Psychological capital matters for employee retention: Voices from the United Arab Emirates

In response to growing interest in the potential for psychological capital (PsyCap) to improve retention in the post-COVID environment, this paper assesses the relationship between PsyCap and employee retention and explores changing attitudes towards the role of PsyCap in the United Arab Emirates (UAE). The study used a mixed methods research design to investigate the relationship between PsyCap factors and employee retention in private-sector organizations in the UAE. Four hundred employees from private sector organizations participated in a (quantitative) survey whilst thirty informants from a consulting organization took part in (qualitative) focus group interviews. The analysis of the survey data reveals a positive relationship between the independent variable (PsyCap) with the dependent variable (Employee retention) in our sample of private sector employees in the UAE. Qualitative data generated from informants signal a new interest and changing management attitudes towards PsyCap in organizations due primarily to the impact of COVID-19 and UAE government strategies. This paper adds value in providing findings from the specific nexus of retention and PsyCap in mapping attitudinal changes to PsyCap in the UAE and suggesting the possibilities for leveraging this interest within organizations. This research provides a rationale for managers and leaders to incorporate more strategic approaches to PsyCap within their talent management strategies, such as: 1) integrating PsyCap development into broader organizational culture initiatives rather than treating it as an isolated intervention; 2) fostering a positive work environment that enhances employees’ psychological capital and improves engagement and retention; 3) leveraging PsyCap assessments and targeted development programs to identify and support high-potential employees.