The Impact of Organizational Culture and Work–Life Balance on Employee Retention: An Empirical Study of Microfinance Banks in Khairpur, Pakistan

Abstract

Retention of employees has become major challenge for today’s organizations especially in the banking sector where frequent employee turnover not only affects the performance of organizations but also increase cost of recruiting and training new workers. The purpose of this study is to determine the impact of organizational culture and WLB on employee retention among employees of microfinance banks in Khairpur, Pakistan. This study adopted quantitative approach which was based on philosophy of positivism and deductive method. Data were collected from 88 employees through structured questionnaire, which used five-point Likert Scale. The gathered data was analysed by using SPSS software version 24, which used demographic analysis, reliability analysis, correlations analysis and regression analysis. The findings of the study show that good organizational culture has positive and significant effect on employee retention with value of (r = 0.693, p = 0.000). Similarly, good work and life balance also has positive and significant effect on employee retention (r = 0.734, p = 0.000). According to the regression analysis, these two factors together explained 61.2% of the change in employee retention (R² = 0.612), which indicates that these two factors play significant role in employee retention. The entire hypothesis presented in the study was found to be accepted. The study concludes that if conductive environment is created in the organization and employees are provided with facilities for good WLB among staff members in microfinance banks will stay with organization for extended duration. These findings provide useful guidance for bank managers and human resource professionals to develop policies that improve the organizational climate, increase employee satisfaction and commitment in order to reduce the tendency to leave the job.

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