Examination of HRM practices in relation to the retention of Chinese Gen Z employees

The study addresses how organizations can retain Generation Z (Gen Z) employees, a cohort whose shared social, cultural, economic, and technological experiences shape distinct workplace expectations. Existing HRM research stresses the importance of retention strategies but shows limited development specific to Gen Z, particularly in China. Prior research on retention factors (e.g., job satisfaction, autonomy, leadership style, work-life balance) is extensive yet offers contradictory or incomplete explanations for Gen Z. This study asks: (1) What HRM practices affect the retention of Gen Z employees? (2) Does employee gender moderate the relationship between HRM practices and Gen Z retention? Contributions include: integrating Gen Z literature with HRM retention practices in China; employing a mixed exploratory–empirical methodology to identify and test key practices; and using social exchange theory (SET) to theorize direct effects of HRM practices and the moderating role of gender for a comprehensive framework. The paper proceeds with theory and hypotheses, methodology, results, discussion, implications, and limitations/future research.

The literature situates Chinese Gen Z (approx. 260 million; expected to dominate the workforce) as shaped by material abundance, digital immersion, nuclear families, and heavy schoolwork. They value work-life balance, fairness, innovation, personal judgment, high salaries, career advancement, good teams, and meaningful work. Prior studies link retention to job satisfaction, organizational trust and culture, leadership, engagement, commitment, work environment, rewards, benefits, empowerment, work-life balance, promotion, and compensation. Social Exchange Theory (SET) provides the theoretical lens: reciprocal exchanges between organizations and employees (e.g., supportive practices for positive outcomes like commitment and retention). The study posits that supportive work environment, pay, training and development, and role clarity elicit reciprocation and retention in Gen Z. Hypotheses: H1: Work environment positively influences Gen Z retention. H2: Pay positively impacts Gen Z retention. H3: Role clarity positively impacts Gen Z retention. H4: Training and development positively impact Gen Z retention. Given mixed evidence on gender as a moderator, the study predicts differences: H5a: Work environment → retention stronger for females. H5b: Pay → retention stronger for males. H5c: Role clarity → retention stronger for males. H5d: Training and development → retention stronger for females.

Design: Mixed-method approach including an exploratory study (short survey and focus group) followed by a cross-sectional survey analyzed with PLS-SEM and multi-group analysis (MGA) by gender. Exploratory study: A short survey identified 23 potential retention antecedents from literature. 213 Gen Z employees (referred by 14 branch managers across banking, insurance, manufacturing, import/export, logistics in Hangzhou and Jinhua) rated factors on a 5-point scale. Top factors (by mean): supportive work environment (M=4.38), training and development (M=4.29), pay (M=4.22), role clarity (M=4.11). A focus group (n=9; 4 males, 5 females; 90 minutes, Hangzhou) explored why these four are prioritized, confirming their importance and revealing potential gendered emphases (males: pay; females: supportive environment). Survey: Administered Aug–Dec 2022 in Zhejiang province (Hangzhou, Ningbo, Jinhua, Wenzhou) using convenience sampling at HQs and large branches; paper questionnaires preferred. 834 distributed; 529 valid responses (63.4%). Screening ensured birth years 1995–2010. Confidentiality assured. Measures (5-point Likert): Supportive Work Environment (5 items adapted from Frye et al., 2020; two items dropped as irrelevant); Pay (4 items from Frye et al., 2020; one pay-increase opportunity item omitted for relevance); Role Clarity (3 items from Hassan, 2013); Training & Development (4 items from Delery & Doty, 1996); Employee Retention (3 items from Armstrong-Stassen & Schlosser, 2008). Gender coded Male/Female. Reliability and validity were assessed via PLS measurement model. Sample profile (N=529): Female 52.6%, Male 47.4%; tenure: <1 year 8.0%, 1–2 years 60.0%, >2 years 32.0%; education: vocational 12.7%, bachelor 84.5%, master 2.8%; occupations include accounting/finance (22.9%), IT (18.3%), engineering (16.6%), sales (17.2%), logistics (9.9%), admin support (11.7%), others (3.4%). Analysis: SmartPLS 2 used. Reliability: Cronbach’s alpha and composite reliability >0.70 for all constructs. Convergent validity: loadings >0.70 with significant t-values (p<0.05). Discriminant validity: square root of AVE exceeded inter-construct correlations; multicollinearity absent (correlations <0.8). Structural model tested with bootstrapping; one-tailed tests at p<0.05. Multi-group analysis (PLS-MGA) compared path coefficients across gender groups using non-parametric significance and pooled t-tests.

