA, Malaysia & UEM Edgenta, Malaysia
2Faculty of Business and Management, Universiti Teknologi MARA, Malaysia
2023977079@student.uitm.edu.my, *dillasyadia@uitm.edu.my
Corresponding Author: Dilla Syadia Ab Latiff
Abstract: Employee retention is crucial for organizational success, especially in dynamic fields like Digital,
Technology, and Innovation. This correlational study investigated factors influencing employee retention
within the DTI department of a Malaysian GLC, guided by Herzberg's Two-Factor Theory. The study examined
the relationship between employee retention (dependent variable) and compensation & benefits, work-life
balance, career growth opportunities, and training & development (independent variables). Data was collected
from a diverse sample of DTI employees using a comprehensive survey and analyzed using Statistical Package
for Social Sciences (SPSS) version 29. The findings revealed no significant relationship between compensation
& benefits, work-life balance, or career growth opportunities and employee retention. However, a significant
positive relationship was found between training & development and employee retention. This study provides
insights into the unique factors affecting retention in DTI departments and offers practical recommendations
for creating a supportive work environment that enhances employee retention. Specifically, the study
highlights the importance of robust training and development programs in fostering employee satisfaction,
skills development, and ultimately, higher retention rates.
Keywords: Compensation and Benefits, Work-Life Balance, Career Growth Opportunities, Training and
Development, Employee Retention
1. Introduction and Background
Employee retention is widely recognized as a critical factor in the long-term success of organizations [Hanai,
2021; Nagalakshmi et al., 2023]. It reflects the level of commitment employees feel towards their company,
encompassing its values and beliefs [Krishnamoorthy & Aisha, 2022]. Recognizing the value of high-performing
individuals, organizations often prioritize strategies to identify and retain such talent [Aman-Ullah et al., 2021].
This emphasis on retention stems from the understanding that skilled and engaged employees are valuable
assets that contribute significantly to organizational success.
Beginning in early 2021, developed countries like the United States experienced a surge in voluntary employee
departures, a phenomenon that peaked in September 2021, widely known as the "Great Resignation" [U.S.
Bureau of Labor Statistics, 2021]. This period saw a record 4.4 million (3%) American workers leaving their
jobs. While the number of resignations decreased to 3.4 million (2.2%) by December 2023, the trend remains
a significant concern [U.S. Bureau of Labor Statistics, 2023]. This sustained pattern of employee turnover, even
amidst pandemic-related challenges, highlights a pressing issue requiring further investigation. Psychologist
Anthony Klotz, who coined the term "Great Resignation," suggests that events like the pandemic prompt
individuals to re-evaluate their life choices [Kaplan, 2021]. This perspective is echoed by Agovino (2021), who
posits that the pandemic's impact on the workforce in 2021, particularly during the recovery phase,
empowered employees to seek new opportunities.
In a similar scenario, the 'Great Resignation' has also occurred in Asia. As noted by Alistair Cox, the Chief
Executive Officer of Hays, the shortage arises as employees leave their current company in pursuit of more
appealing work environments offering better wages and increased flexibility (Kamei, 2022). Kamei also
mentioned that while the pandemic markedly hastened digitalization, indirectly led to a significant increase in
technology-related roles. This surge in demand is driven by the rapid adoption of digital technologies across
industries, compelling IT talent to actively seek new opportunities in more digitally driven work environments.
Besides that, the employee retention issue has also been reflected in a Robert Walters survey conducted in June
2022 among 2,638 professionals from 1,131 companies, covering six Southeast Asian countries: Singapore,
Malaysia, the Philippines, Thailand, Indonesia, and Vietnam. Among the professionals surveyed across
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Southeast Asia, 79% expressed the intention to resign in 2021.
When an employee leaves the organization, it significantly impacts the dynamics and performance of the
organization. This is supported by Pallathadka et al. (2021) highlighted that increased employee turnover
poses a serious challenge, as employees are integral to every business losing key personnel can significantly
impact organizational and financial growth, as well as overall stability. Moreover, employee turnover
undermines an organization's ability to maintain productivity, sustain operations, compete effectively in the
market, and achieve profitability (Al-Suraihi et al., 2021). It disrupts team cohesion, necessitates frequent
recruitment and training, and can lead to loss of institutional knowledge, all of which increase operational costs
and hinder long-term growth prospects. Hence retaining employees is essential for maintaining stability,
reducing costs associated with turnover, and developing sustainable growth within the organization.
