Introduction

The word Gen usually refers to a group of people with shared experiences of social and life events, culture, economics, and technology The shared experiences of groups shape their personalities and significantly influence their beliefs, values, attitudes, and expectations toward the workplace. Nowadays, the workplace has organizational members belonging mainly to three different generations: Gen X, Gen Y (millennials), and Gen Z. Understanding generational differences is essential to manage the challenges related to differences in employees’ attitudes and preferences toward their managers and organizational HRM practices (Dwyer and Azevedo 2016). In their systematic review of 102 publications on Gen Z between 2009 and 2020, Benítez-Márquez et al. (2022) argued that it is a hardly developed research topic that attracted attention in 2018 and stressed the need for further development on different aspects regarding this generation. The importance of understanding the generational attributes of Gen Z calls for research into the unique characteristics of this generation (Sakdiyakorn et al. 2021). The current study focused mainly on identifying the major antecedents of employee retention among Gen Z employees.

HRM research advocates the importance of incorporating employee retention strategies as essential principles in organizational policies (Tanwar 2016; Bibi et al. 2018; Frye et al. 2020; Gaan and Shin 2022). In line with the definition of employee retention presented by Arasanmi and Krishna (2019), we understand the retention of Gen Z employees as the process of motivating employees to work and stay longer for the company. Fernandez et al. (2023) argued that Gen Z employees are less engaged at work and began their careers only to become furloughed or fired. Accordingly, this study argues that companies may retain their young employees through a set of favorable HRM practices.

Despite the vast research on the factors affecting employee retention such as job satisfaction (Tanwar 2016; Frye et al. 2020), autonomy (Kim and Stoner 2008), manager’s leadership style (Khan and Wajidi 2019), and work–life balance (Aguenza and Som 2018); limited studies were undertaken in the context of Gen Z employees, especially in the Chinese context. Further, empirical findings showed contradictory findings and lacked clear explanations of the antecedents of employee retention (Mangi et al. 2012; Ahmad et al. 2017). For instance, Bibi et al. (2018) called for more research on the relationship between training and development and employee retention. Therefore, this study intended to provide answers to two main questions:

  1. 1.

    What are the influential HRM practices affecting the retention of Gen Z employees?

  2. 2.

    Does employee gender play a moderating role in the relationship between HRM practices and the retention of Gen Z employees?

The current study contributes to the existing literature on employee retention in three ways. First, this study combines the literature on Gen Z with HRM practices influencing employee retention in the Chinese context. Given the increased turnover rate and scarcity of research on employee retention in the Chinese context (Yang et al. 2020), it is imperative to examine the influential factors enhancing employee retention (Yousaf et al. 2020; Yang et al. 2020) especially the Gen Z cohort who join the Chinese workforce at a gradual and accelerated pace. Second, the adopted research methodology provides an integrative and pragmatic method to better capture the fundamental HRM practices affecting Gen Z retention across different industries. The data collection procedure began with distributing a mini questionnaire to identify the most important HRM practices influencing the retention of Gen Z employees followed by conducting exploratory interviews to gain a deep understanding of why young employees put a great emphasis on such HRM practices. Finally, a larger empirical investigation using a survey was undertaken to examine the direct influence of selected HRM practices on employee retention and use employee gender as a moderating variable to figure out the potential difference between male and female employees. Third, drawing on the social exchange theory, this study delineates the direct effect of influential HRM on employee retention from the viewpoint of the Gen Z cohort and the moderating effect of employee gender. Hence, our study presents a novel attempt to develop a comprehensive theoretical framework that provides a broad scope for future research to examine the influential HRM practices which meet the expectations of Gen-Z cohorts.

The remaining subsections of this paper are organized as follows: section 2 presents the theoretical background of this study and the development of research hypotheses. Section 3 explains the overall research methodology including the exploratory study and empirical investigation. Section 4 presents the descriptive findings and the results of hypotheses testing. Section 5 presents the discussion of research findings and compares it with existing literature. Section 6 highlights the theoretical and practical implications. Finally, section 7 presents the research limitations and suggested areas of further research.

Literature review

Chinese Gen Z cohort and employee retention

Gen Z accounted for 32% of the world population, and approximately 42% of the US population (Sakdiyakorn et al. 2021). Chinese Gen Z population includes 260 million as of 2021 and is expected to make up the largest portion of China’s workforce in the next decade (Piao 2022). Yang et al. (2020) argued that Gen Z’s distinct behavior patterns can be justified based on the rigidity of social stratification, the abundance of materialism, the digital era, living in limited not extended families, and heavy schoolwork.

