HR Practices and Employee Retention: A Study on Automotive Manufacturing Organizations in Malaysia

Employee retention remains a critical challenge within the automotive manufacturing sector, where the loss of skilled talent can significantly disrupt operations and competitiveness. This study investigates the impact of four key human resource (HR) practices - rewards and benefits, career development, performance management, and leadership behavior - on employee retention within a major automotive manufacturing organization in Peninsular Malaysia. Grounded in Herzberg’s Two-Factor Theory, a quantitative research design was employed, and data were collected via a survey questionnaire from 650 executive-level employees across the Selangor and Melaka branches, achieving a 95 percent response rate. Statistical analysis was conducted using SPSS version 26, incorporating descriptive, reliability, and multiple regression analyses to examine the relationship between HR practices and employee retention outcomes. The findings indicate that all four HR practices significantly influence employee retention, with career development showing the strongest relationship. The findings emphasize the need for strategic alignment between HR policies and employee expectations to reduce turnover and foster long-term organizational commitment. This study offers both theoretical and practical implications by reinforcing the role of comprehensive HR practices in shaping employee behavior and organizational stability. It provides actionable insights for HR professionals and decision-makers within Malaysia’s manufacturing sector to enhance workforce retention and maintain competitiveness in a dynamic labor market.