Statement of the Problem
In Malaysia, the attrition rate rose to 16.2% in 2023, up from 14.9% in 2022, reflecting evolving talent
strategies and the persistent mismatch between talent supply and demand (Times, 2024). A digital talent
survey by the Strategic Change Management Office (SCMO) and the Social Economic Research Initiatives (SERI)
revealed that key tech roles, including Big Data Analytics, Data Science, Cybersecurity, Artificial Intelligence,
and Cloud Computing, often remain unfilled for over three months. This underscores the high demand and the
challenges in recruiting for these specialized skills. The inability to retain talent in these critical areas poses
significant risks and potential losses for companies (Birruntha, 2021).
A GLC in Malaysia faces significant challenges in retaining employees within its Digital, Technology, and
Innovation (DTI) department, where talent is highly sought after in the competitive job market. This reflects
the broader industry trend emphasizing the importance of digital and technological skills in the modern
business landscape. Over the past three years, encompassing both the pandemic and recovery periods, the DTI
department experienced notable attrition rates of 21% in 2021, 27% in 2022, and 17% in 2023. These rates
are considerably higher than those in other departments within the Corporate Support Division. Experts
suggest that a healthy organization typically maintains an attrition rate of 10% or less, depending on the
industry (Ercanbrack, 2023).
In the face of rapid advancements in automation and digital transformation, including the integration of
technologies such as artificial intelligence, data analytics, and blockchain, private enterprises are not only
compelled to adopt these innovations but also to retain employees with the specialized skills necessary to
effectively utilize them. Exit interviews with employees from the Digital, Technology, and Innovation (DTI)
department have highlighted key reasons for departure, including concerns about salary, limited career growth
opportunities, inadequate training, personal issues, and high-stress workloads. While numerous studies have
explored various factors influencing employee retention, this research specifically focuses on the relationships
between compensation and benefits, work-life balance, career growth opportunities, training and
development, and employee retention among DTI department employees at GLC. The findings will contribute
to the existing body of knowledge on employee retention and offer practical recommendations for enhancing
retention strategies.
Research Objectives
This study aims to examine the following relationships among employees in the Digital, Technology, and
Innovation departments at GLC:
• The relationship between compensation and benefits and employee retention.
• The relationship between work-life balance and employee retention.
• The relationship between career growth opportunities and employee retention.
• The relationship between training and development and employee retention.
2. Literature Review
Understanding the factors that contribute to employee retention is crucial for mitigating the adverse effects of
employee turnover. The Malaysia Employers Federation Salary Survey (2020) highlights the importance of
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retention strategies, including offering competitive salaries and benefits, providing training and growth
opportunities, and implementing flexible work arrangements (Murad, 2021).
Employee Retention
Employee retention refers to the strategic process of ensuring that employees remain with the organization for
the long term (Aman-Ullah et al., 2021). It is widely recognized as one of the most significant challenges facing
organizations today, as most businesses find it difficult to retain employees particularly talented employees
(Haddad et al., 2023). Understanding that the retention of employees serves as a linchpin for business success,
organizations are compelled to formulate and implement effective strategies to cultivate a workplace
environment conducive to sustained employee commitment. Effective management of employee retention is
essential for maintaining a turnover rate that is lower than industry standards (Kamselem et al., 2022).
Extensive research on this topic has reached a consensus that retention is a critical strategy for preserving
talent within an organization (Khan et al., 2020; Islam et al., 2022). Consequently, businesses that aim to retain
their employees must develop comprehensive strategies that address various factors, including financial
incentives, motivation, work environment, and health considerations (Aman-Ullah et al., 2021).
Compensation and Benefits
Employee benefits are a crucial component of overall compensation, distinct from salary, provided to
employees either in full or incrementally over time. These supplementary rewards extend beyond monetary
compensation and include insurance (such as group, health, family, and accident), post-retirement benefits,
sick leave, vacation, and educational funds (Siyal & Garavan, 2020). Compensation and benefits are also
classified as extrinsic rewards and they play a crucial role in retaining employees. It becomes a magic bullet
for management to boost employee engagement, and job happiness, and ultimately lead towards retention even
if they may increase operating costs (Hassan & Govindhasamy 2020). Plus, Watkins and Fusch (2022)
emphasized that employers can leverage compensation and incentives to attract and retain experienced and
high-performing employees.