- Measurement model adequacy: All constructs demonstrated reliability (e.g., full sample CRs: ER 0.95; SWE 0.93; P 0.89; RC 0.89; TD 0.89) and validity (loadings >0.80; AVE square roots exceeded inter-construct correlations). - Structural model (full sample, N=529): All four HRM practices significantly and positively predicted Gen Z employee retention (p<0.001). Reported standardized path coefficients: Work environment β=0.419; Pay β=0.327; Role clarity β=0.214; Training & Development β=0.395. The model explained 41.2% of variance in employee retention. - Gender moderation (PLS-MGA): • H5a supported: Work environment → retention stronger for females (Female coeff=0.274 vs Male 0.146; tspooled=13.297; p<0.001). • H5b supported: Pay → retention stronger for males (Female 0.192 vs Male 0.372; tspooled=-15.793; p<0.001). • H5c supported: Role clarity → retention stronger for males (Female 0.226 vs Male 0.394; tspooled=-14.813; p<0.001). • H5d: Text concludes no significant gender difference for training & development (Female 0.297 vs Male 0.171; narrative states H5d rejected), though Table 7 labels it supported with tspooled=11.863. Authors conclude both genders value training & development. - Descriptive insights: Majority of respondents had short tenure (1–2 years), reflecting the recent entry of Chinese Gen Z into the workforce and potential early-career mobility.

Findings address the research questions by identifying four HRM practices—supportive work environment, competitive pay, role clarity, and training & development—that significantly improve Gen Z retention in China. Grounded in Social Exchange Theory, the results suggest that when organizations invest tangible (pay, training) and intangible (supportive environment, clear roles) resources, Gen Z employees reciprocate with stronger intentions to stay. The gender-based differences refine this understanding: females weigh supportive environment and training more heavily, while males prioritize pay and role clarity. These patterns align with parts of prior literature on generational and gendered work values and clarify mixed findings by situating them in the Chinese Gen Z context. Practically, tailoring HRM interventions by gender and aligning practices with Gen Z expectations can enhance retention. Theoretically, the study extends SET to a Gen Z, China-specific context and incorporates gender moderation into the HRM–retention linkage.

This study integrates exploratory and empirical evidence to show that four HRM practices—supportive work environment, pay, training & development, and role clarity—significantly enhance the retention of Chinese Gen Z employees. SET offers a coherent explanatory framework for these effects, emphasizing reciprocal exchanges between organizations and young employees. Gender moderates several relationships: females place greater importance on supportive environment (and, per discussion, training), while males prioritize pay and role clarity. These insights guide HR managers to craft targeted, gender-informed retention strategies that align with Gen Z needs. Future research should validate the model longitudinally and cross-culturally, incorporate additional mediators/moderators (e.g., intrinsic motivation, transformational leadership, organizational commitment), and probe the nuanced role of role clarity in Gen Z retention.

- Cross-sectional survey limits causal inference; longitudinal or case study designs are recommended. - Conducted in China; cultural and economic context may limit generalizability. Replication in other countries and industries is needed. - HRM practices were selected based on young employees’ perceptions; caution in applying to other contexts. - Use of Partial Least Squares Multigroup Analysis, while suitable for large samples, may yield less precise estimates than alternative methods. - Potential inconsistencies in gender moderation (e.g., training & development) suggest the need for further validation. - Future work could include additional mediators/moderators (intrinsic motivation, transformational leadership, commitment) and focus more deeply on role clarity’s impact on Gen Z retention.