The Retention Paradox

Why Psychologically Safe Workplaces Keep Gen Z from Leaving

Abstract

As Gen Z enters into the workforce, and with rapid onboarding, quick employee turnover has become an issue of concern for organizations and the ways that it can be avoided. This study drew upon the premise of exit–voice theory, Psychological Safety Theory and Social Exchange Theory to explore the possibility that voice behaviour leads to a decrease in turnover intention among Gen Z employees and that psychological safety is a safe tissue and acts as a moderator between voice behaviour and turnover intention. A cross-sectional survey was completed with 220 working individuals aged 18–24 years who were employed in various industries including IT, banking, manufacturing, education, and other service industries, and the scales used were validated. Voice behaviour was found to significantly and negatively predict turnover intention (β = −.32, p < .001) using regression analysis. The negative relationship was stronger when adding psychological safety as a moderator (as indicated by hierarchical moderated regression; β = −.19, p < .001, R² = .04), and was also found to be predicted by psychological safety, independently (as indicated by hierarchical moderated regression; r = −.45, p < .01). The results indicate that the impact of voice behaviour is likely to be a retention-enhancing mechanism, but this appears to be in relation to psychologically safe climates. The study takes the psychological contract and social exchange theory into a generational context and provides the organizations with a helpful tool for implementing feedback and inclusion policies to help keep Gen Z from leaving.