Retention of Generation Y Employees through High Performance Work Systems, Change Management and Employee Engagement

Purpose: The aim of the present paper is to examine high skilled Generation Y employee retention in knowledge-intensive services by focusing on various effects of high-performance work systems (HPWS), change management practices and employee engagement. Design/Methodology/Approach: A research model is proposed which investigates the causal effects between the above factors. Data were collected from 499 employees in six European countries who are between 21 and 40 years old with at least a higher education degree. Findings: Empirical findings revealed that high-performance work systems and change management practices have a direct positive impact on the engagement of highly skilled employees that belong to Generation Y, which in turn influences their intention to stay in the same company. Moreover, the impact of HRM on turnover intention is both direct and indirect (mediated through employee engagement). The negative impact of high-performance work systems on turnover intention was also highlighted by the empirical results. Finally, the significant mediating role of employee engagement is underlined, since it mediates the impact of high-performance work systems and change management practices on turnover intention. Practical Implications: HR professionals in knowledge-intensive services should take into consideration that they can effectively retain their high skilled ‘Generation Y’ employees by enhancing their abilities, increasing their motivation, and providing them with opportunities to participate in the decision-making process while at the same time support them with managing change. Originality/value: : A central issue in this line of research refers to the limited empirical examination regarding talented employees in knowledge-intensive services, mainly in European countries.