Effects of Training and Development, Organizational Culture, Job Satisfaction, and Career Development on Employee Retention in Commercial Banks in Bangladesh

Abstract

In the current era of globalization, financial and banking organizations have been facing ever-growing challenges in the global market regarding retention, customer satisfaction, commitment, engagement, proper services, and the belief of their employees. Employees are regarded as an enormous asset for every organization that plays an important role in achieving the vision of the company. The objective of this study is to explore the determinants of bank employee retention and its impact on an organization in the context of Bangladesh. In terms of research purpose, non-probability convenience sampling has been used in this study, and the targeted population was the commercial bank employees of Bangladesh. In terms of data collection, the researchers have used the adopted questionnaires from previous studies. In this study, the total sample size was 180, and a questionnaire was sent to the respondents through e-mails. For analyzing the collected data, SPSS 26.0 version has been used to test the study model and the proposed hypotheses. This study shows that there were four independent variables training and development, organizational culture, job satisfaction, and career development have a positive and significant impact on employee retention. So, the bank management should organize the retention program for the welfare of the employees.

1. Introduction

Nowadays financial sector is considered the driving engine of the economy of a nation, where the banking sector plays a significant role in developing the economy of a country (Ogony & Majola, 2018; Akhter et al., 2020). On the other hand, the banking sector is growing gradually in Bangladesh with competition from one bank to another (Jahan et al., 2020). The major challenge for every bank is to stay in the competitive market by providing better services to the customers and these services depend on qualified employees of a bank (Shan et al., 2014). Therefore, qualified employees are a crucial asset of an organization where the employer can easily obtain profit within a specified time by utilizing the effort of the employees. Any organization’s long-term performance, which depends on the retention of qualified people, is largely determined by its core employees. To a great extent, organizational performance, customer satisfaction, effective succession planning, etc., are dependent on the best employees in any organization (Mahmud et al., 2015). On the one hand, inspiring employees to remain in the organization for a long period of time can be considered the retention of an employee, and it is the best process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project (Coetzee & Stoltz, 2015).

In the era of globalization, the retention of qualified employees is very difficult and the management of every organization finds out a way to retain their employees and gain a competitive advantage (Khan et al., 2011; Rahaman et al., 2021a, 2021b, 2021c; Rahaman et al., 2020). Also, employee retention is defined as retaining the employee in an organization by providing attractive facilities. Retention prevents the organization from working or considering long-term planning, thus management must determine the causes. Previous studies found that some factors impact employee retention like job satisfaction, employee motivation, compensation & rewards, and job security (Do & Phan, 2020; Samuel & Chipunza, 2009; Ai et al., 2022). But this study lacks certain crucial elements that help a business retain its competent workers, such as training and development, organizational culture, job satisfaction, and career growth (Chen et al., 2022a; Prajapat, 2022). As a result, the bank management should learn about the aforementioned aspects to lower employee turnover in the company. The main objective of this study is to measure the influencing factors of retention of bank employees.

2. Literature Review

2.1. Employee Training and Development

Employee training means learning new knowledge, skills, and abilities to perform work effectively and efficiently in an organization (Ali & Dahana, 2021). However, training, including on-the-job training, vocational training, and general and specific training vital for the retention and development of employees (Magaisa & Musundire, 2022). On the other hand, training and development are considered the significant factor in employee retention which increases the skills of employees (Nishanthi & Kailasapathy, 2018). From the past study, it can be said that organizations often arrange employee training programs to determine the knowledge gap and enhance the skills of the employees (Chen et al., 2022a; Chen et al., 2022b). However, training and development are the major sources of creating skillful employees in an organization, and it has a positive and significant effect on employee retention (Rahaman et al., 2021a). Another study also recommends that training gives specialized techniques and skills to the employee and also helps to rectify deficiencies in employee performance, while development provides the skills and abilities to the employee who will need the organization in the future (Chee et al., 2022; Rahaman et al., 2021b). In the above-mentioned literature, the hypothesized can be developed as:

H1: Employee training and development has a positive and significant impact on employee retention.

