Community diversity climate and employee retention: roles of organizational diversity climate and psychological safety

Purpose The purpose of this study is to investigate how community diversity climate indirectly affects employee intent to stay via two pathways. First, we assess organizational psychological safety as a mediator. Second, we evaluate organizational diversity climate as a moderator of the community diversity climate – organizational psychological safety relationship. Design/methodology/approach To test the hypotheses, we collected data via an electronic survey (n = 151) from a US-based manufacturing company. Employees representing diverse functional areas, including marketing, production, operations, finance and human resources, participated in the study. Demographics included 66% White, 64% male and 46% between the age group 40–55 years. Findings Results reveal that organizational psychological safety significantly mediates the positive effect of community diversity climate on employees’ intent to stay. The results also indicate a significant interaction between community and organizational diversity climates on psychological safety. The plot for significant interaction between community and organizational diversity climates illustrates that community diversity climate strongly enhances psychological safety when organizational diversity climate is perceived as less supportive. Originality/value This study draws on and extends conservation of resources and spillover theories by examining the influence of community-based variables on employment relationships. The study also contributes to research on work–community interface by clarifying the role played by community diversity climate in indirectly influencing intent to stay. Few studies have examined community-based antecedents of work attitudes and behaviors; therefore, this study advances this understanding by highlighting how contextual resources from work and non-work domains interact and, in doing so, offers novel theoretical and practical insights into employee retention.