“Examining the Interrelationships among Employee Engagement, Job Satisfaction, and Retention Intention in the Retail Sector”

Abstract

Employee turnover, grueling work schedules, and fierce competition for talent are all significant hurdles in the retail industry that need to be addressed. The present study investigates the relationship between employee engagement, job satisfaction and employee retention intention in retail sector. Based on the social exchange theory and the job demands-resources model, the study examines the interplay between engagement and employee satisfaction, as well as the impact of employee satisfaction on their likelihood of staying with the company.

A cross sectional survey design was used and the data were analyzed in a quantitative manner. The data were gathered from 412 frontline/supervisory workers from various stores within large retail chains. Multi-item scales were validated for assessing employee engagement (cognitive, emotional, and behavioral), job satisfaction (intrinsic and extrinsic), and retention intention. To test hypothesized direct and indirect relationships, structural equation modeling (SEM) was performed, with demographic variables age, tenure, and employment status being controlled.

The findings suggest that employee engagement has a significant positive impact on job satisfaction, and job satisfaction significantly influences intention to leave. The relationship between engagement and retention intention is partially mediated by job satisfaction, and engaged employees are more inclined to remain in the organization when they are more satisfied with their job or workplace. Further analysis shows that these relationships are somewhat different for different levels of responsibility within a job, and for different shift types, suggesting some contextual differences in the retail business.

The results highlight the need to build engagement and satisfaction as two keys of the strategy to lower voluntary turnover in retail. The practical implications are such as meaningful work design, supportive leadership, recognition programs, and career-development programs. The study provides additional evidence on talent retention in a service-oriented industry and provides a basis for future longitudinal and multi-level research that will consider other mediators and moderators of the engagement–satisfaction–retention relationship.