The Role of Owner-Employee Relationship Quality and Perceived Owner Support on Employee Retention through Affective Commitment with Moderation of Environmental Turbulence

This study examines how owner–employee relationship quality and perceived owner support affect employee retention, with affective commitment as a mediating variable and environmental turbulence as a moderating variable. Micro, Small, and Medium Enterprises (MSMEs) in Indonesia encounter significant employee retention issues due to high workforce turnover, which disrupts productivity and business continuity. The study employed a quantitative approach with a survey design. The sample consisted of 245 MSME employees from 12 regencies/cities in Java, namely Semarang City, Semarang Regency, Salatiga City, Surakarta City, Kudus Regency, Yogyakarta City, Sleman Regency, Bantul Regency, Surabaya City, Malang City, Sidoarjo Regency, and Gresik Regency, selected using purposive sampling based on predetermined criteria. Data were analyzed using Partial Least Squares-based Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0 software. Among the structural relationships, affective commitment showed a strong direct effect on employee retention (β = 0.495; p < 0.01). The model explained 52.8% of the variance in affective commitment (R² = 0.528) and 61.1% of the variance in employee retention (R² = 0.611), indicating strong explanatory power. These findings confirm that interpersonal relationships between owners and employees are strategic factors in retaining human resources in MSMEs. Practically, MSME owners are encouraged to improve employee retention by fostering trust, recognizing employee contributions, providing consistent support, and strengthening employees’ emotional attachment to the business, especially in uncertain environments.