The relationship between psychological capital, life satisfaction and employee retention

In order to achieve sustainable employer environments, South African organisations are faced with the challenge of retaining key and critical employee cohorts. Externally focused methods and models of turnover and retention fail to comprehensively explain the lack of highly skilled employees and the inability of organisations to successfully retain these employee groupings. This non experimental correlational study investigated the relationship and interaction between the positive psychological constructs of psychological capital and life satisfaction and employee turnover intention of a South African sample of specialist and management level employees (n=150). The survey method was utilised to gather data for the study with a biographical questionnaire, the Psychological Capital Questionnaire-12 (PCQ-12), the Satisfaction with Life Scale (SWLS) and the Turnover Intention Scale-6 (TIS-6). Data analysis was conducted in the form of descriptive and inferential statistics including frequency tables, Cronbach’s Alpha testing, exploratory factory analysis, correlation analysis, t-tests, analysis of variance and structural equation modelling. The results indicated that significant relationships exist between psychological capital, life satisfaction and employee turnover intention. A substantial negative relationship was found between psychological capital and employee turnover intention, as well as a small, yet definite negative relationship between life satisfaction and turnover intention. Even though the results indicated a substantial positive relationship between psychological capital and life satisfaction, the relationship with employee turnover intention was insignificant when the two variables were correlated. This study adds to the current body of knowledge regarding employee retention in South Africa, and allows for a number of future research avenues to be explored