2.2. Organizational Culture

Culture is defined as the important indicator of employee retention, which supports to make collaboration among employees in a working environment. Culture assists in changing the feelings, thinking, and attitudes of employees in the workplace (Chen et al., 2022c). On the other hand, organizational culture consists of a company’s beliefs, values, and attitudes and how these influence the behavior of its employees in that organization (Asheq & Hossain, 2019). From the previous studies, it can be assumed that organizational culture encourages employees to work enthusiastically and assist in staying in the organization (Rahaman et al., 2020). Besides, organizational culture has a positive and significant effect on employee retention, which helps to develop ethics, attitudes, behavior, entertainment activities, and so on (Yuan et al., 2021). Henceforth, there is a need for a link between individual and organizational culture to grow employee retention (Aliff, 2017). On top of it, organizational culture is a key factor in revealing employee engagement and loyalty (Singh, 2019). From the above literature, it can be developed the following hypothesis:

H2: Organizational culture has a positive and significant impact on employee retention.

2.3. Job Satisfaction

Job satisfaction is regarded as the mental and physical satisfaction in a job that encourages employees to perform willingly. On the other hand, job satisfaction can be defined as the mental satisfaction of employees in their job regarding facilities. From previous studies improving and maintaining employee satisfaction is crucial for achieving the goals of the organization (Nazia & Begum, 2013). Besides, employee satisfaction drives employee retention in the service profit chain (Rombaut & Guerry, 2020). Lack of job satisfaction contributes to poor retention (Mehta et al., 2014). Henceforth, the employee becomes dissatisfied when the output attained from the organization is less than expected (Khan & Aleem, 2014; Rahaman & Uddin, 2022). Therefore, individual sense of attainment, personal satisfaction, and realizing long-term personal goals are the factors of satisfaction that improve employee retention. On top of them, past studies explained that job satisfaction has a positive and significant impact on employee retention (Ali et al., 2022a, 2022b). From the literature review, the hypothesis can be developed in the following way:

H3: Job Satisfaction has a positive relationship with employee retention.

2.4. Career Development

Career development is a crucial factor in employee retention, which creates attention to the job in the organization. On the one hand, training and career opportunities have a direct effect on employee retention (Yuan et al., 2022). Besides, employee engagement and loyalty basically depend on career development that supports retaining qualified employees in the organization (Clarke, 2015). A past study also recommends that career development opportunities directly affect employee retention, which showed a strong positive association between them (Sinha & Sinha, 2012). Employees greatly value long-term career development (Hemalatha & Savarimuthu, 2013; Rahaman et al., 2022), and career opportunities strongly affect employee loyalty and retention in the organization (Mohlala et al., 2012; Ali et al., 2022a). From the above-mentioned literature, the hypothesis can be developed that:

H4: Career development has a positive and significant impact on employee retention.

2.5. Conceptual Model

The study proposes the following Figure 1 as the conceptual model of this research:

Figure 1: Conceptual Model

3. Methodology

The non-probability convenience sampling method has been used in this research due to the number of employees of commercial banks. This study was quantitative and exploratory, and the targeted population was the employees of commercial banks in Bangladesh. The primary data was used in this study and the online survey questionnaire was developed based on past studies for data collection purposes. The e-mail ids of bank employees were collected by supporting the branch manager, and questionnaires were sent to 230 commercial bank employees through their collected e-mail ids. Among them, 200 responses were received, whereas 20 responses were removed due to incompleteness. So, the final sample size in this study was n = 180, and the response rate was 86% from the respondents. In this study, the survey questionnaire has two parts where part one indicates demographic information and part two mentions survey questionnaires on study variables, On the other hand, the survey questionnaire was given clarification for easy understanding of the respondents based on the study constructs such as training and development (TD), organizational culture (OC), job satisfaction (JS), and career development (CD). For data collection, the item-wise questionnaire was measured on a 5-point Likert scale, where ‘1’ stands for ‘Strongly Disagree’ and ‘5’ stands for ‘Strongly Agree’. The SPSS 26.0 version has been used to test the study model and the proposed hypotheses where the 5% significance level is considered to accept inferences.

