Employee well-being and employee retention:
empirical study in an Indonesian company Hendri Ardianto1,*.
Gunawan Gusnadi1.
Indra Dharma1.
Datu Razali Datu Eranza2.
Do Huu Nguyen Loc3 1Buddhist Business and Management Department.
Jinarakkhita Buddhist College of Lampung.
Indonesia Faculty of Business.
Economics and Accountancy Universiti Malaysia Sabah.
Kota Kinabalu.
Malaysia 3Ho Chi Minh City University of Economics and Finance.
Vietnam Article info Article history:
Received: 22 August 2025 Accepted: 20 September Published: 2 October 2025 Keywords:
employee well-being.
employee retention.
workplace well-being.
Abstract This study aims to examine the influence of employee well-being on employee retention.
A quantitative survey method was employed to collect data from 154 employees out of a population of 250 in an agricultural product processing company.
A five-point Likert-scale questionnaire, validated and tested for reliability, served as the primary instrument for data collection.
The data were analyzed using descriptive and inferential statistics, including simple linear regression at a 0.
05 significance level using SPSS version 24.
The results revealed a significant and positive relationship between employee well-being and retention.
Employees who experience a higher sense of well-being are likelier to remain with the company.
Furthermore, longer tenure is associated with more stable levels of well-being and retention.
These findings underscore the importance of prioritizing employee well-being as a strategic approach to fostering loyalty and minimizing turnover.
Targeted managerial interventions, particularly during critical tenure periods, are essential for cultivating a sustainable and healthy work environment.
JEL classifications: J53.
M12.
M54 Citation:
Ardianto.
Gusnadi.
Dharma.
Eranza.
& Loc.
Employee well-being and employee retention: empirical study in an Indonesian company.
Global Advances in Business Studies, 4.
, 104-115, https://doi.
org/10.
55584/Gabs.
*Corresponding author: Hendri Ardianto hendriardianto80@gmail.
E-ISSN: 2828-8394
org/10.
55584/Gabs.
Introduction In today's competitive business world, success depends on more than just great marketing and innovative products.
It also comes down to a company's ability to effectively manage and retain its employees.
One of the most critical issues currently confronting organizations is the high employee turnover rate (Lorber & Dobnik, 2.
This challenge undermines operational efficiency and imposes financial costs, leading to the loss of valuable tacit knowledge (Gelencsyr et al.
, 2.
Therefore, employee retention has emerged as a strategic concern demanding substantial attention.
Within this context, employee well-being has been identified as a key factor influencing employees' intentions to remain with their organizations.
Well-being encompasses physical, mental, and social dimensions that significantly impact job satisfaction and organizational commitment (Farrell et al.
, 2.
Employees who feel healthy, valued, and supported in maintaining work-life balance are more likely to develop strong loyalty to their employers (Sypniewska et al.
, 2.
Recent surveys in Indonesia reveal that employee resignations are not solely attributed to unsatisfactory salaries.
Many other factors also contribute to the turnover, including limited career advancement opportunities, unsupportive corporate cultures, shifts in personal career aspirations, demands for greater work flexibility, dissatisfaction with company performance, and ethical misalignments (Chen et al.
, 2.
These findings highlight the need for a holistic approach to retention strategies beyond financial compensation.
Figure 1 ranks the reasons employees choose to resign, offering a clearer look at this multifaceted issue.
Seeking Better Non-Financial Benefits Dissatisfaction with Current Role Misalignment with Company Values Misalignment with Company Strategy Poor Current Company Condition Flexibility Salary Looking for Job Change Work Life Balance Career Advancement Figure 1.
Underlying factors contributing to employee resignation Source: Dataindonesia.
A survey conducted by PayScale on why employees quit their jobs proved that compensation .
%) is the main reason.
Other reasons are a sense of discomfort at the current company .
%), a desire to work for a new company that is in line with their values .
%), location transfer .
%), looking for a full-time job .
%), etc.
(Berliana, 2.
