Factors Affecting Employee Retention in the Service Sector (A Case Study of the Hotel Industry)

The driving force of any organization is its people—its workforce. Therefore, it is important for organizations to implement optimal human resource policies and retain employees. This, in particular, has become one of the most pressing issues for Mongolian service organizations. This shows the need for research on the factors influencing employee retention, particularly in the hotel industry. The aim of this study is to analyze the factors affecting employee retention in the hotel sector of the Mongolia. Extensive research has examined the employee retention in tourism and hospitality. However, empirical validation remains scarce in Mongolia. We validate theoretical propositions and that work-related factors, structural factors, and interpersonal factors are positively and strongly related to employee retention in the Mongolian hotel industry. We developed our research model by selecting only the factors influencing employee retention from the model proposed by the Insync HR Research Institute in Australia in 2012. In order to identify the factors influencing the stability of employees in this industry, 103 employees from 22 hotels operating in Mongolia were randomly selected to participate in a survey. The survey revealed that work, structural and interpersonal factors have a strong positive relationship with the stability of employees. The study recommends factors to ensure the stability of employees. This is important for retaining employees with knowledge and skills, thereby increasing the competitiveness of the organization. This study helps to pay attention to work-related factors, structural factors, and interpersonal factors to ensure the stability of employees in the human resources plan for the hospitality industry. Our analysis informs recommendations for successfully retaining employees in an organization.