Table 1 represents the reliability of the study variables found acceptable. In this study, to measure the reliability of the constructs, a Cronbach Alpha (α) value of 0.70 or more than 0.70 was considered an acceptable value where the constructs of TD, OC, JS, and CD were found reliable as TD (α = 0.751); OC (α = 0.787); JS (α = 0.798 and CD (α = 0.783).

Table 1: Cronbach Alpha (α) Value of the Variables

4. Results and Discussion

The total number of respondents in this study was 180, where males were 67% (n = 120), and females were 33% (n = 60). In terms of respondents’ age, there were 28% between 25–30 years, while 39% were between 31–35 years. On the other hand, 25% of respondents age were between 36–40 years (n = 45), and 8% of respondents age were above 40 years (n = 15). According to marital status, 69% of respondents were single, where the number was 125, and the total number of married respondents was 31% (n = 55). In terms of job experience, there were 42% of respondents between 0–5, and 44% of respondents’ job experience was between 6–10 years. On the other hand, the number of respondents who had job experience of more than 10 years their number was 14% (n = 25) (Table 2).

Table 2: Descriptive Statistics

From Table 3, it can be explained that in this study, the value of R² = 0.853 or 85.30% means the variance which indicates four independent variables, namely training and development (TD), organizational culture (OC), job satisfaction (JS), and career development (CD). In this research, the above-mentioned variables are accepted at a 5% significance level which determines that training and development, organizational culture, job satisfaction, and career development have a positive and significant impact on bank employee retention in Bangladesh (Figure 2).

From the result of the regression analysis (Table 3 and Figure 2), it can be said that hypothesis one is training and development, which has positive and significant effects on employee retention, and it is accepted at the 5% significance level (β = 0.693, p < 0.05). Also, the previous literature supports that training and development have significant effects on employee retention (Chee et al., 2022; Rahaman et al., 2021b). Hypothesis two indicates that organizational culture has a positive effect on employee retention, which is accepted at the 5% significance level (β = 0.774; p < 0.05). This finding is also constant with past studies, as organizational culture has a relationship with employee retention (Singh, 2019). From table four, in terms of job satisfaction, there is a positive and significant effect on employee retention, which is accepted at the 5% significance level (β = 0.768, p < 0.05) where this result is related to the past studies. Previous studies also explained that job satisfaction is the key indicator of retaining qualified employees in an organization (Rahaman & Uddin, 2022). Furthermore, H4 mentions the career development that is accepted at the 5% significance level (β = 0.749, p < 0.05). From this regression analysis, it can be assumed that career development has a positive and significant impact on employee retention. A past study also recommended that career development is a crucial factor in employee retention which has a positive impact on employee retention (Jung & Yoon, 2013; Hemalatha & Savarimuthu, 2013; Rahaman et al., 2022).

Table 3: Regression Analysis

R² = 0.853 or 85.30%. Durbin Watson value = 1.768. Dependent variable: Employee Retention. **Significant at 5% [n = 180].

Figure 2: Results of Regression Analysis

5. Conclusion

Employees are the key assets of any organization, and they play a significant role in staying in the competitive market in this globalization era (Lee & Way, 2010; Álvarez-García et al., 2016). Bangladesh’s banking sector is expanding quickly, driving up competition and expanding this market segment today. (Balser & Harris, 2008). The main objective of the bank is to provide attractive services to customers who depend on qualified employees of the banks. Therefore, the management of a bank should determine the factors for retaining qualified employees in the organization, which will assist in staying in the fierce market (Tso et al., 2015; Gu & Itoh, 2020). In this study. It can be assumed that training and development, organizational culture, job satisfaction, and career development are considered the key indicators of employee retention, which have a positive and significant impact on retaining qualified employees in the bank (Dixon & Warner, 2010). The main goal of this study was to determine the influencing factors of bank employee retention. This study also found that 85.30% of variance denotes four independent variables, such as training and development, organizational culture, job satisfaction, and career development have a positive and significant impact on employees of commercial banks in Bangladesh. This study also suggested that bank management should determine the factors for retaining qualified employees based on new strategies, such as improvement in the employee retention program in commercial banks in Bangladesh.