A Study on The Factors Affecting Employee Retention in The Finance Industries at Klang Valley, Malaysia

Abstract

This study investigates employee retention in the finance industries of the Klang Valley region, recognizing its critical importance for organizational success and competitiveness. The study delves into the factors influencing retention, with a focus on organizational culture, compensation and benefits, career advancement opportunities, and work-life balance. In this study, feedback was collected from 309 questionnaires that were fully completed by employees from different finance organisations within the Klang Valley area. The reliability of variables was assessed through Cronbach's Alpha, yielding satisfactory results for all variables. Analysing the responses using the Pearson Correlation Coefficient, the study found moderate to strong positive correlations among the variables, indicating significant relationships. Utilizing Multiple Linear Regression Analysis, the study revealed that Organizational Culture and Compensation and Benefits significantly and positively influence employee retention. Work-Life Balance also demonstrated a positive effect, though of smaller magnitude. However, Career Advancement Opportunities had a minimal positive impact on retention, which was not statistically significant. These findings underscore the importance of fostering a positive work culture and offering attractive compensation and benefits to improve employee retention rates in the finance industry within the Klang Valley. A positive work culture and competitive compensation and benefits package are crucial factors in retaining talented employees. Though Career Advancement Opportunities showed a lesser impact, providing growth opportunities remains beneficial for organizations. The study concludes by discussing major findings, limitations, and future research suggestions, providing valuable knowledge for finance organizations in the Klang Valley to effectively understand and address employee retention factors.