The fundamental organizational practices to respond to the demands of Gen Z employees include providing a friendly working environment, internships, employing the latest technologies, ambassador programs, and corporate social responsibility (Fernandez et al. 2023). Yang et al. (2020) argued that Chinese Gen Z employees have their characteristics in choosing the workplace based on four aspects: work-life balance, active and innovative thinking styles, equal and fair work environment, and strong personal judgment.

Scholars presented several factors influencing employee retention such as job satisfaction, organizational trust, supportive organizational culture, excellent leaders’ performance, and job engagement (Moreno et al. 2022), organizational commitment, working environment, income, reward and recognition, and supervisor support (Halim et al. 2020).

The fundamental motivational factors affecting Gen Z’s choice of a workplace include high salaries, career advancement opportunities, good teams, and meaningful work (Csiszárik-Kocsír and Garia-Fodor 2018). Popaitoon (2022) argued that work meaningful has a significant positive impact on Gen Z’s employee retention. Lee et al. (2022) indicated that transformational leadership has a positive significant effect on Gen Z employees’ motivation and retention in the workplace. Scholars underlined that the Gen Z cohort put great value on intrinsic motivation and work meaningfulness than other generations (Farrell and Phungsoonthorn 2020; Mahmoud et al. 2021; Pichler et al. 2021). This indicates that members of Gen Z are intrinsically motivated, which infers that they are self-reliant and interested in learning and advancing their careers. Xuecheng et al. (2022) revealed a significant positive impact of training and development, work environment, and job satisfaction on employee retention. Research delineates various factors influencing employee retention such as training and development, job empowerment, monetary and nonmonetary rewards, work-life balance, job enrichment, and job climate (Ghosh et al. 2013; Aguenza and Som 2018), job promotion (Woodall et al. 2017), benefits and rewards and career development opportunities (Bibi et al. 2018; Lyman et al. 2020), organizational commitment (Perreira et al. 2018), and compensation (Pichler et al. 2021).

Social exchange theory

This study argues that the social exchange theory (SET) introduced by Blau (1964) provides a logical theoretical basis for explaining employee retention among Gen Z in relation to specific HRM practices. The SET is described as the exchange of resources between managers and subordinates in a series of interactive processes that may involve materials or non-materials, which eventually yield obligations (Thibaut and Kelly 1959; Blau 1964).

The multifaceted nature of resource exchange among actors depends on two main conditions. First, the resources invested by one actor (leader) in other actors (employees) must result in the reciprocal behavior of the latter. Second, the exchange of resources between leader and employee should be directional and continuous. For example, employees exchange work for pay, which, in turn, produces beneficial outcomes, including a sense of personal obligation, gratitude, and trust (Blau 1964; Schroth 2019), consequently enhancing organizational commitment, satisfaction, and retention among subordinates (Blau 1964; Lu and Gursoy 2016).

Further, SET applies to leaders who have a relational and interactive approach (Gürbüz et al. 2014), which aligns best with designing and implementing favorable HRM practices and policies to encourage the retention of young employees. Building on the SET, we argue that encouraging HRMC practices leads to evoking positive emotions (Thibaut and Kelly 1959) in Gen Z employees to reciprocate positive work outcomes (Lu and Gursoy 2016). SET theory was applied to examine Gen Z turnover intention (Gaan and Shin 2022). Based on employees’ expectations and reciprocating relations, SET provides explanations for employees’ behaviors in organizations (Galanaki 2020). Research proclaims that both scholars and policymakers have a great consensus about the vital role of human resource management in developing employee retention (Tian et al. 2020). This research argues that organizations can well retain their employees when they provide training and development, good pay, a supportive working environment, and employee role clarity. Hence, SET has a theoretical significance in improving the retention of Gen Z employees based on a relevant and favorable set of HRM practices.

The Gen Z cohort believes that organizations usually care about employees only when they are needed (Scholz 2019). However, compared to other generations, Gen Z may switch their jobs frequently (Csiszárik-Kocsír and Garia-Fodor 2018). Hence, despite we believe that the SET is built on reciprocal relations between two actors; we argue that organizations need to take the initiative by providing favorable and attractive conditions for the other actors (employees) to stimulate positive outcomes (retention). Building on the SET, this research has identified and examined the direct influence of four fundamental HRM practices: work environment, pay, training and development, and role clarity on employee retention among Chinese Gen Z employees with emphasis on the potential moderating role of employee gender. Figure 1 visualizes the proposed research framework.