Millennials often resign due to unhappiness, salary issues, or the pursuit of a promotion.
On the other hand, boomers resign because they look for a company that enforces the same values at work.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
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Figure 2.
Why people choose their new org Source: Berliana .
High employee turnover is a major problem for many companies because it disrupts operations, lowers productivity, and increases the costs of hiring and training new staff (Caredo et al.
, 2.
This problem underscores the urgent need for companies to develop more systematic employee retention strategies.
Numerous studies have shown that various factors influence employee turnover, including an imbalance between work and personal life, dissatisfaction with compensation systems, and a lack of organizational recognition and Several prior studies have emphasized the importance of employee well-being in enhancing employee retention.
For example.
El-Sherbeeny et al.
and Walbeek and El Hajal .
found that psychological well-being positively correlates with employees' willingness to remain in their current jobs.
Furthermore.
Mazlan and Jambulingam .
revealed that employee well-being significantly affects job loyalty, particularly among However, most studies were conducted within Western organizational cultures, which may not apply to the Indonesian corporate context.
Additionally, few studies examine employee well-being from a multidimensional perspective encompassing physical, emotional, and social aspects concerning employee retention.
Given this context, our study offers a novel contribution by adopting a holistic approach to employee well-being and examining how it influences employee retention within Indonesian This research explores the general relationship and identifies which well-being dimensions most strongly contribute to fostering employee loyalty.
Consequently, the findings are expected to offer theoretical and practical insights to developing more effective human resource management strategies.
The research questions addressed in this study are:
Does employee well-being significantly influence employee retention? .
Which employee well-being dimensions have the biggest impact on employees' decisions to remain with their employer? This research aims to analyze the impact of employee well-being on retention and identify the key dimensions of well-being that are most instrumental in retaining employees.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
E-ISSN: 2828-8394
org/10.
55584/Gabs.
Literature review Employee retention Employee retention is a critical aspect of human resource management, closely related to an organization's efforts to retain high-performing individuals who contribute significantly to achieving its strategic goals.
Ekhsan et al.
define employee retention as a systematic endeavor undertaken by organizations to create working conditions that encourage employees to remain in the long term.
Retention is key to organizational success in establishing a supportive, satisfying, and expectation-aligned work environment.
Chikove .
found that job satisfaction, organizational commitment, role clarity, and career advancement opportunities significantly influence employees' decisions to stay with an Furthermore.
Parmenas .
emphasized the importance of organizational support for employee development as a principal determinant of retention, particularly within competitive and dynamic work environments.
In this context, organizations must develop fair reward systems, provide clear career pathways, and cultivate positive relationships between employees and supervisors.
De Jesus et al.
established that employee retention contributes to workforce stability and is intricately linked to productivity, operational efficiency, and competitive They advocated a strategic approach to retention, which involves understanding individual employee needs, managing workloads appropriately, and fostering an inclusive and supportive organizational culture.
Chikove .
also found that employees are less likely to quit when they feel more engaged with their work, colleagues, and workplace community.
Employee retention results from a complex interplay between organizational and personal Organizations that can identify and effectively manage these key determinants are more likely to enhance employee loyalty and engagement while reducing costly turnover.
Nevertheless, the effectiveness of retention strategies is heavily influenced by industry-specific characteristics, organizational culture, and the evolving expectations of different generational cohorts in the workforce.
Employee well-being In contemporary human resource studies, employee well-being has become a central focus because organizations increasingly recognize the critical role physical, mental, and social health play in supporting productivity and employee retention.
According to Rahman and Tahseen .
, employee well-being is the degree to which a person has a positive quality of life at work.
This includes job satisfaction, emotional involvement, and positive psychological experiences in the workplace.
Well-being encompasses a holistic dimension that involves balancing professional demands and personal life, job security, healthy social relationships, and opportunities for personal growth.
Lorber and Dobnik .
and Srimulyani and Hermanto .
found that employee well-being is significantly associated with enhanced job performance, organizational engagement, and employee loyalty.
