Volume 4, Issue 4, April – 2019 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

The Mediating Effect of Job Satisfaction to Predict

the Role of Talent Management Strategy in
Improving Employee Retention
Deri Satria, Lenny Ch Nawangsari
Magister Management Faculty
University of Mercu Buana

Abstract:- The purpose of this study is to see the effect Indonesia, which was a high number. The trigger of the
of Talent Management strategy in improving Employee employee to quit their job quickly was seen from the enable
Retention with Job Satisfaction as the mediator. And of a company to do retention, remuneration and clarify the
the variable used consists of; Talent Acquisition, Talent employee for their career (Swa.co.id, 2018).
Development, compensation strategies, and Succession
Planning as the independent variable, Job Satisfaction Tower Watson did research in 2014, Talent
as the mediator and Employee Retention as the Management and Reward Study, about a global survey for
dependent variable. This study uses 73 respondents 1.637 companies included 36 Indonesian companies,
sampling with 261 individuals of the total population, shown a significant result that 70% companies have
which these samples come from employee boot-camps difficulties in recruiting and maintaining their competent
program, one of the IT Consultant Company. The data employees (Warta Ekonomi, 2018).
are processed by using Partial Least Square (PLS)
software. Its testing is divided into two types they are; Talent Management may be a challenge for the
the outer model to evaluate the reflective measurement organization in all sectors of the economy all over the
model and inner model to evaluate the structural model. world. With various researches these days, show that the
From that measurement were obtained a result that challenge of Talent Management will become more critical
Talent Acquisition, Talent Development, and in developing countries markets.
compensation strategies have a direct influence on
Employee Retention significantly. Only Talent Talent Management is an important part of human
Acquisition have an indirect influence on Employee resource practice for a company; a good Talent
Retention through Job Satisfaction. The mediation Management strategy will affect the organization business.
effect from Job Satisfaction is partial because the direct (Nawangsari dan Sutawidjaya, 2018). The previous
influence of the Talent Acquisition to Employee researchers also emphasized a close relationship between
Retention is higher than indirect influence. But, Job Job Satisfaction and the company ability to maintain their
Satisfaction has a significant influence on Employee employees. Base on Clark's judgment (2010), he used
Retention. It could be concluded that a Talent British Household Panel Survey (BHPS).
Management strategy has a strong influence on
Employee Retention. The better strategy applied the Data to show that Job Satisfaction with total salary
less possibility for the employee to leave the company. and work safety can minimize employee turnover or
improving Employee Retention (Frederiksen, 2016).
Keywords:- Talent Management, Employee Retention, Job
Satisfaction, Partial Least Square. Talent Management practice also has a crucial role
which could lead either high or low of Job Satisfaction.
I. INTRODUCTION From survey results done by Jobstreet.com (2014) to
17.623 respondents, found 73% of the employee did not
In the 21st century of the free trade era, there was a satisfy with their jobs. This unsatisfied were caused by
high climate of competition in every unit that made some some things, so the employee did not have interests with
companies were demanded to work more effectively and their jobs and satisfaction to work tend to be low.
efficiently. The high level of the competition also demand
an organization to optimize their resources, this issue was II. LITERATURE REVIEW
caused by a strong influence from the human resources to
the organization's effectiveness and efficiency. A. Talent Management
Talent Management usually defined into two main
In practice, the company frequently faces a barrier in characteristics, they are exclusive and inclusive definition.
improving the effectiveness and efficiency of Exclusive Talent Management involves the systematic
organizational performance is the high number of employee identification of key positions that are differential
turnover. From a survey for salary in 2015 by Mercer contributes to the sustainable competitive advantage of an
Talent Consulting & Information Solution, there was 8.4 organization, skill development of potentially great talent
percent employee turnover of the entire industry in and employees who have superior performance to fill the

