ORIGINAL RESEARCH published: 08 July 2022 doi: 10.3389/fsoc.2022.928951 Frontiers in Sociology | www.frontiersin.org 1 July 2022 | Volume 7 | Article 928951 Edited by: Andrzej Klimczuk, Warsaw School of Economics, Poland Reviewed by: Fadilah Puteh, Universiti Teknologi MARA, Malaysia Balvinder Kaur Kler, Universiti Malaysia Sabah, Malaysia *Correspondence: Walton Wider walton.wider@newinti.edu.my Specialty section: This article was submitted to Work, Employment and Organizations, a section of the journal Frontiers in Sociology Received: 26 April 2022 Accepted: 20 June 2022 Published: 08 July 2022 Citation: Zainal NSB, Wider W, Lajuma S, Ahmad Khadri MWAB, Taib NM and Joseph A (2022) Employee Retention in the Service Industry in Malaysia. Front. Sociol. 7:928951. doi: 10.3389/fsoc.2022.928951 Employee Retention in the Service Industry in Malaysia Nur Syafiqah Binti Zainal 1 , Walton Wider 1 *, Surianti Lajuma 1 , Mohd Wafiy Akmal B. Ahmad Khadri 1 , Nasehah Mohd Taib 1 and Asong Joseph 2 1 Faculty of Business and Communication, INTI International University, Nilai, Malaysia, 2 School of Science & Psychology, International University of Malaya-Wales, Kuala Lumpur, Malaysia This study aims to investigate the effects of work-life balance, work environment, and reward and compensation on employee retention in Malaysia. A total of 400 questionnaires were collected online from employees within the service industry in Malaysia. Partial least square structure equation modeling was used to test the model and hypotheses. The results reveal that work-life balance and work environment had a strong positive effect on employee retention, but reward and compensation had a much stronger positive effect on employee retention. This research provides unique theoretical contributions by investigating these factors in the midst of the COVID-19 outbreak as components of the reciprocal process between employee and employer, and their effects on employee retention. This study also provides vital insights to business organizations to consider designing effective employee retention plans for a successful business. Keywords: employee retention, work-life balance, work environment, reward and compensation, service industry, Malaysia INTRODUCTION A recurring difficulty faced by organizations today is the problem of increased employee turnover and the retention of employees (Al-Suraihi et al., 2021). In developing countries like Malaysia, employee turnover intention has become a serious problem (Munir and Tobi, 2020). Over the last decade, employee retention has become a key challenge for organizations as the demand for skilled employees has risen in businesses (Chakravarti and Chakraborty, 2020). Employers in Malaysia are dealing with high rates of voluntary turnover, for example, the voluntary turnover rate in 2017 was 12.8%, compared to a median of 10% in all major Asia-Pacific markets (Hewitt, 2017). According to Willis Towers Watson. (2017), within 2 years about 36% of employees in Malaysia were likely to leave their organization. In addition, based on Malaysia media reports, retention is indicated by a high turnover ratio, with up to 150,000 employees losing their jobs during the epidemic as a result of the financial crisis and lockdown (Ibrahim et al., 2021). Research on employee retention highlights that the precise reasons why individuals quit organizations are complex and frequently linked to work-related stressors. Securing and keeping qualified employees play a crucial part in any organization because the knowledge and expertise of employees are essential for the economic competitiveness of the organization (Mathimaran and Kumar, 2017; Chakraborty and Biswas, 2020). Employees have become a priority since they positively contribute to the attainment of organizational goals and mission (Johennesse and Chou, 2017; Rattu and Tielung, 2018), long-term business health, and profitability (Aswale, 2017); therefore, companies must seek to understand why people stay or go (Bibi et al., 2018). Turnover intention is an employee’s willingness to leave his current organization. The intention arises when there is a lack of motivation, promotion and performance in the workplace, which