They suggest that organizations adopting a well-beingoriented approach experience reduced workplace stress, absenteeism, and turnover rates.
Furthermore.
Composto et al.
, .
emphasized that positive perceptions of workplace conditions, including role clarity, autonomy, and recognition, are vital in fostering psychological well-being among employees.
Aman et al.
further asserted that well-being is not a passive state but the result of an individual's capacity to navigate occupational stress through adequate environmental This finding is reinforced by Darden .
, who noted that companies investing in employee well-being initiatives, such as mental health training, flexible work arrangements.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
E-ISSN: 2828-8394
org/10.
55584/Gabs.
and improvements in the quality of the work environment, reap long-term benefits in the form of heightened employee engagement and loyalty.
Overall, employee well-being is a strategic component that strengthens the relationship between employees and the organization.
When employees feel valued, healthy, and their needs are met, they are more likely to demonstrate commitment and a desire to remain with the Thus, a systematic understanding and management of employee well-being is essential to building a productive, sustainable, and competitive workplace in the modern era.
Methodology This study employed a survey using a quantitative research approach.
The sample comprised 154 employees working in an agricultural product processing company, selected from a population of 250 employees.
Data was collected by distributing questionnaires to understand how employees perceive well-being and retention.
The questionnaire utilized a five-point Likert scale, ranging from "strongly disagree" to "strongly agree," to ensure that the data collected were measurable, objective, and statistically analyzable.
A purposive sampling technique was employed, with specific criteria such as a minimum of two years of employment at the company.
This criterion was adopted to ensure that respondents possessed sufficient experience and understanding of workplace well-being dynamics and the decision-making processes related to organizational retention.
Data analysis was conducted using descriptive and inferential statistical methods.
Descriptive statistics were used to depict respondent profiles and data distribution across Inferential statistics was used to determine how employee well-being .
he independent variabl.
affects employee retention .
he dependent variabl.
Before the analysis, the research instrument was tested for validity and reliability to ensure accuracy and Hypothesis testing was performed at a significance level of 0.
05 using SPSS.
This study is expected to contribute empirical insights into the pivotal role of employee well-being in maintaining workforce stability and sustainability within organizational settings.
Results and discussions The validity test A validity test was performed to check if the survey questions accurately measured the concepts they were designed to evaluate.
The validity assessment was conducted using responses from 30 of the 150 respondents as part of a pilot test.
The instrument comprised two primary variables, i.
, employee well-being and employee retention, each represented by 30 statement items.
Validity was examined using Pearson product-moment correlation analysis, facilitated by statistical software.
The validity criterion was determined by comparing the calculated correlation coefficient .
-calculate.
with the critical value from the r-table at a 5% significance level (N = 30.
r-table = 0.
The analysis revealed that all items across both variables had r-calculated values exceeding the r-table threshold and significance values less Based on these results, it can be concluded that all items within the employee wellbeing and employee retention instruments are statistically valid and suitable for use in the subsequent phases of this research.
The reliability test A reliability test was conducted to determine the consistency of the survey questions.
specifically checked if the questionnaire would give stable and dependable results if used again.
The reliability was evaluated using the Cronbach's alpha coefficient.
The employee well-being variable achieved a Cronbach's alpha value of 0.
876, while the employee retention variable obtained a value of 0.
Both exceeded the minimum acceptable threshold of 0.
70, signifying that all items within each instrument are deemed reliable.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
E-ISSN: 2828-8394
org/10.
55584/Gabs.
Accordingly, the questionnaire demonstrates strong internal consistency and is suitable for further data collection.
Table 1.
Reliability test output Variable N Cronbach's alpha Description Employee well-being 150 Reliable Employee retention Reliable The normality test The normality test was conducted to determine whether the data distribution follows a normal distribution.
This study used the normality test to test the data distribution of the employee well-being and employee retention variables.
The methods for the normality test were Kolmogorov-Smirnov and Shapiro-Wilk, which provide a significance value to ascertain whether the data is normally distributed.