Understanding the influence of compensation and benefits on employee retention has been a focal point for
both organizations and researchers. For instance, Islam et al. (2022) found that compensation played a
significant role in employee retention within the hospitality and tourism industry in Bangladesh. Similarly,
Sorn et al. (2023) underscored the importance of compensation in retaining employees, noting that those who
receive higher pay are more likely to remain committed to their organizations. These researches indicate that
employees receiving higher pay are more inclined to remain committed to their organizations. Commenting
further on this, it means an employee who feels valued both in their work and by the management are more
likely to stay with the company, especially when their needs are met through various benefits.
These findings lead to the formulation of the first hypothesis (H1) of this study:
H1: There is a relationship between compensation and benefits and employee retention among employees in
the Digital, Technology, and Innovation departments at GLC.
Work-Life Balance
Work-life balance refers to the degree to which employees are satisfied with both their job and family roles
(Bellmann & Hübler, 2020). It involves the interaction between various aspects of an employee’s life, where the
balance or imbalance can have significant implications for both personal well-being and society (Roopavathi &
Kishore, 2020). Recognizing the importance of work-life balance, organizations increasingly view it as a crucial
factor in retaining talent (Chawla & Singla, 2021). Post-pandemic, this has become more profound and this
impacts employee’s work duties, and social, personal, and family commitments (Chawla & Singla, 2021; Sharma
& Gupta, 2020).
To address the diverse needs of employees, there are five types of work-life balance arrangements: remote
work, flextime, job sharing, and schedules of fewer than 40 hours (Half, 2023). These arrangements empower
employees by providing them with control over their work schedules and workspaces. This not only facilitates
the management of non-job-related responsibilities but also indirectly contributes to creating a positive work
environment that fosters employee retention and loyalty to the organization (Half, 2023). Hence, to practice a
harmonious work-life balance, organizations can adopt diverse policies and practices. This includes refraining
from mandating overtime, discouraging the expectation of after-hours communication, introducing flexible
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work schedules, and promoting the uptake of reasonable vacation time. By implementing these measures,
employees gain ample time beyond their regular work hours to unwind, pursue personal interests, partake in
outdoor activities, and engage in enjoyable pursuits. This approach empowers employees to manage their
professional and personal lives effectively, thereby improving their work-life balance and bolstering their
commitment to remain with the company (Weng et al., 2023).
Research supports this view; for example, Sindhuja and Subramaniam (2020) found a significant relationship
between work-life balance and employee retention among bank employees in Sivakasi, India. Similarly, Aman-
Ullah et al. (2022) demonstrated that work-life balance positively influences employee retention and reduces
turnover intentions among doctors in public hospitals in Pakistan. This emphasizes the significance of
promoting work-life balance strategies in the organization to enhance employee retention and overall
workforce stability. This leads to the second hypothesis (H2) of this study:
H2: There is a relationship between work-life balance and employee retention among employees in the Digital,
Technology, and Innovation departments at GLC.
Career Growth Opportunities
The terms "career growth" and "career development" are often used interchangeably (Houssein et al., 2020).
Career growth refers to the continuous progress, experience, and skill acquisition in a specific field (Cabaya,
2023). While career growth generally refers to the cumulative progression of jobs throughout one's life, it also
encompasses broader aspects of professional advancement. Career development, on the other hand, involves
preparing employees for future responsibilities (Brown & Brooks, 1990). Similarly, career growth has been
described as subjective evaluations of a person's career during their job with several companies (Ng et al 2005).
For companies perspective, career growth holds significance, as a deficiency in advancement opportunities
ranks among the primary reasons employees resign from their positions. If retaining and engaging employees
is a priority for an organization, emphasizing and prioritizing career growth serves as an excellent starting
point (Wooll,2022). Concerning career growth opportunities, managers or organizations must engage in one-
on-one discussions to understand their employees' career growth aspirations. Many employees express that
discussions about career growth are rare in the workplace, and some lack career goals due to their intense
focus on tasks, often driven by heavy workloads (Cabaya, 2023).
Further empirical research indicates that career growth opportunities significantly enhance employee
retention. Tetteh and Asumeng (2022) found that career development programs substantially improved
retention in Ghanaian companies, while Hussein et al. (2020) observed a positive impact on retention in
Djibouti's financial sector. These findings suggest that offering career growth opportunities is crucial for
reducing turnover. Therefore, the third hypothesis (H3) is as follows:
H3: There is a relationship between career growth opportunities and employee retention among employees in
the Digital, Technology, and Innovation departments at GLC.
