AI-Driven HR Analytics and Employee Retention: The Role of Perceived Organizational Support

Abstract

A mixed-method sequential explanatory design was chosen for this study as it aimed to explore the impact of AI-powered HR analytics on employee retention and the moderating role of POW in this relationship. The quantitative phase included 200 employees from the organizations that had adopted HR analytics for recruiting, employee performance management, workforce planning, employee engagement tracking or employee turnover prediction, who were then selected by stratified random sampling to ensure representation across different levels and departments. The three variables measured, namely, AI-driven HR analytics, P.O.S., and ERI were captured on a five-point likert scale through a structured questionnaire. The quantitative data was analyzed using hierarchical regression and mediation analysis, followed by subsequent qualitative data analysis in which semi-structured interviews were conducted with 16 study participants who showed a perception of AI-based HR practices and organizational support in relation to their decision to stay in their organization, and analyzed through thematic analysis. The reliability of all quantitative constructs was good. The perceived organizational support had a significant positive relationship with AI-driven HR analytics, as did the retention intention. The perceived organizational support variable turned out to be a significant and partial mediator between the relation between AI-driven HR analytics and employee retention intention, as the bootstrapped indirect effect confidence interval was not empty. Interpretation of the interview data resulted in four themes that recur to explain this pattern, which are transparency and fairness of the AI-driven decision, Personalized organizational responsiveness, perceived investment in employee development and trust in human oversight of AI systems. Quantitative and qualitative findings were integrated, showing that AI-powered HR analytics helps to improve employee retention more through its indirect, mediated effect on employees' perception of the organization's value and support for them than directly. The results highlight the need for the application of AI in HR analytics that is both impactful and affirming of workers' feelings of belonging to the organization.