Compensation, Work-Life Balance, and Job Satisfaction Influencing Retention of Generation Z

Published: Jan 23, 2026

Abstract:

Purpose: The research in this study aims to examine the effects of compensation and work-life balance on employee retention among Generation Z, with job satisfaction as a mediating variable.

Methodology: The research employed a quantitative design by distributing structured questionnaires to Generation Z employees working in Indonesia’s private trade sector. A total of 200 valid responses were collected through random sampling. Data were analysed using Structural Equation Modeling (SEM) with the support of SmartPLS version 4 to assess both the measurement and structural models.

Results: The findings reveal that Generation Z employees in Indonesia consider compensation and a dynamic work-life balance to be crucial factors in shaping job satisfaction and retention. This suggests that organizations should balance financial rewards with supportive work-life policies to retain young talent effectively.

Conclusion: The conclusion this study delivers shows that compensation supports job satisfaction but does not necessarily ensure employee retention, whereas work-life balance has a stronger influence on Generation Z’s commitment. Integrating both provides guidance for HRM and supports the Indonesia Emas 2045 vision.

Contribution: This study contributes to the literature on human resource management and generational workforce behavior, while providing practical strategies for retaining Generation Z employees in support of Indonesia Emas 2045.

Limitation: This study is limited by its sample size of 200 respondents from the private trade sector, which may not fully represent the broader population of Generation Z employees in Indonesia.

Keywords:
1. Compensation
2. Employee Retention
3. Generation Z
4. Job Satisfaction
5. Work-Life Balance
Authors:
1 . Fatimah Azzhara Al-Idrus
2 . Heriyadi Heriyadi
3 . Endah Mayasari
4 . Maria Christiana Iman Kalis
How to Cite
Al-Idrus, F. A., Heriyadi, H., Mayasari, E., & Kalis, M. C. I. (2026). Compensation, Work-Life Balance, and Job Satisfaction Influencing Retention of Generation Z. Studi Ilmu Manajemen Dan Organisasi, 6(4), 257–274. https://doi.org/10.35912/simo.v6i4.4821

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