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ISSN No:-2456-2165
position in the organizational structure, and ensuring III. RESEARCH METHODS
sustainable commitment of the employees against the
organization as well. While inclusive Talent Management A. Population and Sample
refers to the arts on the employee's respective area in their The population in this study consists of 261 people of
natural aptitude possession, find out and help employees to all employees that come from boot-camps fresh graduate.
develop either their skills or special knowledge that aims to To calculate the sample of employees used the Slovin
turn aptitude into a real performance, and then improve the formula with a 10% level of leeway (Prasetyo, 2006). From
performance of the employee into an optimal results (Ariss, these calculations obtained a total sample of 73 people, the
2014). Lawler (2008) added that effective Talent determination of the sample respondents is done with the
Management is not only about attracting, developing and technique of non-probability sampling based on quota
retaining talented employees but also about setting up and sampling.
manage the people so that they can work and do something
that leads to better organizational performance. B. Method of Data Analysis
The data analysis uses SEM with the Partial Least
B. Talent Acquisition Square Method (PLS). PLS is statistical techniques
Talent Acquisition is an activity that is done to attract, multivariate that perform comparisons between the
recruit and obtain the human resources from outside dependent variable multiple regression with the
(external recruitment). To recruit and retain employees, to independent variables in the regression. This test consists
motivate employee behavior in a direction that benefits the of two criteria, they are:
Organization and build a competitive advantage and it is  The evaluation of the measurement model (Outer
difficult to be imitated by other organizations. The Model)
compensation system is described as a signal for job
seekers; affects the attractiveness of the organization by  Convergent validity
providing information on the characteristics of the Evaluated by looking at the value of outer loading >
corporate culture (Kigo dan Gachunga, 2016). 0,5. In addition, seen by the value of composite reliability
and alpha Cronbach > 0,6 and the last AVE value > 0,5
C. Succession Planning
According to Rothwell (in Kigo and Gachunga,  Discriminant validity
2016), Succession Planning is the process of determining
the needs for intellectual talent and leadership throughout  The evaluation of the structural model (Inner Model)
the organization from time to time and prepare individuals Evaluated by looking at the value of R square, Q
to face the responsibility of work in the future in square, the Good of Fix Index (GoF), F2 and hypothesis
accordance with the needs of the organization. Succession test.
Planning is a process related with the future, therefore their
implementation should be based on the strategic plan made IV. RESULT AND DISCUSSION
by the company to identify the talents criteria to fill the
positions, so the company will continue to grow and A. Respondent Characteristics
develop (Chlebikova, Misankova dan Kramarova, 2015). From the respondents' characteristics data, it is known
that male respondents are more dominant with a percentage
D. Job Satisfaction of 92% and women 8%. If it is seen from the working
Job Satisfaction is a positive feeling about someone's period, in this research divided into 3 phases, they are
performance based on his/her characteristics evaluation <6months as much as 36%, 1-2 years as much as 57% and
(Robbins and Judge, 2009). According to Luthans (2011), >2 years as much as 7%. Besides the working period,
Job Satisfaction is a result of the perception of employees
about how a good job can give them essential things. Job From the data above, it can be seen that all indicator
Satisfaction is a set of things that concerns about the variables have a value of Talent Acquisition activity does
pleasant or unpleasant feeling that relates to his/her work. not cease at the stage of recruitment but also related to the
strategy in improving the retention of employees into an
Someone will have the satisfaction in the work will organization. The policies taken in the process of
certainly have an impact on the psychological maturity that acquisition aims to retain talented employees (Armstrong,
will eventually give rise to the passion and zeal to achieve a 2010).
higher performance than the unfulfilled (As’ad, 2000).
According to Thorn and Pellant (in Kigo and
E. Employee Retention Gachunga, 2016) Talent Acquisition is the process of
The term of retention has the meaning which means finding and engaging the people who needed by an
that employees will decide to work and remain in the Organization. The selection is part of the recruitment
organization. process related to decision-making regarding applicants
who wish to be appointed to carry out the work. Sourcing
and recruiting concept is expanded by the existence of the
Talent Acquisition term. The Organization should assess
the needs of aptitude, determine performance profiles, find

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ISSN No:-2456-2165
and analyze candidates, and then recruit employees into the  H10b: Talent Development has a significant effect on
onboarding stage. Employees who are recruited through a Employee Retention through Job Satisfaction
good boarding process must be able to understand and  H10c: Talent Compensation Strategies has a significant
adapt to the environment of the Organization. effect on Employee Retention through Job Satisfaction
 H10d: Succession Planning has a significant effect on
B. Talent Development Employee Retention through Job Satisfaction.
The activity of Talent Development is ensuring that
employees acquire and improve their skills and The characteristics of the respondents also viewed
competencies base on the required (Armstrong, 2010). An based on the age difference, where age <25years as much
organization must be able to manage and develop the as 66%, 25-30 years as much as 27% and >30 years as
aptitudes in order to fulfill the needs of the organization. much as 7%.
Most organizations utilize the Talent Management
practices to recruit, retain and develop talented employees D. Scheme of Model Partial Least Square (PLS)
in order to be able to give more value to the Organization
itself. Talent Management focuses on planning, selection  Validity and Reliability Test (Outer Model)
and implementing development programs for all the talents The validity test in this study was divided into two
that exist in the Organization, and ensuring that the testing, i.e., the validity test of the convergent (convergent
organization has talent supplies that can fill positions for validity) with the value of the loading factor >of 0.5. Then
long periods of time (Kigo dan Gachunga, 2016). the value of the average variance extracted (AVE) >0.5 and
Cronbach’s alpha/ composite reliability > 0.6. In this study,
C. Talent Compensation Strategies the value of the loading factor below 0.5 will be dropped or
According to James, Beekun, Daly, and Vanka not be included in a stage of processing subsequent data.
(2009), compensation is a tool that is powerful enough for The following values outer loading on each indicator
the Organization variable.