Fig. 1
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Research Framework.

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Work environment and employee retention

Employees assess the working environment and share their views with other colleagues. A work environment can be described as a culture that includes leadership styles, good communication between coworkers, and professional growth (Ritter 2011). The major indicators of the work environment involve physical working conditions and supervisor support (Stirpe and Zárraga-Oberty 2017), and organizational rules and policies which affect the retention of employees (Yam et al. 2018). In this regard, the current study defines a supportive working environment as a set of favorable physical, social, and managerial conditions with the potential of encouraging the retention of young employees. Yang et al. (2020) highlighted three fundamental differences in the work environment between Gen Z employees and other employees: they are more competitive than their predecessors due to having a good education, international experience, and training, have a wide range of career choices (in China and overseas), and maintain a higher degree of marketization and will not suffer from ‘job choice phobia’ like employees in the 1970s and 1980s.

A supportive working environment increases organizational trust which eventually leads to enhancing employee retention (Xuecheng et al. 2022). Research has also shown a positive relationship between a supportive working environment and employee retention (Halim et al. 2020; Naz et al. 2020; Wu et al. 2020; Xuecheng et al. 2022). Guided by the previous discussions, this research intends to test the following hypothesis:

H1. The work environment has a significant and positive influence on Gen Z employee retention.

Pay and employee retention

Employees place great value on organizational pay practices. Due to an uncertain business environment and economic downturn, the members of Gen Z employees pay increased attention to employability, growth, and financial stability (Csiszárik-Kocsír and Garia-Fodor 2018; Pichler et al. 2021). Therefore, they are willing to work hard, gain work experience, and learn new skills to achieve their career goals.

Acheampong (2021) reported that a high or competitive salary is essential for retaining Gen Z employees. However, Bharath (2021) proclaimed that both paycheque and beyond paycheque factors have a vital role in retaining employees. This research views pay as any form of direct financial payment or intangible benefits provided by companies to young employees to encourage their retention. Guided by relevant literature on the relationship between pay and employee retention, the second hypothesis is stated as follows:

H2. High pay has a positive impact on the retention of Gen Z employees.

Role Clarity and Employee Retention

Ensuring the clarity of employees’ roles increases their intrinsic motivation as they know that their efforts will lead to certain outcomes. Research on role clarity shows its positive impact on favorable employee outcomes such as organizational commitment and job satisfaction (Mukherjee and Malhotra 2006). This research defines role clarity as the identification of the exact and clear set of responsibilities and tasks as stipulated in the work contract.

Hassan (2013) found that role clarity allows employees to perform their job tasks with high involvement reducing unnecessary confusion in the employees’ minds regarding their specific roles and responsibilities. In this regard, researchers indicated that role ambiguity and role conflict are negatively related to job involvement (Ju et al. 2013; Walia and Narang 2015). On the contrary, (Alblihed and Alzghaibi 2022) indicated that role stress and role ambiguity lead to burnout which eventually leads to high turnover intention. (Karimi et al. 2014) demonstrated that role conflict role ambiguity has a positive influence on employee occupational stress. Kim et al. (2009) found that the impact of role stress on job satisfaction was higher for female employees in the South Korean hotel industry. Further, role clarity was found to positively influence positive employee outcomes such as intrinsic motivation, innovative work behavior, and job involvement (Kundu et al. 2019). Guided by the previous research on role ambiguity and clarity, the third hypothesis is set as follows:

H3. Role clarity has a positive impact on retaining Gen Z employees.

Training and development and employee retention

As a fundamental HRM practice, training and development refer to the degree to which organizations provide training to employees to foster their skills (Delery and Doty 1996). It is generally described as a set of purposeful activities seeking to equip employees with job and career-based skills and ongoing learning (Boon et al. 2011). This study views training and development as providing young employees with formal and informal training and development programs to foster their skills and encourage their retention. The major purposes of providing training and development programs to employees include developing and advancing their skills and capabilities to effectively respond to various organizational challenges (Rhee et al. 2014), developing a successful employee career path through motivating employees and modifying their attitudes toward organizational effectiveness (Yamin 2019).

Research presents various advantages of training and development such as equipping employees with valuable capabilities, knowledge, and skills (Fletcher et al. 2018), and providing fundamental sources for employee retention and competitive advantage (Yamin 2019; Xuecheng et al. 2022). Hence, the fourth hypothesis is postulated as follows:

H4. Training and development have a positive impact on Gen Z employee retention.

