The Influence of Non-Physical Work Environment and Compensation on Employee Engagement of Millennial Employees in Riau Province

Deandra Angelita Meliala1*, & Dian Indiyati2
Department of Management, Telkom University, Indonesia
DOI – http://doi.org/10.37502/IJSMR.2025.8310

Abstract

Millennials are increasingly becoming a focus in demographics, especially in Riau Province, where the 2020 Population Census indicates that they account for 26.6% of the total population. Research shows that 9% of millennial employees are disengaged, while 66% are only partially engaged, which could lead to further disengagement if companies do not take immediate preventive actions. Workers in the mining and palm oil plantation sectors in Riau Province face high psychosocial hazards due to harsh working conditions, workloads that are disproportionate to wages, and workplace relationships, adding urgency to this research. The aim of this study is to analyse the impact of non-physical working environment and compensation on the engagement of millennial employees in Riau. The research method employs a quantitative survey using questionnaires distributed to 125 millennial employee respondents from companies located in Riau Province. Data analysis is carried out using Structural Equation Modelling (SEM). The results show that not only does compensation have a significant impact on employee engagement, but non-physical working environment also has a positive impact on employee engagement. Data analysis utilizes Structural Equation Modelling (SEM). The results indicate that compensation has a significant impact on employee engagement, as does the non-physical work environment, which also positively influences the level of employee engagement.

Keywords: Employee Engagement, Non-Physical Work Environment, Compensation, Millennial Employees, Riau Province.

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