Employee Retention can be created by making the  Loading Factor

work environment be comfortable so that employees have
an involvement in the Organization for a long period Outer
(Kibui, Gachunga, and Namusonge, 2014). Variable Indicator loading Remark
Employee
Employee Retention refers to policies and practices Retention X1.1 0.903 Valid
carried out by the company to prevent valuable employees X1.2 0.815 Valid
in order not to leave the Organization. This involves X1.3 0.887 Valid
measurements to encourage employees in order to remain X1.4 0.800 Valid
in the Organization for a maximum period. Hiring Talent
competent people is important, but the defense of Acquisition X2.1 0.828 Valid
employees is much more important for the betterment of X2.2 0.853 Valid
the organization. (Hong, et.all, 2012). X2.3 0.835 Valid
X2.4 0.778 Valid
Based on previous research and theoretical studies are
X2.5 0.835 Valid
then assigned the hypothesis in this study as follows:
X2.6 0.838 Valid
 H1: Talent Acquisition has a significant effect on Talent
Employee Retention. Development X3.1 0.895 Valid
 H2: Talent Acquisition has a significant effect on Job X3.2 0.851 Valid
Satisfaction X3.3 0.808 Valid
 H3: Talent Development has a significant effect on X3.4 0.836 Valid
Employee Retention Compensation
 H4: Talent Development has a significant effect on Job Strategies X4.1 0.801 Valid
Satisfaction X4.2 0.742 Valid
 H5: Talent compensation has a significant effect on X4.3 0.778 Valid
Employee Retention X4.4 0.805 Valid
 H6: Talent compensation has a significant effect on Job X4.5 0.763 Valid
Satisfaction Succession
 H7: Succession Planning has a significant effect on Planning X5.1 0.897 Valid
Employee Retention X5.2 0.922 Valid
 H8: Succession Planning has a significant effect on Job X5.3 0.863 Valid
Satisfaction Job satisfaction X6.1 0.758 Valid
 H9: Job Satisfaction has a significant effect on X6.2 0.817 Valid
Employee Retention X6.3 0.842 Valid
 H10a: Talent Acquisition has a significant effect on Table 1:- Loading Factor
Employee Retention through Job Satisfaction

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 Avarage Variance Extracted (AVE)

Label Variable Avarage Variance Extracted (AVE)

X1 Talent Acquisition 0.688
X2 Talent Development 0.634
X3 Compensation Strategies 0.570
X4 Succession Planning 0.734
Y1 Job Satisfaction 0.522
Y2 Employee Retention 0.566

Table 2:- Avarage Variance Extracted (AVE)

From the table above it is known that the value of the ave in each variable is >0.5. So that all variables meet the criteria and
can be analyzed further.

 Alpha Cronbach and Composite Reliability

Both aspects can be used to see the internal consistency of each variable, with a condition value > 0.6.

Label Variabel Cronbach's Coefficent Alpha Composite Reliability

X1 Talent Acquisition 0.909 0.912
X2 Talent Development 0.879 0.911
X3 Compensation Strategies 0.852 0.888
X4 Succession Planning 0.877 0.916
Y1 Job Satisfaction 0.812 0.866
Y2 Employee Retention 0.855 0.889
Table 3:- Cronbach’s Coefficient Alpha and Composite Reliability value

Each variable has a value > 0.6 so that the variables  R-Square Value
that were studied have a good internal consistency value.