The moderating role of gender

Researchers use gender as a moderating variable frequently in business and management literature. For instance, Acheampong (2019) showed that gender plays a significant moderating influence in recruiting and retaining Gen Z employees, especially on employees’ work values. Zhou et al. (2014) found that female users’ satisfaction in social virtual world continuance is closely related to utilitarian and social benefits while male users put a great emphasis on hedonic benefits. Abou-Shouk et al. (2021) showed that employee gender has no moderating impact on the relationship between job satisfaction and intention to leave. Ho et al. (2013) indicated that an employee’s gender has a salient effect on his/her turnover intention. According to, Zhou and Volkwein (2004), female employees are more likely to leave their job than their male counterparts. In this regard, researchers justify females’ high turnover intention based on work-family conflict (Lee 2022), limited career opportunities (Griffeth et al., 2000), weak attachments to the labor market (Khalid et al., 2009), low pay and slow promotion (Mete and Sokmen 2017). Abou-Shouk et al. (2021) found that job satisfaction has almost identical significance for retaining both male and female employees. According to Acheampong (2019), female Gen Z employees attach a high significance to working in a supportive work environment than their male counterparts. Karatepe et al. (2006) showed that employee gender has no moderating impact on the relationship between role ambiguity and job satisfaction.

Former research indicated that male employees are portrayed as independent and rational whereas female employees are characterized as emotional and dependent (Ptacek et al. 1994). Jolly et al. (2021) found that the negative impact of family-supportive supervisor behaviors on employee emotional exhaustion and turnover intentions was greater for female employees. (Karatepe et al. 2006) argued that inconsistent findings of employee gender as a moderating variable can be justified based on cultural differences. (Boles et al. 2003) demonstrated conflicting results on the moderating impact of employee gender differences on the relationship between role stress and job satisfaction. Based on the previous research and our close interactions with a reasonable sample of Gen Z employees, we predict that male employees pay higher attention to pay and role clarity whereas female employees consider working environment and training and development. Accordingly, the following sub-hypotheses are withdrawn as follows:

H5a. The impact of the work environment on the retention of Gen Z employees is greater for females than for males.

H5b. The effect of pay on retaining Gen Z employees is greater for males than females.

H5c. The effect of role clarity on the retention of Gen Z employees is greater for males than males.

H5d. The influence of training and development on employee retention is greater for females than for males.

Method

Exploratory study

An exploratory study was undertaken to identify the relevant HRM practices influencing employee retention from the viewpoint of Gen Z employees. In conjunction with relevant literature (e.g., Jayathilake et al. 2021; Piao 2022; Fernandez et al. 2023), this research defines Gen Z employees as those with birth years roughly between 1995 to 2010. The exploratory study employed two techniques: a short survey and a focus group.

The initial phase of our exploratory study used a short survey. Based on an extensive literature review of the major antecedents of employee retention, we have identified 23 factors as shown in Table 1. These factors can be divided into three types. First, organizational/managerial factors such as transformational leadership, pay, organizational culture, working environment, training, and development. Second, job-related factors such as autonomy, promotion, meaningful work, role clarity, empowerment, enrichment, and career advancement. Finally, employees’ factors such as intrinsic motivation, commitment, and trust. A brief explanation of each factor was provided as a separate attachment in the short survey to ensure that respondents understand them clearly and provide accurate responses.

Table 1 Key factors affecting employee retention.
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We contacted 14 company branch managers in Hangzhou and Jinhua cities operating in five industries: banking, insurance, manufacturing, import and export, and logistics. Managers referred us to some of the employees who meet the sampling criteria. A total of 213 employees agreed to participate in our study. We have created a WeChat group to facilitate communication with our respondents. The short questionnaire link was forwarded to the WeChat group and respondents were given one week to provide their responses.

The short questionnaire was designed to gain respondents’ evaluation of the most important factors affecting their retention using the 5-point Likert scale. The descriptive findings using the mean scores (M) showed that four factors had a salient impact on retaining Gen Z employees: supportive working environment (M = 4.38), pay (M = 4.22), role clarity (M = 4.11), and training and development (M = 4.29). In contradiction to our expectations, Gen Z employees didn’t pay attention to some well-established antecedents of employee retention in academic literature such as leadership style, job satisfaction, work-life balance, and engagement. Accordingly, we have turned our focus to understanding why Gen Z employees emphasize these four factors.

