THE SYNERGY OF PSYCHOLOGICAL CAPITAL AND JOB EMBEDDEDNESS: EXTENDING THE CONSERVATION OF RESOURCES THEORY IN HOSPITALITY EMPLOYEE RETENTION

Psychological capital (PsyCap), comprising hope, self-efficacy, resilience, and optimism, is a critical psychological resource that enhances employee retention (ER) in the hospitality industry. Grounded in the Conservation of Resources (COR) theory, this study examines the direct impact of PsyCap on ER and explores job embeddedness (JE) as a mediating factor. JE represents the psychological and social forces that keep employees attached to their organization, reducing turnover intentions. The study surveyed 429 frontline employees working in five-star hotels across Saudi Arabia, and the data were analyzed using partial least squares structural equation modeling (PLS-SEM). The findings reveal that PsyCap significantly enhances JE by strengthening employees’ alignment with organizational values, relationships, and career opportunities. Employees with higher PsyCap demonstrate greater job satisfaction and a stronger sense of belonging, leading to reduced turnover intentions. Additionally, JE positively influences ER, confirming its crucial role in hospitality workforce stability. Importantly, JE partially mediates the relationship between PsyCap and ER, illustrating its role in transforming psychological resources into actual retention outcomes. These insights provide practical implications for hospitality managers aiming to mitigate high turnover rates. Investing in PsyCap-enhancing initiatives—such as resilience training, career development programs, and mentoring—can cultivate stronger employee embeddedness. Similarly, strengthening JE through organizational strategies, including fostering social connections, aligning company values with employee expectations, and improving career progression pathways, can further reduce attrition and enhance organizational performance. The study contributes to COR theory by integrating PsyCap and JE into the context of the hospitality industry, offering a more comprehensive understanding of their influence on ER. Future research should explore the long-term effects of PsyCap on ER through longitudinal studies and examine additional moderating variables, such as organizational culture and leadership styles, to provide a deeper understanding of employee retention dynamics.