This study investigated the factors affecting employee retention in the Indian automobile industry in the era of Industry 5.0, including the factors such as organizational culture and climate, reward recognition and pay, leadership style and quality, job security, work-life balance, training and development, autonomy, promotions, and career growth. The convenience sampling technique was used to collect data from 141 employees of selected automobile companies using a self-administered questionnaire. The data were analyzed by employing multiple regression and multivariate analysis of variance (MANOVA). The findings of the study revealed that all the selected factors significantly affect employee retention. Training and development is the most influencing factor affecting employee retention in the Indian automobile industry. Additionally, the demographic variables taken in this study have demonstrated differential effects in context of the factors affecting employee retention. This study has also offered insights to automobile industry on Industry 5.0 interventions for employee retention.
Top1. Introduction
Amidst globalization and fierce competition, managing the workforce is a primary challenge that organizations are facing (Mukherjee et al. 2020). Employees are the most vital assets for any organization as every organization needs employees to survive in today's competitive scenario (Mukherjee et al., 2020; Muo, 2013, Rakhra, 2018; Kumar & Kaur, 2022). Having the right person at the right place at the right time is the triumph mantra to be followed by every organization (Narayanan et al., 2019). For an organization nothing could make a better impression than having a productive and satisfied workforce as it ensures customer satisfaction, increased productivity and healthy interpersonal relationships (Charity, 2016; Aruna & Anitha, 2015). Attracting, developing, and retaining a company's quality employees is the core role of personnel management (Mohammed, 2015; Iqbal and Hashmi, 2015).
Furthermore, in today's worldwide economy and in the era of industry 5.0, employee retention has become a difficult problem for organizations (Haider et al., 2015). Employee retention is the process of encouraging employees to stick around the company for as long as possible or until the project is finished (McDonnell et al., 2012; Chatterjee et al., 2014; Presbitero et al., 2016). Employers should make a concerted effort to develop an atmosphere that motivates current employees to stay with the company by putting policies and procedures in place that cater to their various demands (Mukherjee et al., 2020; McDonnell et al., 2012; Tanwar & Prasad, 2016). A lack of an effective retention plan can result in job disruption, a reduction in output and productivity, lower performance, and significant financial loss (Ballinger et al., 2011; Bryant & Allen, 2013; Khalid and Nawab, 2018). Employee retention is crucial since it prevents organizational problems such as investment on training, productivity loss and recruitment expenditure (Kundu & Lata, 2017). Due to industry 5.0 changes organizations are undergoing constant change, and the employees that work there are also being impacted by this shifting environment.
Human resources must be utilized effectively for resource utilization and to maximize organizational efficiency (Fletcher et al., 2018). Management of human resources is crucial in this context (Teclaw et al., 2014). Nowadays, all organizations face the critical challenge of employee retention. Numerous factors influence whether employees choose to stay with the company or quit it (Sinnott et al. 2002). It could be caused by internal reasons, external reasons, or a combination of the two (detailed in literature review section). It is imperative that human resource managers determine the needs of the employee before developing retention measures (Latha, 2013). One policy does not work for everyone because everyone has different priorities. Past research has shown that employee retention can boost an organization's performance overall, but because employee retention depending on the factors such as type of business or organization, the position of the employee within the organization, employee demographic attributes etc. consequently, it is difficult to develop a universal retention strategy for different industry (Fahim, 2018; Bibi et al. 2016). Therefore, a key and likely area of research would be to examine employee retention specifically in the industry (which has not been or has been less researched in the past in this context, such as the automobile industry). With growth of the automobile industry in the Indian economy, a sufficient number of opportunities existing in the market has increased competition. Consequently, each company needs to have a competitive edge (in terms of quality and stable employees) for a longer period of time.