The second phase of our exploratory study used a focus group technique. We have shared the findings of the short survey with our respondents and invited them to a face-to-face interview. Only 9 employees (4 males and 5 females) have accepted the invitation while other employees have apologized and withdrawn. The interview was made in a well-known café in Hangzhou city and lasted for 90 min. We interviewed our respondents in a smooth and friendly manner to encourage their active participation. In this regard, we have broken the ice by asking interviewees to present themselves and their potential career paths. Then, we started to discuss the issue of employee retention and its antecedents from the viewpoint of younger generations. The interview was mainly confined to explaining why the four HRM practices: working environment, pay, role clarity, and training and development are essential for the retention of Gen Z employees. The list of interview questions is summarized in Appendix 1.

Respondents agree that the working environment has a significant impact on their intention to stay at their companies. One of the female employees stated: “Working environment influences me greatly. I will prefer to stay longer in companies with good working conditions and fair organizational policies and practices”. Similarly, two male employees claimed that supportive working employees allow them to perform their tasks effectively and enhance their work engagement which eventually encourages them to stay longer with their companies.

For the organizational pay practices, respondents proclaimed that they put great value on understanding all forms of pay especially the basic salary, overtime, medical and insurance benefits. In this respect, all respondents consider pay as an essential antecedent to their retention. However, one female respondent argued that: “Despite the importance of pay, I consider it a second priority as gaining more experience and advancing my skills will allow me to be promoted and get a high salary in the future”.

Further, respondents believe that they need training and development to better perform their jobs and advance their career path. One male employee argued that: “I believe that I need to have more training because of the difference between what I have studied at the university and a real working environment”.

Finally, all respondents consider role clarity as a fundamental prerequisite for employee retention. One male employee highlighted the following question: “How can I achieve my job tasks effectively when my role isn’t clear?” and argued that “I usually have some confusion such as interfering in my colleagues’ roles and authority “. In this regard, (Piao, 2022) argued that many Gen Z employees complain about the discrepancy between job roles identified during their job interview and current job requirements.

Overall, the findings of the exploratory interviews indicated that pay, training and development, role clarity, and work environment have a significant effect on retaining Gen Z at the workplace. Despite all respondents believing that the four HRM practices are essential for their retention, we observed that male employees consider pay as the highest priority while female employees emphasize the importance of a supportive working environment. Therefore, we decided to examine the impact of these four factors on Gen Z employee retention using a survey questionnaire and employing a larger sample size. Recognizing the difference in ranking the priorities between male and female employees, we decided to use employee gender as a moderator.

Survey questionnaire

Survey questionnaires were administered in four main cities in Zhejiang province: Hangzhou, Ningbo, Jinhua, and Wenzhou during August-December 2022. Given the time and financial constraints and our networks, we have selected these four cities. Additionally, they were selected based on their urban and highly populated cities in Zhejiang province. This study employed a convenience sampling technique to reach relevant research participants and ensure a smooth and accurate data collection process. We targeted companies’ headquarters and big-sized branches. Based on our understanding of Gen Z employees’ characteristics and experience in the Chinese context, we preferred to use printed-out questionnaires instead of online ones. A total of 834 questionnaires were administered to Gen Z employees with 529 responses (63.4%) being valid for data analysis.

To ensure that our sampling criteria are fulfilled, we have developed a screening question to include only Gen Z employees (born between 1995 and 2010). The introductory part of our questionnaire clarified the purpose of our study and provided our contact details. Additionally, we have informed our respondents that their responses are confidential and used only for academic purposes.

Measures

This study has four independent variables, one moderating variable, and one dependent variable. We adopted measurement scales of four continuous variables in the current study from extant and mature literature. Employees’ respondents were assessed using the 5-point Likert scale. The work environment was measured by five items adapted from (Frye et al. 2020). This measurement scale has a composite reliability value of 0.90. Based on a discussion with some professors and our understanding from exploratory interviews, we decided not to use the fifth and sixth items: “physical working conditions of the job match my expectations” and “My organization provides an environment in which I feel safe and secure” due to their irrelevance to our study. Role clarity was measured using the three items developed by Hassan (2013). This measurement scale addresses the employee’s understanding of his/her job tasks, important job duties, and specific responsibilities. The employee’s pay was assessed based on four items developed by Frye et al. (2020). This measurement scale had a composite reliability value of 0.92. The fifth item “I feel satisfied with my changes for pay increases” was not selected as we believe that it was irrelevant for young employees due to their low job seniority or short organizational tenure. Training and development variable was measured using the four items developed by Delery and Doty (1996). This measurement scale is well-established and widely used in academic literature. Employee retention was assessed based on the three items presented by Armstrong‐Stassen and Schlosser (2008). Employee gender was employed as a moderating variable and coded as male (M) or female (F). Appendix 2 presents the items used in measuring each construct.

