Abstract:
Employee retention remains an extensive challenge in the Sri Lankan banking sector, with high turnover
rates affecting organizational performance and workforce stability. While extensive research has examined
employee engagement globally, there is a lack of empirical studies focusing on its direct impact on retention within
Sri Lanka’s private banking sector. This study aims to bridge this gap by identifying key engagement determinants
and their correlation with employee retention. Further, this explores the critical role of employee engagement in
enhancing employee retention within the competitive banking sector, focusing on Union Bank PLC in Colombo
District, Sri Lanka. A structured survey of 169 employees from different hierarchical levels examined the impact
of key engagement determinants. The findings reveal that compensation and benefits, leadership, workplace well being, and flexible work arrangements significantly influence workforce stability. Among these, compensation
and benefits showed the strongest positive correlation with retention, followed by leadership and workplace well being. The study emphasizes the need for HRM strategies that foster a positive work environment and enhance
employee satisfaction. Organizations should implement employee-centric policies to strengthen commitment and
reduce turnover. Understanding the link between engagement and retention is crucial for maintaining a stable and
motivated workforce. This research offers valuable insights for HR professionals seeking to improve employee
commitment and organizational success
