Determinants of job retention among foreign workers in the electronics industry: The role of job satisfaction, employee engagement, and compensation

Abstract

Retention of foreign workers has become a critical concern for organizations that rely heavily on this labour segment. They make up the majority of workers in low- and semi-skilled jobs in Malaysia and account for 20% of the workforce. However, an observation in a multinational electronic company recorded a turnover rate of approximately 28.6% in 2023, a level considered significantly high for an organization dependent on foreign workers for operational continuity and production activities. This rate surpasses the industry’s average threshold for healthy labour retention, suggesting underlying issues in organizational practices, worker satisfaction, and overall employment experience. Frequent resignations and employee migration not only disrupt productivity but also lead to long-term operational inefficiencies. The quantitative cross-sectional study examined how job satisfaction, employee engagement, and benefits and compensation affect foreign workers’ job retention in an electronics multinational corporation (MNC). The results showed that only benefits and compensation predicted foreign workers’ job retention. This implies that while intrinsic motivators like satisfaction and engagement improve employee experiences, extrinsic support systems, especially compensation and benefits, are most important in retaining migrant labour. The findings offer critical insights for HR practitioners seeking to reduce turnover and enhance long-term organizational sustainability through more effective and tailored retention strategies.