Unravelling Employee Retention: Exploring Psychological Contract’s Role in Bangladesh’s Garment Sector

Kudrat Khuda (), Palash Kamruzzaman and Matthijs Bal
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Kudrat Khuda: Lincoln International Business School, University of Lincoln, Lincoln LN6 7TS, UK
Palash Kamruzzaman: Faculty of Business and Creative Industries, University of South Wales, Pontypridd CF37 1DL, UK
Matthijs Bal: Lincoln International Business School, University of Lincoln, Lincoln LN6 7TS, UK

Merits, 2025, vol. 5, issue 4, 1-17

Abstract: Employee turnover remains a major concern for businesses globally. In Western contexts, the concept of psychological contract breach (PCB) is often employed to understand this phenomenon. This paper takes Bangladesh’s readymade garment (RMG) sector as a case study to explore the factors that support employee retention in their jobs, despite reported poor working conditions and associated issues in garment factories. Data were gathered among 400 RMG workers and linear regression analysis was used to answer this question. We demonstrated that while PCB was positively related to turnover intention, its impact on the retention of Bangladeshi garment workers was relatively minimal. Qualitative data showed how cultural and social factors distinct from known Western retention causes shaped our findings. The evidence presented in this paper sheds new light on employee retention in a Bangladeshi context, where socio-cultural issues challenge the PCB theory, which was developed largely based on Western economies.

Keywords: psychological contract; employee retention; readymade garments; Bangladesh; South Asia (search for similar items in EconPapers)
JEL-codes: J L M (search for similar items in EconPapers)
Date: 2025
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