Employee retention remains a critical concern for Malaysian small and medium-sized enterprises (SMEs), particularly among young executives who are pivotal to the nation's economic growth. This study explores the factors influencing low retention rates within this demographic, focusing on three key variables: compensation and benefits, work-life balance, and job satisfaction which were analysed to identify the relationships between these independent variables and employee retention. Using a quantitative approach, data were collected from 131 young executives employed in Malaysian SMEs using Stratified sampling techniques and the questionnaires were distributed using online communication platforms and SPSS was used for data analysis. The findings reveal that all three variables—compensation and benefits, work-life balance, and job satisfaction—have significant positive relationships with employee retention. These results underscore the importance of offering competitive compensation packages, fostering work-life balance, and enhancing job satisfaction to address retention challenges. The study provides actionable insights for SME leaders to develop targeted strategies aimed at improving employee retention rates and sustaining their competitive advantage in the rapidly evolving business landscape.