The data is normally distributed if the significance value is greater than 0.
Table 2 shows the normality test results for each variable.
Table 2.
Normality test output Variable Normality test Employee well-being Kolmogorov-Smirnov Employee retention Shapiro-Wilk Significant value Description Normal Normal The significance values are 0.
208 and 0.
221 for the employee well-being and employee retention variables, respectively.
Since both values are greater than 0.
05, it can be concluded that the data for both variables are normally distributed.
Therefore, inferential analysis using parametric techniques can be applied.
The homogeneity test A homogeneity test was conducted to test whether two or more groups have the same or homogeneous variance.
This test is important so that further analysis can be carried out with the assumption of equal variance, which is one of the requirements in parametric analysis.
The Levene test is a common way to check for homogeneity and determine if the variances between different groups are significantly different.
Table 3 shows the homogeneity test results for the employee well-being and employee retention variables.
Table 3.
Homogeneity test output Variable Homogeneity test Employee well-being Levene's test Employee retention Levene's test Significant value Description Homogeneous Homogeneous Based on the homogeneity test, the significance values for employee well-being .
and employee retention .
are above 0.
05, meaning the variances for both variables are not significantly different.
We conclude that the data for both variables are homogeneous and fulfill the assumptions for further analysis using the parametric techniques.
The simple linear regression test Regression analysis was conducted to produce a model summary table, which illustrates the degree to which the independent variables account for the variance in the dependent Table 4 shows key details about the regression model's strength and accuracy, including the R.
R-squared, adjusted R-squared values, and the standard error of the estimate.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
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55584/Gabs.
These results are the basis for assessing whether the model is good enough to predict the dependent variable based on the independent variables.
Table 4.
Model summary Adjusted R square Model R square Predictor: .
, employee well-being Std.
error of the estimate The R-square value is 0.
814 or 81.
4%, meaning the effect of employee well-being on employee retention is 81.
other variables outside the model influence the remaining 18.
A common rule of thumb for R-squared is that a value above 50% indicates a strong relationship between variables, meaning the model is a good fit.
Conversely, a value below 50% suggests a weaker relationship, indicating that the model may not fit well.
A simple linear regression analysis was used to partially determine how the independent variable affects the dependent variable.
This analysis shows the size and direction of the independent variable's contribution to the dependent variable.
Table 5.
Coefficients Model (Constan.
Employee well-being Unstandardized Std.
Standardized Beta Sig.
Dependent variable: employee retention a = constant number of unstandardized coefficients.
In this case, the value is 36.
This number is a constant, which means that if there is no employee well-being (X), then the consistent value of employee retention (Y) is 36.
b = regression coefficient number.
The value is 0.
513, meaning that for every 1% increase in employee well-being (X), employee retention (Y) increases by 0.
Thus, it can be said that employee well-being (X) positively affects employee retention (Y).
Therefore, the regression equation is Y = 36.
513 X.
Figure 3 illustrates the distribution of employee well-being levels based on the length of The level of employee well-being varies for each tenure group.
Employees with 3 and 10 years of service show a relatively high median employee well-being and a narrow spread of values, indicating that, on average, they feel a greater sense of stability and well-being at work.
In contrast, employees with 2, 5, and 6 years of service have a wider spread, indicating an uneven perception of employee well-being.
Outliers exist, particularly within the 4, 6, and 7year tenure groups, suggesting that some employees in these groups have a level of job wellbeing that is either significantly higher or lower than their colleagues.
This could be due to differences in work experience, work environment conditions, or personal factors.
In addition, employees with longer tenure .
, 10 years and abov.
tend to have higher and more consistent levels of well-being, which could contribute to their high retention rates.
These results indicate that tenure has the potential to moderate the relationship between employee well-being and employee retention.
Employees with medium tenure .
-7 year.
show a wide distribution, which could be a critical point in the management of employee well-being.
If their well-being is not managed well, the turnover risk may increase.