Training and Development
Training and development refer to the process of acquiring or transferring the skills, abilities, and knowledge
necessary for performing a specific task (Sepahvand & Khodashahri, 2020). Cultivating new skills and
knowledge in the workplace becomes paramount as organizations strive to adapt to evolving technologies,
market trends, and global challenges (Al Kassem, 2021). This necessity arises so that the organization's goal
can be aligned with the constant changes in the environment and technology. Companies that invest in training
and development often experience higher employee retention, as these initiatives enhance employee
capabilities and creativity, benefiting both the individual and the organization (Nguyen & Duong, 2020).
The importance of training in retaining employees is well-documented. For instance, Elsafty and Oraby (2022)
found that training and development directly and positively influence employee retention in Egypt's private
sector. This finding is supported by Aleem and Bowra (2020), who conducted a study on employee retention
across various sectors, including public, private, foreign, and Islamic banks. The study revealed a significant
impact of training and development on both employee retention and commitment. However, it is worth noting
that a separate study conducted in Pakistan with 130 participants across different banks indicated either no or
very minimal relationship between training and development and the retention of employees (Aleem and
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Bowra, 2020). These diverse findings highlight the need for a nuanced understanding of the relationship
between training and development initiatives and their impact on employee retention in different contexts
(Khan et al., 2020). This leads to the fourth hypothesis (H4) of this study:
H4: There is a relationship between training and development and employee retention among employees in
the Digital, Technology, and Innovation departments at GLC.
Underpinning Theory: Herzberg's Two-Factor Theory
Herzberg's Two-Factor Theory, also known as the Motivation-Hygiene Theory, provides a framework for
understanding employee retention. The theory divides factors into two categories: motivators (intrinsic factors
such as recognition, responsibility, and personal growth) that lead to job satisfaction, and hygiene factors
(extrinsic factors like salary, company policies, and working conditions) that, when inadequate, cause
dissatisfaction. For effective employee retention, organizations must enhance both motivators and hygiene
factors. While motivators increase job satisfaction and commitment, addressing hygiene factors is crucial to
prevent dissatisfaction and reduce turnover.
This dual approach is supported by research, such as studies by Islam et al. (2022) and Miligi et al. (2020),
which emphasize the importance of recognizing both motivators and potential areas of dissatisfaction to foster
organizational commitment. By focusing on both sets of factors, organizations can create a work environment
that not only retains employees but also promotes their engagement and loyalty, making Herzberg's theory a
valuable tool for guiding retention strategies.
In this study, particular attention is given to specific hygiene and motivator factors identified as crucial to
employee retention. For hygiene factors, the focus is on compensation and benefits, as well as work-life balance,
as these elements have been highlighted in the literature as significant contributors to retention. The Adecco
Group's Global Workforce of the Future report (Styr, 2022) underscores that while salary is a primary
consideration for employees contemplating a job change, work-life balance also plays a critical role in their
decision to stay with a company. Regarding motivators, career growth opportunities and training and
development are central. Providing opportunities for skill development and career advancement not only
aligns with Herzberg's theory but also meets the increasing demand among employees for continuous learning
and professional growth (Kang, 2021). By focusing on these factors, organizations can enhance job satisfaction
and employee retention, creating a more committed and engaged workforce.
Conceptual Framework
Figure 1 presents a conceptual framework that outlines the key elements and their relationships examined in
this study. Herzberg's Two-Factor Theory underpins the conceptual framework of this study, categorizing
compensation and benefits and work-life balance as hygiene factors, while career growth opportunities and
training and development are considered motivator factors. Employee retention is the dependent variable, and
the study investigates how these independent variables influence retention outcomes. By addressing both
motivators and hygiene factors, the study aims to offer a comprehensive understanding of strategies that can
effectively enhance employee retention and organizational commitment, aligning with previous research
(Rahman et al., 2020; Abdulkhamidova, 2021). The conceptual framework developed for this study is
illustrated in the following figure.
Figure 1: Conceptual Framework Guided by the Model of Two Factor Theory (1959)
Hygiene
Compensation and Benefit
Work-Life Balance
Motivator
Career Growth Opportunities
Training and Development
Employee Retention
Dependent Variables
H1, H2, H3, H4
Independent Variables
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This study aims to investigate the nature and strength of these relationships through empirical analysis.