Findings

Table 2 presents the profile of the respondents. Out of the 529 valid samples, approximately 53% were female employees. This indicates that female employees are actively engaged in the Chinese workforce. For organizational tenure, 60% of the valid sample has work experience ranging between 1–2 years whereas only 32% have work experience of more than 2 years.

Table 2 Employees’ profile (N = 529).
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Chinese Gen Z entered the workplace in 2018 (Yang et al. 2020). Hence, the highest job seniority ranges between 5–6 years only. Such findings indicate the recent entry of Gen Z into the Chinese workforce and the possibility of moving from one company to another during their early work life. For educational background, 84.5% of the valid sample has a bachelor’s degree and works in different industries such as accounting and finance (23%), computer and IT (18.3%), and sales (17.2%). This study didn’t focus on a specific industry as the main aim was to collect data from a larger number of young employees. Hence, we have targeted employees working in different industries.

Evaluation of the measurement model

The initial phase of data analysis focused on evaluating the measurement model using three measures: reliability, discriminant validity, and convergent validity of all the constructs for the whole sample (529) and sub-samples: female group (278), and male group (251). The research model was tested using a component-based PLS-SEM using Smart-PLS version 2. This parametric approach is recommended to figure out between-group differences (e.g., people with different genders) when the sample size is large (Hensler et al. 2009).

Table 3 indicates that all constructs have an adequate level of reliability with Cronbach’s alphas and composite reliabilities values higher than 0.7. In addition, the convergent validity of the constructs was fulfilled as the reported factor loadings were more than 0.7 (Gefen and Straub 2005) with a significant t-value (>1.96 when p < 0.05). Further, Table 3 showed that the discriminant validity for all constructs was established as the reported square root of AVE for each construct is higher than the correlations between constructs in all cases (Gefen and Straub 2005). Similarly, the discriminant validity for the study constructs for the sub-samples were established as shown in Table 4 Moreover, the multicollinearity problem does not exist as the squared correlations between constructs in the correlation matrix did not exceed 0.8 as shown in the confirmatory factor analysis results in Tables 5 and 6. Similarly, the reliability and validity findings shown in Table 6 have validated the measurement model for both sub-samples. Accordingly, we proceed with examining the potential moderating role of employee gender using between-group analysis.

Table 3 Construct Reliability and Validity for the Full Sample (N = 529).
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Table 4 Confirmatory factor analysis for the full sample (N = 529).
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Table 5 Constructs reliability and validity for sub-samples.
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Table 6 Confirmatory factor analysis for sub-samples.
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Path estimate for the full sample

The multigroup using PLS-SEM analysis allows researchers to figure out if pre-determined data groups have significant differences in their group-specific parameter estimates such as outer loadings, weights, and path coefficients based on bootstrapping results from each group (Hair et al. 2019). In testing the potential differences between the male and female groups, we have employed the Partial Least Squares Multigroup Analysis method. This method builds on the PLS-SEM bootstrapping results to show the non-parametric significance test for the difference of group-specific results. More specifically, a result is significant at the 5% probability of error level, if the p-value is smaller than 0.05 or larger than 0.95 for a certain difference of group-specific path coefficients (Hensler et al. 2009).

A bootstrapping technique was used to examine path significance and explanatory power for the structural models (Hensler et al. 2009). Given the unidirectional nature of our research hypotheses, we assessed all statistical tests at (p < 0.05) using one-tailed t tests. The findings showed a positive significant impact of work environment, pay, role clarity, and training and development on Gen Z employee retention (p < 0.001). Findings showed that 41.2 % of the variation in Gen Z employee retention was explained by work environment (β = 0.419), pay (β = 0.327), role clarity (β = 0.214), training and development (β = 0.395). Accordingly, H1, H2, H3, and H4 are supported for the whole sample.

Between-group analyses: gender differences

This study has modeled employee gender as a moderating variable. Table 7 shows the path comparison between the two sub-samples (male and female employees). Building on a parametric assumption, the component-based approach takes the standard errors for the structural paths and compares the corresponding paths across different groups by performing t tests on their path coefficients, with the pooled standard error (Hensler et al. 2009). We used a Multi-group PLS analysis to compare the changes in coefficient values based on the p values and tspooled values.

