Employees Retention Trends & Challenges in Oil and Gas Industry

Abstract

This study explains the factors influencing job satisfaction and employee turnover in the oil and gas industry of Pakistan, drawing upon Social Exchange Theory (SET) as a theoretical framework. Employee retention in any industry is a measure of the attachment of employees toward their organization. It is important to determine whether an employee will be passionate about working for a company over long term and will use their full potential to help company meet its objectives. Employee Turnover rate has been a significant issue for organizations because they directly affects other employees as well and ultimately effects company’s profitability and competitiveness. Organizations and employees share a special bond where they find ways to benefit each other for a long turn. However, if this bond is broken then it increases the chances of a high turnover rate and lack of enthusiasm toward the organization.

Oil & Gas Sector is one of the largest sector in Pakistan in terms of market valuations and number of employees. A total of 250 respondents working in different Oil & Gas Companies of Pakistan including both National and Multinational were considered. IBM SPSS was used to perform initial data analysis and to calculate reliability and validity of data. IBM SPSS AMOS was used to perform Confirmatory Factor Analysis and Structural Equation Modeling. Non-Probability Purposive sampling was used for the collection of data. The theoretical framework includes Promotional Opportunity, Leadership Style, Employee Perception of Development, and Compensation & Benefits as Independent variable and Employee Turnover as dependent variable taking Job satisfaction as mediator. Supervision plays mediator between job satisfaction and employee turnover.

The results shows Leadership Style and Compensation & Benefit have a good impact on Job Satisfaction which eventually reduce Employee Turnover in organizations while promotional opportunity and employee perception of development have no impact on job satisfaction. The mediating role of Job satisfaction and supervision were found to be weak and significant.