Based on the conceptual framework, four hypotheses have been formulated:
H1: There is a relationship between compensation and benefits and employee retention among employees in
the Digital, Technology, and Innovation departments at GLC in Malaysia.
H2: There is a relationship between work-life balance and employee retention among employees in the Digital,
Technology, and Innovation departments at GLC in Malaysia.
H3: There is a relationship between career growth opportunities and employee retention among employees in
the Digital, Technology, and Innovation departments at GLC in Malaysia.
H4: There is a relationship between training and development and employee retention among employees in
the Digital, Technology, and Innovation departments at GLC in Malaysia.
This conceptual framework provides a comprehensive overview of the key constructs and the hypothesized
linkages that will be tested in the current investigation. The findings from this study are expected to contribute
to the existing literature and offer insights into the complex interactions among the variables of interest.
3. Research Methodology
This study employs a quantitative approach to identify factors influencing employee retention in the Digital,
Technology, and Innovation (DTI) department at GLC, Malaysia. The sample consists of all 80 employees within
the DTI department, selected through a census sampling method to ensure a comprehensive representation of
digital talent.
Data were collected using questionnaires, which provide direct insights into the variables of interest. The
analysis is conducted at the individual level, focusing on each employee's responses. Quantitative statistical
analyses are performed to derive findings and conclusions. Data analysis is conducted using the Statistical
Package for the Social Sciences (SPSS) Version 29, selected for its robust capabilities in handling quantitative
research data (Rowley, 2014). Hypotheses are tested using Multiple Regression Analysis. A summary of the
data analysis for each research question is presented in Table 1.
Table 1: Summary of Data Analysis
Research Question
Part From
Questionnaire
Data Analysis
RQ1: Is there any relationship between
compensation and benefits and employee retention
among employees in the Digital, Technology, and
Innovation departments at GLC in Malaysia?
Part B: Compensation and
benefit
Part C: Employee retention
• Descriptive Analysis
• Multiple Regression
Analysis
RQ2: Is there any relationship between work-life
balance and employees’ retention among employees
in the Digital, Technology, and Innovation
departments at GLC in Malaysia?
Part B: Work-life balance
Part C: Employee retention
• Descriptive Analysis
• Multiple Regression
Analysis
RQ3: Is there any relationship between career
growth opportunities and employees’ retention
among employees in the Digital, Technology, and
Innovation departments at GLC in Malaysia?
Part B: Career Growth
Opportunities
Part C: Employee retention
• Descriptive Analysis
• Multiple Regression
Analysis
RQ4: Is there any relationship between training and
development and employee retention among
employees in the Digital, Technology, and Innovation
departments at GLC in Malaysia?
Part B: Training and
development
Part C: Employee retention
• Descriptive Analysis
• Multiple Regression
Analysis
Pilot Study
To ensure the validity and reliability of the constructs in the questionnaire, a pilot study was conducted before
the distribution of the final version. A pilot study is defined as a preliminary test to evaluate the research
protocol, data collection instruments, sample recruitment strategy, and other research techniques, thereby
preparing for a larger-scale study (Hassan, Schattner, & Mazza, 2006). It allows researchers to refine research
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questions, identify optimal methods, and estimate the time and resources required for the full study (Ismail,
Kinchin, & Edwards, 2018).
For this pilot study, 40 questionnaires were distributed to employees in the Human Resources department at
GLC. Convenience sampling was employed to select respondents due to its ease of access and practicality
(Etikan, 2016). Respondents from this pilot study were not included in the final research sample. A total of 30
completed questionnaires were returned. The reliability analysis revealed acceptable Cronbach's alpha
coefficient values exceeded the minimum threshold of 0.7, indicating a satisfactory level of internal consistency
(as shown in Table 2).
Table 2: Reliability Analysis of the variables (n=80)
No
Variables
Number
of Items
Cronbach’s Alpha from
actual study (n=80)
Independent Variable
1
Compensation and Benefit
7
.810
2
Work-Life Balance
6
.789
3
Career Growth Opportunities
4
.852
4
Training and Development
4
.805
Dependent Variable
Employee Retention
8
.821
In Table 2, all variables, including the dependent variable, demonstrated Cronbach’s Alpha values of at least
0.789, indicating reliable measurements. "Career Growth Opportunities" achieved the highest Cronbach’s
Alpha of 0.852, reflecting excellent reliability. These findings are consistent with Lessa et al. (2020), who note
that a Cronbach’s Alpha value above 0.70 is considered reliable and internally consistent in research.