Table 7 Path comparison statistics between females and males group.
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The findings gained from the multi-group analysis revealed that the path coefficient from the working environment to the retention of the female employees is significantly stronger than of the male model (tspooled=13.297, Female path Coeff. = 0.274, Male path Coeff. = 0.146), supporting H5a. On the contrary, the path coefficient from role clarity to the retention of the male model was significantly higher than that of the male model (tspooled = −14.813, Female path Coeff. = 0.226, Male path Coeff. = 0.394), supporting H5c. Further, the path coefficient from pay to the retention of the male model is significantly stronger than that of the female model (tspooled = −15.793, Female path Coeff. = 0.192, Male path Coeff. = 0.372). Such findings support hypothesis H5b and infer that male Gen Z employees consider higher pay as a fundamental antecedent to retention than female employees.

Finally, the path coefficient from training and development to employee retention for the male model was not significantly lesser than that of the female model (tspooled = 11.863, Female path Coeff. = 0.297, Male path Coeff. = 0.171). This leads to rejecting hypothesis H5d and concluding that both male and female Gen Z employees pay increasing attention to training and development.

Discussion and implications

Discussion of the results

Empirical findings indicate that organizations can motivate Gen Z employees to stay longer in the workplace by securing a supportive work environment, providing training and development, competitive pay, and clarifying job roles. Such findings are consistent with various studies in the extant literature on retention. Even though every human is individual, generational studies allow researchers and practitioners to withdraw certain limitations and strengths, especially in work-related topics (Dwyer and Azevedo 2016). Our study goes in line with the argumentation that each generation comprises favorable and unfavorable characteristics that influence workplace outcomes (Costanza and Finkelstein 2015; Schroth 2019; Yang et al. 2020; Gaan and Shin 2022).

There is a great consensus on the positive influence of a supportive work environment on employee retention(Frye et al. 2020; Halim et al. 2020; Naz et al. 2020; Wu et al. 2020; Xuecheng et al. 2022). Chinese Gen Z put a great emphasis on the working environment, training systems, and learning opportunities when selecting their career paths (Yang et al. 2020). Naz et al. (2020) underlined that a supportive work environment has a positive significant impact on the retention of employees working in multinational fast-food brands in Pakistan. Organizations can boost positive and favorable employee outcomes by creating a work environment that supports divergent views and add value to different generation cohorts (Dwyer and Azevedo 2016). In addition, existing literature advocates the importance of pay in retaining employees including the Gen Z cohort. Gen Z employees pay attention to securing financial stability (Csiszárik-Kocsír and Garia-Fodor 2018; Bharath 2021; Pichler et al. 2021), and gaining competitive salary (Acheampong, 2021).

Further, role clarity was found as a significant determinant of employee retention. Hassan (2013) argued that the positive impact of role clarification on reducing turnover and increasing work satisfaction is mediated by employees’ perceived role clarity. On the contrary, many researchers indicated that role stress and ambiguity are positively related to employee turnover (Kim and Stoner 2008; Karimi et al. 2014; Alblihed and Alzghaibi 2022). Moreover, training and development are considered vital HRM practices to retain employees. Our findings are consistent with existing studies on the positive influence of training and development on employee retention (Ghosh et al. 2013; Aguenza and Som 2018; Bibi et al. 2018; Acheampong 2021; Xuecheng et al. 2022).

Finally, our empirical findings on the moderating role of employee gender showed that female employees put high emphasis on supportive working environments and training and development to stay in their companies whereas male employees consider pay and role clarity as essential antecedents to their retention at the workplace. Such findings are compatible with extant literature (Ho et al. 2013; Mete and Sokmen 2017; Abou-Shouk et al. 2021). Therefore, employers need to consider employee gender when designing and implementing effective HRM practices to retain their employees. Our findings direct the attention of HR managers to consider the expectations of Gen Z employees and their evaluation of influential HRM practices to retain them successfully. Overall, we may argue that companies providing a supportive working environment (social, physical, and interactive), fair and competitive pay, sufficient and effective training and development programs, and identifying job roles shall be capable of retaining Gen Z employees.

Theoretical implications

The findings of our research approve the applicability and relevance of the SET to explaining employee retention based on a set of HRM practices: supportive working environment, training and development, pay, and role clarity. The core of SET is to explain the factors affecting the exchange relationship between organizations and their employees more specifically in the employee retention and turnover literature (Coyle-shapiro and Conway 2005). The implementation of such HRM practices creates reciprocated obligations and facilitates mutual benefits between organizations and their employees. This study responded to calls for more research on the retention of Gen Z as an underdeveloped research stream that requires further development (Benítez-Márquez et al. 2022). Lee et al. (2022) argued that organizations need to consider different generations of employees and understand the major factors affecting their motivation and retention. Further, our research extends the applicability of SET to explaining employee retention based on employee gender. Empirical results revealed that male employees put a high emphasis on pay and role clarity while female employees pay increased attention to the working environment and training and development.

