The Impact of Compensation and Motivation on Turnover Intention of Employees Providing Labor Services in Mining Business License Areas, Mimika Regency, Papua Province

Regulatory changes by the Indonesian Government that affect labor service providers in the Mimika Region, particularly the transition from fixed-term contracts (PKWT) to permanent contracts (PKWTT), have led to increased wage disparities and employee turnover. This study aims to analyze the impact of compensation and motivation on turnover intention, as well as to understand the factors that influence employee work motivation when facing operational and structural challenges. The methodology used is Structural Equation Modeling (SEM) with Partial Least Squares (PLS) technique using SmartPLS software version 3.2.8. Survey results indicate that the average intention of employees to leave the company is 79.4%. Conversely, employee compensation and motivation are low, with 45.1% and 44.8%, respectively. Hypothesis results show that compensation and motivation significantly reduce turnover, with compensation influencing at -0.542 and motivation at -0.228. The research results indicate that compensation falls into the poor category, employee motivation is low, and employee turnover falls into the high category. Furthermore, compensation and motivation have a significant effect on turnover intention in a negative direction, meaning that the better the compensation provided, the lower the turnover intention. Similarly, the higher the employee motivation, the lower the turnover intention.