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The Impact of Strategic Human Resource Practices on Employee Retention in Bangladeshi Commercial Banks: The Mediating Role of Job Satisfaction

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Issue Abstract

Abstract

Despite extensive research on human resource management in South Asian banking, the mechanism through which strategic HR practices produce employee retention remains empirically unexamined in Bangladeshi commercial banks. Drawing on Social Exchange Theory and Conservation of Resources Theory, this study tests job satisfaction as the mediating mechanism between strategic HR practices and employee retention. A quantitative cross-sectional design was employed with 385 banking professionals across 18 Bangladeshi scheduled commercial banks, selected via stratified random sampling. Partial Least Squares Structural Equation Modelling was applied using SmartPLS 4.0. The measurement model demonstrated adequate reliability (Cronbach alpha > 0.80; composite reliability > 0.85; AVE > 0.50) and discriminant validity (HTMT < 0.85). Strategic HR practices significantly predicted job satisfaction (beta = 0.56, p < .001) and employee retention directly (beta = 0.29, p < .001). Job satisfaction significantly mediated the relationship between strategic HR practices and employee retention (indirect effect: beta = 0.24, 95% CI [0.18, 0.31]), accounting for 45.3% of the total effect. These findings advance Social Exchange Theory by specifying job satisfaction as the cognitive-affective exchange mechanism through which strategic HR investment generates reciprocal retention behaviour in South Asian banking contexts.

Keywords: Strategic HR Practices; Employee Retention; Job Satisfaction; Social Exchange Theory; Conservation of Resources Theory; PLS-SEM; Bangladesh; Banking Sector.

Author Information
Lima Rozario PhD Candidate ,Syed Ahmed Salman Head of Department School of Business and Management Lincoln University College
Issue No
6
Volume No
5
Issue Publish Date
05 Jun 2026
Issue Pages
1-17

Issue References

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