Orientation: The global skills crisis, ‘the great resignation’, and technological advancements have impacted the higher education (HE) sector in South Africa. Staff retention is at risk because of the specialised skills sought by institutions, making employment relationships and skill retention top priorities.Research purpose: The aim of this study was to explore the influence of socio-demographic differences on the relationship between psychological contract preferences and staff retention among South African HE employees.Motivation for the study: High staff turnover in South African HE sector and inability to retain crucial skilled employees pose challenges for HE institutions (HEIs) in a complex and diverse environment.Research approach/design and method: A cross-sectional quantitative survey was conducted on a purposively selected population of full-time employees, both academic and administrative, with a final random sample of participants (N = 493) employed in an open-distance HEI in South Africa. Inferential statistics, specifically tests for significant mean differences, were performed.Main findings: Higher education employees from different race, gender, age, job level and tenure groups differ considerably in terms of their psychological contract preferences and their satisfaction with organisational retention practices.Practical/managerial implications: Interventions for HE staff retention should prioritise strengthening diverse employees’ psychological contracts, meeting their needs, and ensuring fulfilment of promises and commitments in the employment relationship.Contribution/value-add: This paper’s unique contribution lies in the new insight it provides into the psychological contract and retention-related preferences of diverse employees in the South African HE context.