Impact of human resource management practices on employee retention: A systematic literature review.

Abstract

Employee retention is a critical issue faced by organizations across various sectors, making the role of Human Resource Management (HRM) practices crucial in addressing this challenge. This systematic literature review aims to explore the impact of HRM practices on employee retention by synthesizing findings from multiple studies conducted over the last two decades. The review analyzes key HRM strategies, including recruitment and selection, training and development, compensation and benefits, performance management, and employee engagement. It also examines how organizational culture, work-life balance initiatives, and career development opportunities influence retention outcomes. The findings suggest that effective HRM practices significantly contribute to higher employee retention rates by fostering job satisfaction, organizational commitment, and loyalty. Notably, strategic recruitment and selection processes are crucial in hiring individuals who align with the organization’s values and culture, while comprehensive training and development programs enhance employees’ skill sets and career prospects. Competitive compensation packages, alongside performance-based rewards, further strengthen retention by addressing employees' financial and recognition needs. Moreover, fostering a positive work environment through engagement initiatives and supportive leadership is essential for maintaining workforce stability. However, the review also highlights that the effectiveness of HRM practices varies depending on factors such as industry, employee demographics, and organizational size. Thus, a one-size-fits-all approach may not be suitable. The review concludes with recommendations for organizations to adopt a more tailored and holistic approach to HRM, integrating both traditional and innovative strategies to retain talent effectively in a dynamic business landscape.