E. Discriminant Validity Test R Square R Square Adjusted

Discriminant validity serves to validate how far the Y2 0.836 0.824
latent of exogenous variables can predict the endogenous
Y1 0.706 0.689
variables, where the condition is, the correlation between
Table 4:- R-Square Value
the indicators variables measured, should be higher than the
correlation with other variables. In this study, the results of
The acquisition of the value explains that the
discriminant validity testing obtained that all indicator
percentage of the independent variable contribution
variables have a good value where the correlation between
simultaneously affects Y2 (Employee Retention) amounted
the measured indicators variables was already higher than
to 82,4%. While the rest 17.6% influenced by other
the correlation with indicators of other variables. variables
variables outside this research. Then, the value of R2 in the
simultaneously influences the dependent variable is equal
Job Satisfaction variable (y1) by 0,689 which means the
to 68,9%. While the rest 31.1% influenced by other
percentage of the contribution of the independent
variables outside this research.
 Good of Fit Index (GoF) Value
 Q-Square Value
According to Tenanhaus (2004), the following
The value of Q2 (predictive relevance) is 0,946. In
classification of GoF value: 0,1 (Small), 0,25 (Medium)
this study, the latent of endogenous variables has a value q2
and 0,38 (high). From the results of the above calculation,
is greater than 0 (zero), so that the latent of exogenous
the obtained value of the GoF is 0,849. It means that the
variables as explanatory variables is able to predict the
performance combination of the measurement of the outer
endogenous variables, namely Employee Retention.
model and inner model is very good/high overall because
Evaluation of Structural Model (Inner Model) and
GoF > to 0.38 (high scale).
Hypotesis Tests

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 F-Square Value

Label Variable F-Square Y2 Description F-Square Y1 Description

X1 Talent Acquisition 0.352 Medium 0.190 Weak
X2 Talent Development 0.056 Weak 0.010 Weak
X3 Compensation Strategies 0.094 Weak 0.062 Weak
X4 Succession Planning 0.034 Weak 0.005 Weak
Y1 Job Satisfaction 0.057 Weak
Y2 Employee Retention
Table 5:- F-Square Value

Talent Acquisition has a medium (0,352), it means this variable has a stronger influence than the other variables in this study.

F. Hypothesis Tests

 Direct Effect

Hypothesis Variable T- Statistic P- Values Result

(O/STDEV)
H1 Talent Acquisition --> Employee Retention 4.114 0.000* Accepted

H2 Talent Acquisition --> Job Satisfaction 3.599 0.000* Accepted

H3 Talent Development --> Employee 1.983 0.048* Accepted
Retention
H4 Talent Development --> Job Satisfaction 0.840 0.401 Rejected
H5 Compensation Strategies --> Employee 2.462 0.014* Accepted
Retention
H6 Compensation Strategies --> Job 2.030 0.043* Accepted
Satisfaction
H7 Succession Planning --> Employee 1.487 0.138 Rejected
Retention
H8 Succession Planning --> Job Satisfaction 0.663 0.508 Rejected
H9 Job Satisfaction --> Employee Retention 1.986 0.048* Accepted
Table 6:- The Result of Direct Effect Hypothesis tests

 Hypothesis 1 - Talent Acquisition significantly affects Gopinath and Tarajan’s research (2014) which states
on Employee Retention. The obtained value of T- that recruitment and selection has a significant influence
Statistics were 4,114 and P-Value 0.000, therefore H1 is on Job Satisfaction. The results of another study that
accepted because the T-Statistic (> 1,96) and P-Value supports that statement also mentioned by Aminuddin
(<0,05). Talent Acquisition has a significant positive and Yaacob (2011) that Talent Acquisition specializes
impact on Employee Retention. This is in line with in the recruitment process has a significant influence on
Kogo and Gachunga’s research (2016), Talent Job Satisfaction.
Acquisition has a significant positive impact on  Hypothesis 3 - Talent Development significantly affects
Employee Retention, it could be interpreted that the on Employee Development has a significant effect on
better implementation of recruitment, selection, and Employee Retention. According to that study a good
onboarding within the company then it will effect on strategy of Talent Development able to increase
Employee Retention. On the other hand, Talent Employee Retention. Furthermore, the results of these
Acquisition is also very useful to attract the talent to be findings are also supported by Chukwuka and
able to join the company when the company is able to Nwakoby’s research (2018) about the influence of
manage the brand then the number of talents who are HRM practices on Employee Retention, one of the
interested to join will progressively increase (Karuri dan variables studied and the significant effect is talent
Nahashon, 2015). developing.
 Hypothesis 2 - Talent Acquisition significantly affects  Hypothesis 4 - Talent Development significantly affects
on Job Satisfaction. The value of T-Statistics obtains on Job Satisfaction. T- Statistic obtains 0,840 and 0,401
3,599 and 0.000 for the P-Value, therefore H2 is for the P-Value, therefore H4 was rejected because the
accepted because the T-Statistic (> 1,96) and P-Value T-Statistic (< 1,96) and P-Value (>0,05). But this has a
(<0,05). Talent Acquisition significantly influences Job good correlation which means the better implementation
Satisfaction. The result of this hypothesis is in line with of the Talent Development program, the higher the Job

