Factors determining employee retention of development banks in Nepal

Abstract

Retaining valuable employees has become crucial for organizations to thrive, grow, and succeed in today's competitive and rapidly changing business environment. These employees are often seen as the backbone of the organization, playing a vital role in its destiny. However, employee retention has become a major challenge due to the increased mobility of talent facilitated by globalization. This phenomenon has accelerated the rate at which employees switch jobs or leave organizations, creating a pressing need for companies to address this issue effectively. The study focuses on the problem of employee retention in development banks in Nepal. High employee turnover rates can be costly and pose challenges for organizations in terms of productivity, knowledge loss, and recruitment and training expenses. The research endeavors to achieve the following research questions: What are the factors determining employee retention in development banks? What is the overall perception of employees regarding the employee retention practices of the banks? Is there a relationship between leadership approach, salary and wages, learning opportunities, employee satisfaction, and employee retention? Does leadership approach, salary and wages, learning opportunities, and employee satisfaction have an effect on employee retention in development banks in Nepal? The study's objectives include assessing employee retention practices in development banks, investigating employee perceptions of retention practices, examining the relationship between various factors and employee retention, and analyzing the effect of these factors on retention. The research hypotheses propose that leadership approach, learning opportunities, salary and wages, and employee satisfaction significantly impact employee retention. The rationale for the study lies in the importance of retaining key employees for organizational stability and growth. Development banks play a crucial role in Nepal's economic development, and employee retention is vital for their success. Factors such as leadership approach, salary and wages, learning opportunities, and employee satisfaction can influence employees' decision to stay with an organization. By understanding these factors, the study aims to inform strategies and interventions to improve employee retention in development banks. It also only examines selected factors related to retention, and the findings may not be applicable in an international context. The sample size and data collection techniques may xi

affect the generalizability of the findings as well. The research design includes descriptive and analytical approaches. The population consists of permanent employees in development banks in Nepal, and the sampling technique is purposive sampling. Data is collected through questionnaires and interviews, with a combination of primary and secondary sources. Data analysis involves descriptive and inferential statistical tools, including correlation analysis and regression analysis. The reliability of the instruments is tested using Cronbach's alpha, indicating high reliability. Validity is established through a thorough development process and expert feedback. The study aims to provide insights into the factors determining employee retention in development banks in Nepal and guide the formulation of effective retention policy and guidelines. The study conducted in development banks in Nepal included 388 employees, with the majority being in the age group of 20-29 and a higher representation of males. Factors such as leadership approach, salary and wages, learning and opportunity, and employee satisfaction were found to have a significant positive impact on employee retention in the development banks.

Keywords: Employee Retention, Employee Satisfaction, Employee Turnover, Learning and Opportunity and Descriptive Statistics.