Practical implications

The results of this study advocate the importance of four major HRM practices in retaining Gen Z employees: working environment, pay, role clarity, and training and development. Employers need to ensure that the working environment is supportive for Gen Z employees. This can be achieved by designing effective organizational policies and practices and ensuring that social and physical work environments allow active engagement and match the expectations of Gen Z employees.

Organizations need to provide effective training and development programs to advance employees’ careers. In this regard, organizations need to consider the expectations of Gen Z employees and design tailored training and development programs using the latest technologies to equip them with knowledge and experience to better perform their job tasks and stimulate their retention. Additionally, employers need to provide fair and competitive pay to their Gen Z employees to enhance their intention to stay longer at the workplace.

Unexpectedly, the Gen Z cohort put role clarity as one of the priorities to keep working with their companies. According to Zhao and Rashid (2010), employees may face the issue of role ambiguity when their job’s roles, requirements, and expectations are not clear. This indicates that employees lack sufficient information about the exact duties of their jobs. In this regard, Palomino and Frezatti (2016) argued that the essential information required to perform a specific job includes the fundamental activities to be performed to correspond to the job requirement, relevant expectations from the employee, and consequences of adhering to or not fulfilling the job requirements, determining the reward or compensation for specific behaviors, and clarifying career advancement opportunities. Hence, employers need to identify the employees’ roles and responsibilities. This can be achieved through designing a clear job description and work contract terms. Employers may need to review their current HRM policies to identify the best practices to retain Gen Z employees. HR managers need to solve potential conflicts or misunderstandings related to identifying the exact job tasks. For instance, they may justify assigning employees extra tasks to enhance their experience, develop new skills, and boost their pay and promotions.

Finally, employers need to consider the difference in expectations between male and female employees. We may argue that a dysfunctional organizational structure leads to decreasing the clarity of employees’ roles which may negatively influence their ability to accomplish job tasks. Our research indicated that male employees put a high value on pay and role clarity to stay at their companies whereas female employees consider the working environment and training and development to be more important for their retention. Accordingly, organizations may need to consider such expectations and tailor their HRM practices to adapt to employees’ needs and expectations. In this vein, companies need to recognize the generational difference among employees and respond to their distinguishing needs by breaking the traditional approaches by using the existing tools in innovative ways such as employing online recruitment as an initial step (Tato-Jimenez et al., 2019). Similarly, Graczyk-Kucharska and Erickson (2020) stressed the need for HR departments to pave the way for changing organizational culture and changing workplace values and culture to adapt to the needs of Gen Z employees.

Limitations and further research

Based on an exploratory study, we have identified four influential HRM practices affecting the retention of Gen Z employees: supportive work environment, pay, role clarity, and training and development. Our empirical findings revealed that these four practices had a significant positive impact on Gen Z employee retention. Further, the multi-group PLS analysis indicated that a supportive working environment and training and development are more important for female employees, whereas pay and role clarity had a salient impact on retaining male employees.

The findings of this research should be employed with the consideration of some limitations. First, given the cross-sectional nature of our study, future research may use a longitudinal design or case study method to gain a deep understanding of Gen Z employees’ retention. Second, this research was undertaken in the Chinese context. Recognizing the characteristics of Chinese Gen Z employees and their working environment, the generalization of our study findings can be challenged. Hence, the proposed model can be tested in different contexts to ensure its validity and generalizability. Deery and Jago (2015) argued that employee retention is dependent on the country’s economic growth, culture, availability of talented employees, and the number of public and private companies. Additionally, the proposed model in our study can be extended using some mediating or moderating factors such as intrinsic motivation, transformational leadership, and organizational commitment. Further research can be conducted in other developing or developed countries to further validate or reject the approved hypothetical relationships employed in this study. The selection of HRM practices influencing employee retention was based on the young employees’ perception. Hence, our findings should be applied in other contexts with caution. Third, despite the simplicity of using the Partial Least Squares Multigroup Analysis method and its appropriateness for analyzing large sample sizes and withdrawing certain conclusions, it may generate less accurate estimates. Hence, future research may consider the use of other statistical software, a small sample size, or using qualitative research method. Finally, future research may pay specific attention to the impact of role clarity on the retention of Gen Z employees.