Looking beyond HRM practices in enhancing employee retention in BPOs: focus on employee–organisation value fit

TLDR

The study posits that employee–organisation value fit can strengthen the impact of HRM practices on retention. The authors employed structural equation modeling on 258 Philippine BPO employees to test this hypothesis. Results show that employee–organisation value fit partially mediates the effect of HRM practices on retention, with value clashes in US‑owned BPOs reducing retention, indicating that aligning values through HRM can improve employee retention, especially in developing‑country BPOs.

Abstract

This paper argues that the effectiveness of HRM practices in tackling employee retention can be enhanced by improving the compatibility between employee and organisational values. We test our hypothesis using structural equation modelling on a sample of 258 employees in business process outsourcing (BPO) firms in the Philippines. The results show that the fit between employee and organisation values positively and partially mediates the effects of HRM practices on employee retention. However, employee–organisation value clash in US-owned BPOs was found to have a negative effect on employee retention. Because employees are less likely to leave when they share similar values as their organisations, HRM practices can be used strategically to improve the employee–organisation value fit to improve retention. The implications of the findings for HR managers of BPOs in developing countries are fully discussed.