Marsuki Marsuki, Yuswari Nur

Employee Engagement as a Pathway to Employee Retention: The Role of Employee Well-being and Work-Life Balance in the Banking Sector

Introduction

Employee engagement as a pathway to employee retention: the role of employee well-being and work-life balance in the banking sector . Discover how employee well-being, work-life balance & engagement drive retention in the banking sector. This study on BNI Makassar uses SEM-PLS to offer key HR strategies.

Abstract

Employee retention has become an important challenge in the banking industry amid digital transformation and changing workforce expectations. This study examines the effects of Employee Well-being and Work-Life Balance on Employee Retention through Employee Engagement among employees of BNI Makassar. A quantitative approach was employed using survey data collected from 148 employees selected from a population of 235 employees. Data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4. The findings reveal that Employee Well-being and Work-Life Balance positively and significantly affect Employee Engagement and Employee Retention. Employee Engagement also has a significant positive effect on Employee Retention and partially mediates the relationships between Employee Well-being and Employee Retention as well as between Work-Life Balance and Employee Retention. Employee Well-being emerged as the strongest predictor of Employee Retention. These findings indicate that organizational efforts to improve employee welfare, create a supportive work environment, and promote work-life balance can strengthen employee engagement and enhance retention. The study contributes to the human resource management literature by providing empirical evidence on employee retention mechanisms in the banking sector and offers practical implications for developing sustainable human resource strategies.

Review

This study addresses a highly pertinent issue in contemporary human resource management: employee retention within the banking sector, a challenge exacerbated by digital transformation and evolving workforce expectations. The research aims to explore the complex relationships between employee well-being, work-life balance, employee engagement, and their ultimate impact on retention. Utilizing a quantitative approach with survey data from 148 employees at BNI Makassar and employing Structural Equation Modeling–Partial Least Squares (SEM-PLS), the methodology appears robust and suitable for uncovering the hypothesized linkages among these critical constructs. The findings presented are compelling and offer significant insights. The study successfully demonstrates that both employee well-being and work-life balance positively and significantly influence employee engagement and, directly, employee retention. Furthermore, employee engagement is confirmed to have a significant positive effect on retention and, critically, acts as a partial mediator in the relationships between employee well-being and retention, and between work-life balance and retention. A particularly salient finding is the emergence of employee well-being as the strongest predictor of employee retention, underscoring its paramount importance in the banking context. This research makes a valuable contribution to the human resource management literature by providing empirical evidence on employee retention mechanisms, specifically within the banking sector. The practical implications are substantial, strongly advocating for organizational efforts focused on improving employee welfare, fostering a supportive work environment, and promoting work-life balance as key strategies to strengthen employee engagement and enhance retention. While the study is localized to one institution, its robust findings offer a strong foundation for developing sustainable HR strategies and warrant further exploration across broader banking landscapes.

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