Employee retention is a crucial concern for businesses of all sizes. High turnover rates can result in higher recruitment expenses, workflow disruptions, and a drop in overall productivity. As a result, businesses are continually looking for new ways to improve their staff retention tactics. Emotional intelligence is a vital and sometimes neglected aspect in this equation. It refers to the ability to recognise, analyse, control, and effectively use one's own emotions. The present article mainly focuses on the impact of emotional intelligence on employee’s retention.
1.1 Background of the Study
In today's dynamic and highly competitive global business environment, there is an imperative to retain highly skilled and specialized talent. The challenge lies not only in the selection, recruitment, and hiring processes to acquire the right talent, but also in ensuring their long-term retention. The intention of employees to remain with an organization is of utmost importance and serves as a strategic differentiator for achieving organizational success. This is primarily due to the high costs associated with recruitment, the loss of valuable knowledge and expertise, and the often-underestimated decline in productivity that occurs when talent is lost. Despite improved and innovative human resource management (HRM) policies, the retention of human capital remains a persistent challenge for most major global businesses (Sofia, 2020).
In the present fast-paced and demanding business landscape, characterized by rapid changes in information, technology, and the economy, the retention of human capital holds immense significance for achieving organizational success. Human Resource Management (HRM) leaders are challenged with the critical responsibility of devising and implementing strategies to enhance employee retention (RET) and minimize turnover, thereby enabling the organization to maintain a competitive edge through its human resources (Thakur et al., 2029). When an employee departs from the company for any reason, it swiftly transitions from being an asset to a liability, entailing costs in terms of recruitment, selection, onboarding, training expenses, and the loss of valuable knowledge. (Sofia, J. S., 2020).
It was demonstrated and validated that Emotional Intelligence serves as a powerful predictor of employees' service performance in the workplace. It is commonly observed that employees who exhibit strong performance tend to have longer tenure within their organizations. (Sultan, 2013 & Thakur et al., 2020). Moreover, this works as a driver for skilled manpower to choose their destination countries for migrating to work (Bhardwaj & Sharma, 2022).
According to Goleman (1998), possessing exceptional intelligence provides a competitive advantage. While having impressive intellectual abilities may excel in fields such as financial analysis or legal scholarship, having a well-developed emotional intelligence is what sets one up for becoming a CEO or an exceptional lawyer (Olawoyin, 2018).
Figure 1.
Components of a competent professional
The ability to manage emotions relies on an individual's emotional intelligence, as stated by Goleman (1995). Those with high emotional intelligence tend to achieve greater success and foster stronger connections compared to individuals with low emotional intelligence. Diverse individuals possess varying skill sets and abilities, and they employ different strategies to regulate their emotions. Individuals with high emotional intelligence are better equipped to handle organizational challenges compared to those with low emotional intelligence. Emotional intelligence refers to a person's ability to effectively manage and regulate their own emotions while also understanding the emotions of others. It also aids in making personal and organizational decisions. According to pervious research, high emotional intelligence is associated with stronger social networks and higher quality relationships, leading to increased job satisfaction and longer tenure within an organization (Sultan, 2013).
Considering turnover intention is critical for effective company management due to its impact on operations, productivity and corporate profits, and incurs substantial costs for training, personnel processes, and recruitment. Early identification of turnover is crucial for proactive measures by organizational management. High turnover intention leads to increased costs in pre-departure, recruitment and selection, orientation and training, and lost productivity (Imron, 2021 & Cloutier et al., 2015). Comprehending the elements that contribute to employees' intentions to leave their positions is crucial for effective workforce planning (Wang et al., 2023).