The Role of High-performance Work Systems in Sustaining Employee Retention in the Construction Industry

Purpose: Retaining employees becomes challenging for employers, especially when experiencing a high turnover rate. Organisations put substantial effort into retaining their employees. The purpose of this article is to shed light on the contribution of high-performance human resource practices (HPHRP) in building employees’ intention to remain (IR) with the organisation for a longer period. Design/Methodology/Approach: The study samples 238 employees from the Indian construction sector to empirically test and conclude the research. The authors first validated the data collected through a confirmatory factor analysis (CFA) approach and then performed structural equation modelling (SEM) to test the hypothesised relationship. Findings: The results suggest that employers implement the HPHRP, especially internal career opportunities, incentives and compensation, and participation and communication practices that stimulate a positive intention among the construction industry employees to stay with the current organisation for a longer period. Research Limitations/Implications: The study is limited to the Indian construction sector. The scholars are encouraged to study more dimensions of HPHRP and empirically test their relationship with other employee performance and organisational performance measures. Practical Implications: To reduce the unwanted cost generated due to employee turnover, it is necessary that employers understand the role of HPHRP and implement it in a manner that signals a positive feeling within the employee, and thus, they wish to keep working with their current organisation. Originality/Value: The article provides empirical evidence of the relationship between HPRHP and IR. Earlier studies were conducted in other geographical regions and organisational settings. Thus, this study is the first to empirically test the direct relationship of HPRHP and IR on construction industry employees in India. JEL Classification: M31, L81, C78, M50, J63, L74