4. Results and Discussion
In the main study, 80 questionnaires were distributed, achieving a response rate of 100%, with all 80
respondents providing feedback. This excellent response rate suggests that the results are highly reliable and
consistent.
Profile of Respondents: Table 3 displays a summary of the characteristics of the total sample of employees in
the Digital, Technology, and Innovation department at GLC in Malaysia who participated in the study.
Table 3: Demographic Profile of the Respondents (n=80)
Demographic Variable
Category
Frequency (N)
Percent (%)
Gender
Female
18
22.5
Male
62
77.5
Age
21-30 years old
24
30.0
31-40 years old
41
51.2
41-50 years old
12
15.0
51 years old and
above
3
3.8
Marital Status
Married
60
75.0
Single
20
25.0
Working Experience
3 years and below
14
17.5
4 -8 years
24
30.0
9-11 years
10
12.5
12 years and above
32
40.0
Level of Education
Diploma
12
15.0
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Degree
61
76.3
Master
6
7.5
PHD
1
1.3
The sample is predominantly male and married, with a majority aged between 31 and 40 years old. Most
respondents possess a blend of extensive and moderate work experience and hold a degree. This demographic
analysis provides a comprehensive overview of the sample, highlighting the key characteristics that define this
group. This demographic analysis provides valuable insights into the respondents' profiles, ensuring that the
study's findings are grounded in a well-understood context of the sampled population.
Descriptive Statistics
Table 4 presents the means and standard deviations for both independent and dependent variables after factor
analysis. The independent variables include compensation and benefits, work-life balance, career growth
opportunities, and training and development, while employee retention serves as the dependent variable.
Table 4: Descriptive Statistics
No
Variables
N
Mean
Standard Deviation
Independent Variable
1
Compensation and Benefit
80
3.7839
.70390
2
Work-Life Balance
80
3.7188
.78872
3
Career Growth Opportunities
80
4.1031
.82456
4
Training and Development
80
3.8563
.77006
Dependent Variable
Employee Retention
80
3.7688
.74101
As shown in Table 4, "Career Growth Opportunities" recorded the highest mean (M = 4.1031) and standard
deviation (SD = 0.82456), indicating strong perceptions in this area even after factor analysis. Conversely,
"Work-Life Balance" had the lowest mean (M = 3.7188) and standard deviation (SD = 0.78872) among the
independent variables, yet it remains a significant factor. For the dependent variable, "Employee Retention"
had a mean of 3.7688 and a standard deviation of 0.74101, reflecting effective scores and indicating a robust
relationship with the independent variables.
Normality Analysis
Table 5 presents the normality scores for each variable following factor analysis. All variables exhibited normal
distribution characteristics, with skewness values ranging from -2.366 to -1.531 and kurtosis values from 2.119
to 6.906. These values fall within the acceptable ranges of skewness (-3 to +3) and kurtosis (-7 to +7), indicating
that the data for all variables adhere to the assumption of normality.
Table 5: Normality score for all variables after Factor Analysis
No
Variables
N
Skewness
Kurtosis
Independent Variable
1
Compensation and Benefit
80
-2.366
6.906
2
Work-Life Balance
80
-1.744
2.939
3
Career Growth Opportunities
80
-1.780
3.520
4
Training and Development
80
-2.353
5.490
Dependent Variable
Employee Retention
80
-1.531
2.119
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Pearson Correlation Analysis
Table 6 presents the results of the Pearson correlation analysis, which examines the relationships between the
independent variables—Compensation and Benefit, Work-Life Balance, Career Growth Opportunities, and
Training and Development—and the dependent variable, Employee Retention.
Table 6: Correlation Analysis
Variables
1
2
3
4
5
Dependent Variable
1
Employee Retention
Independent Variable
Compensation and Benefit
0.043
1
Work-Life Balance
0.034
.227*
1
Career Growth Opportunities
-0.025
-0.1
.287**
1
Training and Development
.283*
-0.114
-0.153
0.107
1
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
The analysis reveals that compensation and benefits have no significant impact on employee retention (r =
0.043, p > 0.05), suggesting that variations in compensation do not affect retention in this context. This finding
contrasts with Hassan (2022), who observed a positive relationship between reward and compensation
practices and employee retention in the retail industry in the Maldives, indicating that industry-specific factors
may influence these dynamics.