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Satisfaction of the employees could be reached,  Hypothesis 7 – Succession Planning affects
however it is not significant (in this study). Talent significantly on Employee Retention. T-Statistic value
Development does not affect significantly to Job obtains 1,487 and 0,138 for the P-Value, therefore H7 is
Satisfaction. This also occurs in Jabid’s study (2016) rejected because of the T-Statistic (< 1,96) and P-Value
which found that the Talent Development variable does (>0,05). Succession Planning does not significantly
not significantly influence Job Satisfaction. It can be influence Employee Retention. The insignificant of
said that Talent Development is not strong enough yet Succession Planning on the Employee Retention
to improve the Job Satisfaction of employees. In supported by Salama’s research (2014) Statistic
addition, in Artiningrum and Satrya’ study (2016) states obatains 2.462 and P-Value 0,014, therefore H5 is
satisfaction into both training and career development accepted because the T-Statistic (> 1,96) and P-Value
does not provide a guarantee for a person to survive in (<0,05). which states that a company relies on the
the organization, so that it is necessary the presence of services of head hunting and outsourcing is not so
another strategy to be implemented to improve the Job convinced that the policy of Succession Planning will
Satisfaction of employees. give impact on the motivation and the desire to survive
 Hypothesis 5 - Talent Compensation Strategies in the organization until retirement.
significantly affects on Employee Retention. The value  Hypothesis 8 – Succession Planning does not affect
of T- Retention. The value of T-Statistics obtains 2.125 significantly on Job Satisfaction. The value of T-
and 0,034 for the P-Value, therefore H3 is accepted Statistics obtains 0,198 and 0,508 for the P-Value,
because the T-Statistic (> 1,96) and P-Value (<0,05). therefore H8 is rejected because of T-Statistic (> 1,96)
Talent Development significantly influences Employee and P-Value (<0,05). Kafyeta (2015) in her research
Retention. Koskey and Allida (2017) also found that states that the company is not capable enough to ensure
Talent. Talent Compensation Strategies effect employee satisfaction with the program of Succession
significantly on Employee Retention. This hypothesis is Planning, so it is not able to foster Employee Retention.
in line with the study of Hong,et,all (2012) who The company tends to lose employees because there is
research about the influence of HR practices on no ability in running a Succession Planning program.
Employee Retention. One of the variables studied was Though employees should also be encouraged to
Compensation Strategies, where this variable has a develop and find opportunities to improve their career
significant effect on Employee Retention. In addition, in their job.
research from Prasetya and Suryono (2014) also find a  Hypothesis 9 - Job Satisfaction significantly affects
significant effect between compensation and Employee Employee Retention. The value of T-Statistics obtains
Retention. 0,198 and 0,048 for the P-Value, therefore H5 is
 Hypothesis 6 - Talent Compensation Strategies accepted because of the T-Statistics (> 1,96) and P-
significantly affects on Job Satisfaction. T-Statistics Value (<0,05). Lisdayanti (2015), who did research
value obtains 2,030 and P-Value 0,043, therefore H5 is about Job Satisfaction on Employee Retention, found
accepted because of the T-Statistic (> 1,96) and the P- that Job Satisfaction significantly affects Employee
Value (<0,05). Research from Maboso and Dlamini Retention. Then Salim and Irvianti (2015) are also
(2017) also mention that the compensation strategies strengthened by the results of their research which
have a positive and significant influence on Job stated that the practice of human resources and Job
Satisfaction. An institution must improve compensation Satisfaction positively and significant effect on
strategy in order to improve the dedication and Job Employee Retention.
Satisfaction of employees which will increase
employees’ commitment to remain in the organization.

G. Indirect Effect

Hypotesis Variable T-Statistics P- Values Result

(O/STDEV)
H10a TA --> JS -->ER 0.980 0.048* Accepted
H10b TD --> JS --> ER 1.446 0.149 Rejected
H10c CS --> JS --> ER 1.553 0.121 Rejected
H10d SP --> JS --> ER 0.007 0.938 Rejected
Table 7:- Indirect Effect

This is in line with Ncube’s research (2016) who strong influence directly against the independent variable.
found that Talent Management aspects have no significant In this study, although the Talent Acquisition significantly
effect on negative retention/intention to quit through Job affects Employee Retention through Job Satisfaction, the
Satisfaction. Although the independent variable has indirect effect is weaker than the direct effect. So the
significant direct influence but, indirectly, found influence of Talent Acquisition to Employee Retention
insignificant results. The independent variables have a

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ISSN No:-2456-2165
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