The Effect of Employee Well-being and Perceived Organizational Support on Employee Retention through Employee Engagement as an Intervening Variable

Ardianta Rabu, September 02, 2026
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FORMOSA NEWS

Employee Well-Being and Organizational Support Crucial for Worker Retention in Indonesian Rubber Plantations

Employee well-being and institutional support serve as essential drivers determining workforce stability within the plantation sector. A scientific study published in June 2026 by Dinda Dwi Lestari, Yeni Absah, and Yasmin Chairunnisa Muchtar from Universitas Sumatera Utara reveals that employee well-being and perceived organizational support significantly increase staff retention in Indonesian rubber plantation companies. Conducted between January and March 2026 among 160 office employees, the research proves that employee engagement acts as a vital psychological bridge that reinforces worker commitment and minimizes turnover in demanding agricultural industries.

High employee turnover poses a persistent challenge in modern human resource management, directly threatening operational stability, recruitment efficiency, and long-term enterprise sustainability. The rubber plantation sector operates under distinct conditions characterized by high operational demands and rigorous production targets. In such challenging environments, traditional retention strategies relying solely on basic financial compensation are often insufficient. Consequently, this study addresses how work-life balance, role clarity, and organizational appreciation retain valuable personnel by fostering psychological comfort and workplace dedication.

To investigate these organizational dynamics, the research team from Universitas Sumatera Utara employed a quantitative associative design with an explanatory research approach. Data collection was conducted using structured questionnaires distributed to 160 office employees with a minimum of one year of tenure, selected proportionally from a total population of 267 workers. The primary data collected between January and March 2026 was processed through Structural Equation Modeling based on Partial Least Squares (PLS-SEM) using SmartPLS 4.0 software. This analytical framework enabled the authors to evaluate indicator validity, path coefficients, and mediating relationship structures.

Statistical evaluation yielded key empirical insights regarding employee welfare, workplace support, and retention rates:

  • Employee Well-Being Drives Engagement: Comprehensive physical, psychological, and social well-being exerts a strong positive effect on employee engagement (path coefficient $\beta = 0.524$; $t = 10.061$; $p = 0.000$). Well-being serves as the dominant predictor of engagement, exhibiting a large effect size ($f^2 = 0.493$), with role clarity identified as the strongest individual indicator.
  • Organizational Support Boosts Commitment: Perceived organizational support, reflected through concern for employee welfare and contribution recognition, significantly enhances work engagement ($\beta = 0.341$; $t = 6.335$; $p = 0.000$).
  • Direct Influence of Engagement on Retention: Employee engagement—characterized by vigor, dedication, and task absorption—exerts a powerful direct effect on workforce retention ($\beta = 0.486$; $t = 6.905$; $p = 0.000$).
  • Direct Impacts on Employee Retention: Both employee well-being ($\beta = 0.209$; $t = 3.065$) and perceived organizational support ($\beta = 0.225$; $t = 3.996$) directly increase long-term employee retention.
  • Mediating Mechanism of Engagement: Variance Accounted For (VAF) analysis confirms that employee engagement partially mediates the effect of well-being ($\beta = 0.255$; $t = 5.701$; VAF = 54.96%) and organizational support ($\beta = 0.166$; $t = 4.720$; VAF = 42.46%) on retention. Overall, the model explains 63.1% of the variance in employee retention ($R^2 = 0.631$) and 54.6% of the variance in employee engagement ($R^2 = 0.546$).

These findings present actionable strategies for human resource executives, agricultural industry managers, and policy experts. Retention strategies in operational sectors must transcend basic salary structures by incorporating holistic wellness initiatives, mental health support, flexible arrangements, and clear job boundaries. Furthermore, enhancing operational resources, supervisor support, and formal recognition programs is essential to building an emotionally engaged workforce capable of sustaining long-term organizational growth.

Reflecting on the critical link between organizational environment and staff loyalty, the research team from Universitas Sumatera Utara highlighted that psychological attachment is key to mitigating turnover. "Employee well-being and organizational support operate far more effectively in improving retention when they successfully foster employee engagement, as emotionally connected employees demonstrate significantly lower intentions to leave the organization," noted Dinda Dwi Lestari and her co-authors.

Author Profiles

  1. Dinda Dwi Lestari, S.E., M.Si.: Lead researcher and scholar at Universitas Sumatera Utara, specializing in Human Resource Management, Organizational Behavior, and Employee Retention.
  2. Yeni Absah, S.E., M.Si.: Academic and senior researcher at Universitas Sumatera Utara, with expertise in Strategic Human Resource Management and Organizational Behavior.
  3. Yasmin Chairunnisa Muchtar, S.P., M.Si.: Lecturer and researcher at Universitas Sumatera Utara, focusing on Human Resource Management, Organizational Development, and Employee Performance.

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