Work-life balance also shows no significant correlation with employee retention (r = 0.034, p > 0.05). This
suggests that increases in work-life balance for respondents did not influence employee retention. This lack of
significance may be influenced by the gender imbalance in the sample, where 77.5% of respondents were male.
Research by Franklin (2023) suggests that work-life balance is valued differently by gender, which may affect
the results. This discrepancy highlights the need to consider gender diversity in studies on work-life balance
and employee retention.
Similarly, career growth opportunities do not significantly affect employee retention (r = -0.025, p > 0.05). This
suggests that increases in career growth opportunities for respondents did not influence employee retention.
This finding is consistent with Frimayasa (2022), who reported that career development opportunities did not
significantly impact employee retention in the telecommunications sector in South Tangerang. It underscores
the importance of contextual factors in understanding the impact of career development on retention.
In contrast, training and development demonstrate a weak but significant positive relationship with employee
retention (r = 0.283, p < 0.05). This indicates that training and development are important factors influencing
retention. This result aligns with Kumari et al. (2022), who found a positive impact of training and development
on employee retention, and Aleem and Bowra (2020), who confirmed that training and development
significantly affect employee retention and commitment across various sectors. These findings collectively
highlight that while compensation, work-life balance, and career growth opportunities may not significantly
influence employee retention in this context, training and development play a crucial role in enhancing
retention rates.
Multiple Regression Analysis
Table 7 presents the results of the multiple regression analysis assessing the impact of compensation and
benefits, work-life balance, career growth opportunities, and training and development on employee
retention.
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Table 7: Multiple Regression Analysis
Independent Variable
Standardized Coefficients
t
Sig.
Beta
Compensation and Benefit
.049
.428
.670
Work-Life Balance
.094
.776
.440
Career Growth Opportunities
-.081
-.685
.496
Training and Development
.312
2.768
.007
R Square
.096
Adjusted R Square
.048
F
1.986
Sig. of F Value
.105b
Dependent Variable = Employee Retention *p value < 0.05, **p value <0.01
The results indicate that training and development have the highest standardized coefficient (β = 0.312, p <
0.05), suggesting it makes the most substantial unique contribution to Employee Retention when controlling
for other variables. Conversely, work-life balance** (β = 0.094, p > 0.05), compensation and benefits** (β =
0.049, p > 0.05), and career growth opportunities** (β = -0.081, p > 0.05) show less significant contributions.
The model explains 9.6% of the variance in Employee Retention (R² = 0.096), indicating that 90.4% of the
variance is attributable to factors not included in this study. The F-test result (Sig. = 0.105) suggests that the
overall model is not statistically significant.
Discussion
The results from employees in the Digital, Technology, and Innovation department at GLC in Malaysia concur
only with H4 which looks at whether there is a relationship between training and development and employee
retention (see Table 8). Therefore, training and development affect employee retention and this could be
influenced by the background of the sample in this study. A substantial proportion (40.0%) of employees have
12 years or more of work experience hence they may seek advanced training opportunities that align with their
career progression, given the necessity for digital talent to adapt to industry changes and maintain agility.
Additionally, the majority (76.3%) of the sample hold a bachelor's degree, which means they are educated
employees and consistently seek continuous training. Therefore, training programs offering specialized skills
or advanced degrees could be particularly appealing for them to remain in the organization. This finding is
compatible with studies conducted by Elsafty and Oraby (2022) and Xuecheng et al. (2022) that highlight the
significant role of training and development in enhancing employee retention. Effective training initiatives
appear to lead to longer employee tenure, benefiting both the individuals and the organization.
It can be assumed that these employees prioritize continuous training and development, reflecting their
commitment to self-improvement in response to the rapidly evolving digital and technological skills demanded
in the market. This highlights an opportunity for the organization to address retention challenges by enhancing
and supporting employees' professional growth initiatives through training and development.
Conversely, work-life balance, compensation and benefits, as well as career growth opportunities show less
significant contributions which lead to rejection of HI, H2, and H3 (see Table 8). This suggests that employees
may already be satisfied with their current compensation, work hours, and career progression, or these factors
may not sufficiently influence their retention decisions. The finding on work-life balance contradicts the
findings in Sindhuja and Subramaniam (2020) which investigates work-life balance among bank employees
and how its influence on employee retention within selected banks in a small district in India. The findings
reveal a significant relationship between work-life balance and employee retention. Upon closer examination
of the sample of this study, it becomes evident that the majority of respondents (77.5%) were male, comprising
62 male participants and 18 (22.5%) female participants. This gender distribution highlights a significant
imbalance, with male respondents outnumbering their female counterparts. This disparity suggests that
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perspectives and priorities regarding work-life balance may differ between male and female respondents,
potentially influencing the overall correlation results.
