Effects of human resource management practices on retention of employees in the banking industry in Kampala, Uganda

Abstract

The importance of human resource in any organization cannot be overstated, as they are the ones who contribute significantly to the organizational goals. Therefore, organizations’ need to ensure that they have effective strategies to keep their skilled employees satisfied and loyal. One of the ways to achieve this is through implementing sound HRM practices that can enhance employee retention. This is especially relevant for the banking industry in Uganda, which faces a high threat of employee turnover due to the competitive nature of the sector. The aim of this research was to explore how HRM practices influence the retention of employees in the banking industry in Kampala, Uganda. In particular, it investigated the effects of career management and work-life balance on employee retention. The research also examined how job satisfaction moderates the relationship between HRM practices and employee retention. The study followed an explanatory cross-sectional survey design and was undertaken in the Kampala CDB. The researchers used stratified random sampling to choose 342 employees from different banks as their sample. They applied both descriptive and inferential statistical methods to analyses the data. They performed a Binary Logistic Regression analysis to examine how well the HRM practices could predict employee retention. The results of this study show that HRM practices such as compensation and work-life balance are important to employees and affect their retention in the banks. Moreover, work-life balance and employee engagement, which are new topics in HRM research, both significantly predicted employee retention. However, unexpectedly, career management did not have a significant impact on employee retention. It was also clear that job satisfaction could not moderate the interaction between HRM practice and employee retention. The study suggests that, to improve employee retention in the banks, the banks should pay attention to their human resource even in a competitive environment, so that they can gain a competitive edge through them. The banks should offer some flexibility because work-life balance seems to be important to the employees. Additionally, it is suggested that employees should be empowered and given challenging tasks that will make them use their full potential. Also, the banks should collaborate with universities and other academic institutions for research on the problems they face, so as to find the best solutions for human resource management.