ESG in HRM Policies: Retaining and Engaging Generation Z Employees in Private Higher Education Institutions

Objective: The importance of incorporating ESG (Environmental, Social, and Governance) principles in influencing employee retention and engagement, especially among Gen Z, is increasingly recognized. However, a gap exists between corporate ESG efforts and employees’ perceptions in private HEIs in Indonesia. This study investigates the influence of ESG integration into HRM practices on employee retention and engagement, with organizational commitment as a mediating variable and Generation Z’s demographic traits as a moderator. Research Design & Methods: A quantitative design using PLS-SEM was applied to 270 respondents from 138 private universities in Bandung City. The sample was determined through Slovin’s formula (5% margin of error) and stratified random sampling by job strata. Findings: ESG integration positively affects organizational commitment and employee engagement but does not directly influence retention. Organizational commitment mediates the relationship between ESG practices, retention, and engagement. The moderating effect of Gen Z traits significantly weakens these positive relationships, indicating the need for tailored organizational commitment strategies that match Gen Z values and expectations. Implications & Recommendations: Private HEIs should strengthen organizational commitment by implementing ESG-based HRM policies aligned with Gen Z preferences to enhance retention and engagement. Contribution & Value Added: This study extends ESG-centric HRM literature by highlighting the need to design ESG initiatives that address young employees’ concerns to support organizational performance and long-term sustainability.