On that note, a study by Durham University Business School supports this notion, indicating that women place
a higher value on work-life balance compared to men, particularly at junior levels, but less so at managerial
levels (Franklin, 2023). Therefore, the predominance of male respondents in the sample may have contributed
to the finding that improvements in work-life balance did not impact employee retention, as the perspectives
of male participants may not fully reflect the preferences and considerations of female employees. This
contextual insight emphasizes the importance of considering gender dynamics when interpreting and applying
findings related to organizational policies and employee retention strategies.
The rejection of H1 which looks at whether there is a relationship between compensation and benefits and
employee retention also contradicts a study by Maru & Omodu (2020) where it was found that non-monetary
benefits had a moderate link with employee retention however monetary perks were found to have a strong
positive correlation. The authors advise management to focus on both kinds of benefit plans to successfully
encourage highly skilled employees to stay with the company. This means that, despite the population in this
study setting receiving a digital scheme premium as an additional allowance on top of their regular salary,
digital talent was still leaving the organization. This trend was observed even when compared to other
employees who did not receive this additional benefit. The digital scheme premium was intended to provide
extra financial incentives to retain valuable digital talent, recognizing their critical role in the organization.
However, the fact that these employees continued to leave indicates that monetary incentives alone are not
sufficient to ensure retention.
Table 8: Summary of Hypotheses
No
Hypotheses
Result
H1
There is a relationship between compensation and benefits and employee retention
among employees in the Digital, Technology, and Innovation departments at UEM
Edgenta.
Rejected
H2
There is a relationship between work-life balance and employee retention among
employees in the Digital, Technology, and Innovation departments at UEM Edgenta.
Rejected
H3
There is a relationship between career growth opportunities and employee retention
among employees in the Digital, Technology, and Innovation departments at UEM
Edgenta.
Rejected
H4
There is a relationship between training and development and employee retention
among employees in the Digital, Technology, and Innovation departments at UEM
Edgenta.
Accepted
5. Managerial Implications and Recommendations
Employee retention is paramount to the growth and success of any organization. Since the findings of this
study suggest that training and development have been identified as factors influencing employee retention,
the management of any company needs to develop a comprehensive training needs analysis. This analysis
should focus on identifying the specific training and comprehensive development needs of employees. Plus, a
long-term plan for employee development needs to be established to reduce performance gaps.
Training need not be in a formal setting like attending training classes or seminars, but employees could also
participate in job shadowing, coaching, mentoring, and project participation to enhance their skills as well as
gain new knowledge. Through training, organizations can ensure that employees receive the necessary support
to enhance their soft skills, technical skills, and functional skills. Additionally, furthering employees' training
is crucial as it provides them with valuable opportunities to expand their knowledge base and enhance their
job skills, thereby improving their effectiveness in the workplace (Herrity, 2024).
It can be assumed that when employers place high priority over continuous training and development,
reflecting their commitment to encourage self-improvement among employees. This is crucial in response to
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the rapidly evolving digital and technological skills demanded in the market. This highlights an opportunity for
the organization to address retention challenges by enhancing and supporting employees' professional growth
initiatives through training and development.
Conclusion
The objective of this paper was to establish the key factors influencing retention among Digital, Technology,
and Innovation departments in a GLC in Malaysia. It was found that training and development is the most
influential factor affecting Employee Retention. In contrast, compensation and benefits, work-life balance, and
career growth opportunities did not significantly impact Employee Retention in this study. Future research
could explore additional factors influencing employee retention, such as workload dynamics, organizational
culture, and leadership styles. Investigating these elements could provide a more comprehensive
understanding of employee retention strategies. Singh (2023) emphasizes the importance of considering a
holistic work experience, including job satisfaction and organizational culture, to retain talent effectively.
Expanding the sample to include digital talent from various organizations within the industry could offer
comparative insights and reveal industry-specific retention trends. This broader perspective would help
identify common challenges and effective practices across different digital talent environments, leading to
more robust retention strategies.
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