Employees with longer tenure show higher and more stable levels of well-being, which may contribute to better retention.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
E-ISSN: 2828-8394
org/10.
55584/Gabs.
Figure 3.
Employee well-being based on years of service Figure 4.
Employee retention based on years of service Figure 4 shows the employee retention distribution based on the service length.
Retention rates generally stabilize in the 5- to 10-year tenure range, with a relatively high and consistent median retention.
The group with 2 years of service shows a very large variation in retention, characterized by a wide interquartile range and a lower median than the other groups.
This indicates that new employees are uncertain about their loyalty to the company.
Meanwhile, the 3- and 4-year tenure groups have a fairly high median but with a narrower spread of values, indicating stability.
However, some extreme outliers indicate the possibility of specific problems experienced by a small number of employees.
The group with 5 to 9 years of service has a wider distribution.
Still, it remains within the range of high retention values, suggesting that while perceptions of retention vary, most employees remain highly committed to the Overall, this pattern confirms the importance of paying attention to workplace wellbeing, especially in the early phases of employment, to improve long-term employee retention.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
E-ISSN: 2828-8394
org/10.
55584/Gabs.
Effect of employee well-being on employee retention The regression analysis results suggest that employee well-being (X) positively impacts employee retention (Y), as indicated by a regression coefficient of 0.
This means that for every 1% increase in employee well-being, employee retention increases by 0.
513 points.
The constant value of 36.
430 indicates that in the absence of contributions from well-being, the baseline level of employee retention remains at this figure.
These findings align with previous research by Harun et al.
, which states that employees' psychological well-being is a significant predictor of loyalty and reduces turnover rates.
Julianti et al.
Yusdhika et .
, and Ardianto et al.
also demonstrate that high employee well-being is positively correlated with organizational commitment and contributes to the intention to remain longer with the company.
Furthermore, the visualization results through figures reinforce these quantitative findings.
The distribution of employee well-being indicates that employees with longer tenures, particularly those with 10 years of service, tend to have higher and more stable well-being.
This supports the findings of Ardianto et al.
Burmansah et al.
Dharma et al.
, and Teri et al.
, which revealed that high employee well-being contributes to long-term retention as employees experience comfort and meaning in their work.
Conversely, the wider distribution of well-being among employees with 4 to 7 years of service indicates a potential for dissatisfaction that warrants special attention, given that this period often represents a critical phase in the decision-making process regarding whether to stay or leave the company.
A similar trend is observed in the figure of employee retention, where retention increases and becomes more stable with longer tenures, suggesting that the well-being experienced by employees contributes to their decision to remain employed in the long term.
These findings are supported by Lestari .
and Bai et al.
, who emphasize that basic psychological needs such as feeling valued and achieving work-life balance are crucial in retaining Therefore, companies should enhance employee well-being, particularly during the early and mid-tenure phases, to prevent turnover and increase employee loyalty.
Overall, the results of this study establish that employee well-being is a significant strategic factor in shaping the sustainability of the employment relationship between individuals and Conclusion Based on our analysis, we conclude that employee well-being positively and significantly impacts employee retention.
The regression coefficient of 0.
513 indicates that increasing employee well-being directly enhances retention rates.
Put simply, the happier employees are with their well-being, the likelier they will stay with the company.
The data visualization results through figures further reinforce these findings.
Employees with longer tenures tend to exhibit higher and more stable levels of well-being and retention.
In contrast, those with mid-range tenures demonstrate greater variability in their perceptions of well-being and loyalty.
This suggests the importance of appropriate managerial interventions during critical phases of employment to enhance well-being and prevent potential turnover.
In conclusion, companies must seriously consider employee well-being, encompassing psychological, social, and work environment factors.
Strategies aimed at improving employee well-being not only contribute to employee happiness but also play a significant role in the stability and sustainability of the workforce in the long term.
Ardianto et al.
Global Advances in Business Studies 2025, 4.
, 104-115
E-ISSN: 2828-8394
org/10.
55584/Gabs.
References