A Structural Equation Modeling Approach to Strategic HRM Practices, Employee Engagement, and Workforce Sustainability

Abstract

The emergence of strategic human resource management (SHRM) practices can be seen as an important tool for boosting employee engagement (EE) and sustaining the workforce. This paper examines the effect of SHRM practices on the issue of employee engagement and workforce sustainability by adopting an SEM approach. In this regard, the main aim of the study is to understand how SHRM helps in achieving employee engagement and fostering a sustainable workforce. The research was carried out using a quantitative approach whereby data were gathered from 200 individuals using questionnaires developed on a five-point Likert scale. The stratified random sampling technique was used for this purpose. The gathered data were analyzed using correlation, regression, and SEM techniques. The results indicate that SHRM practices have a significant and positive effect on employee engagement (β = 0.674, p < 0.001). The correlation analysis showed the existence of strong relationships between employee engagement and factors related to the dimension of workforce sustainability, such as the well-being of employees (r = 0.682), employee retention (r = 0.721), and organizational commitment (r = 0.748). As a result of the application of the SEM technique, it has been proven that SHRM practices have a positive effect on employee engagement (β = 0.674, p < 0.001) and workforce sustainability (β = 0.320, p < 0.001), whereas the impact of EE on workforce sustainability is also significant (β = 0.590,
p < 0.001). The indirect effect of SHRM practices mediated by employee engagement is significant (β = 0.40, p < 0.001).