The effect of psychological contract, employer branding and job satisfaction on turnover intention: Organizational commitment as moderating variable at start-up IT company

Abstract

IT-startup is an organization that starts a business in the technology field. The problem that is often faced is high-turnover. The reality of business processes takes a long time to develop into large companies. One of the potential factors in business success is human resources. The present study analyzes the direct and indirect effects of the psychological contract, employer branding, and job environment on turnover intention in IT start-up companies. Organizational commitment was employed as the moderating variable. The study was conducted in several IT start-up companies in Jakarta, focusing on four business fields: educational technology, IT consulting, software and hardware, and IT infrastructure. Respondents were 182 employees of IT start-up companies, recruited using a purposive sampling technique. Applying Partial Least Square, this study found that psychological contract, employer branding, and job environment, directly and indirectly, affect turnover intention. Organizational commitment was found to have the most significant direct effect on turnover intention. Meanwhile, employer branding exhibited the most significant indirect effect on turnover intention. IT start-ups need to strengthen their psychological contracts, employer branding, and job environment to reduce high turnover. IT start-ups must provide a conducive job environment to support employee work processes. This strengthens the psychological aspect of employees to stay afloat in the long term. A sense of loyalty, high commitment, and professionalism must be instilled in all employees as part of efforts to strengthen the psychological contract. The business success of an IT start-up becomes a good branding employer so that it is able to recruit potential human resources candidates. IT start-up companies need to strengthen their psychological contract, employer branding, and job environment in order to minimize turnover intention. Employees are a long-term investment for a company’s business sustainability, and their ideas, creativities, and innovation are pivotal for the company.