**Abstract**

The construction industry is one of Australia's fastest growing industries and its success is a result of a firm's client satisfaction with focus on product determinants such as price and quality. Ensuring quality at every phase is a must and building rapport with the client will go a long way. To capitalise on the growing demand for Engineering Consulting Firms (ECFs), we should "redefine the bottom line by allowing client satisfaction, high-quality standards, and profits to be the top priorities". Consequently, the emphasis should be on improving employee skills through various training provisions. Clients seek consistency and thus expect that all services should be similar in respect to quality and the ability to meet their needs. This calls for empowerment and comfortable work conditions to motivate employees and give them incentive to deliver quality and excellent output. The methodology utilised is triangulation-a combination of both quantitative and qualitative research. The case study-ACE was established in 1995 and has operations throughout Australia, the Philippines, Europe, U.A.E., K.S.A., and Lebanon. ACE is affiliated with key agencies and support organisations in the engineering industry with ISO certifications in Safety and Quality Management. The objective of this study is significant as it sheds light on employee motivation and client satisfaction as imperative determinants of the success of an organisation.

**Keywords:** organisational behaviour, leadership, satisfaction, motivation, quality service

## **1. Introduction**

In today's market where competition is fierce, firms conduct research [1] to discover client preferences. Organisations keep close watch on the priorities of the clients and monitor their satisfaction levels so that they can improve their services because there is a direct relationship between satisfaction and loyalty. Accordingly, employees of Engineering Consulting Firms (ECFs) need the required resources,

work conditions and professionalism to enable them to establish rapport and demonstrate positive attitude with clients.

Indeed, the client has a perceived expectations and this is a major factor that affects satisfaction [2]. Employees should be able to attend to clients' needs and resolve problems efficiently and obviously motivated employees will produce better results in this respect in comparison to discontented employees. Engineering consultants deal with a variety of clients in their profession. Therefore, it is important that engineering consultants understand the determinants of client satisfaction to improve their likelihood of project success in the short-term and continual business opportunities in the long-term.

Research [3] on the determinants of client satisfaction typically focuses on product determinants such as price and quality. However, research investigating the human resource (HR) determinants of engineering consultants and their impact on client satisfaction is limited. By understanding engineering consultancy from an HR perspective, decisions can be made more effectively to improve the likelihood of project success. The most important resources of an organisation are its employees and thus their contribution to the company's image is very crucial in terms of behaviour and actions.

According to [4], it can be said that the factors involved constitute an appropriate style of leadership, motivating the middle and lower-level employees and developing a warm relationship. Such factors are crucial for direction and are considered as the ability of the driver to acquire performance on the part of subordinates on individual basis in an organisation. Employees should perform significant roles in earning clients' trust. Companies are facing not only local but also international competition, thus they must invest in implementing more sophisticated technology and developing new products to ensure approval. Accordingly, companies need to hire professional consultants and encourage separate departments to brainstorm strategies to deal with competition.

In turn, to overcome the challenges that a firm may face in this twenty-first Century, Human Resources Management "HRM" is a very crucial variable. It helps in making the firm more effective and efficient in its day-to-day activities and facilitates the acquisition of talented individuals through training and organisational development [5]. Thus, the conditions for an ECF to achieve client satisfaction are clear, open communication and professionalism of service. It is essential to understand the needs of clients which can be followed up by a Clients Care Manager "CCM". Ensuring quality at every phase is a must and building rapport with the client will go a long way. All these exercises will result in client satisfaction. When the clients are satisfied, this will result in repeated business. Hence, new clients will be attracted due to 'word of mouth' and this will save marketing costs and ultimately, the firm's reputation will be enhanced. In sum, there is a direct relationship between employee motivation and client satisfaction; a firm that takes care of its employees will not have to worry about client satisfaction [2].

#### **1.1 Importance of research**

Most consulting firms depend on client satisfaction to achieve competitive advantage [6]. This is because with positive client satisfaction, consulting firms can enjoy increased loyalty, a reduced marketing effort through word of mouth and positive reviews. This also creates greater networking opportunities to grow the client base and builds a more attractive environment for recruiting the best talent [7]. In the

#### *Quality Determinants of Client Satisfaction: A Case Study of ACE – Australian Consulting… DOI: http://dx.doi.org/10.5772/intechopen.113988*

consulting industry, clients have trouble perceiving a service advantage due to the intangible nature of the products [8]. An interesting challenge that engineering consulting firms face when trying to deliver client satisfaction is the double-edged sword of their pricing fees. Clients tend to prefer lower fees; however, lower fees provide the ECF with a smaller budget to perform their contract. With a smaller budget, it can be difficult to ensure the quality requirements that the client would prefer [9].

To capitalise on the growing demand for engineering consultants, ECFs must "redefine the bottom line by allowing client satisfaction, high-quality standards, and profits to be the top priorities" [10]. The choice of organisations available to the employees and the choice of products available to the clients have increased which has made it important for the organisations to adopt strategies that ensure retention for the organisation. It has also become important for organisations to maintain an employee friendly atmosphere. Competitive advantage is based on training, recruitment, effectiveness, and efficiency that will eventually impact the financial stability of the organisation. According to a study [11], employees that tend to be dissatisfied with their jobs are unable to provide quality service and become demotivated. Thus, it is essential for organisations to identify the performance loopholes and provide adequate training opportunities to ensure employee development. Empirical evidence [11] suggests that organisations that offer opportunities of personal development tend to have higher employee satisfaction.

Moreover, strategies for training programmes and employee engagement activities can help an organisation to develop sustainable employee satisfaction. One study [12] shows that clients base their perceptions on employee intercommunication and the quality of services provided. An employee can build a relationship of trust and loyalty with the clients when they are satisfied with their jobs and are well aligned with the mission and goals of the organisation [12]. In addition, another study [13], confirms the direct association between employee motivation and client satisfaction. Accordingly, the findings of [13], suggest that it is crucial for the organisation to realise the value of talent retention to attain a stable financial position for the organisation.

In short, an organisation must display continuous commitment to employee welfare. However, the findings of a study [14], suggest that it becomes difficult for an organisation to attain desired levels of employee satisfaction because of the diverse nature of employees. As thus, it becomes difficult for employers to understand the needs and motivational factors amongst the employees [14]. Consequently, employers need to be aware of and analyse the behaviour of employees to adopt strategies that increase motivational levels. In accordance, [15] recommend that companies wishing to enhance the level of client satisfaction need to focus on building holistic models that include the concepts of employee satisfaction.

Consequently, this study will evaluate the impact of employee motivation on client satisfaction in Engineering Consultancy Firms (ECFs). The research findings of the study will assist in taking adequate steps for achieving desired levels of employee motivation and client satisfaction, and as a result, in improving the reputation of the organisation in the business environment. Thus, the findings of this study can prove to be helpful for employers and top management. The findings of the study will also increase the knowledge base of the present literature and will help researchers validate future results for the other organisations in the business environment. Because employee motivation and client satisfaction are important determinants of organisational success, this study will determine the objectives of increased productivity, employee motivation and client satisfaction.

## **1.2 Research questions**

Initially, this research aims to fill the research/knowledge gaps identified in the presented literature review. By conducting a study based on these gaps, ECFs will be able to understand the link and how it can benefit them. More precisely, this research will attempt to identify and test the key factors that lead to client satisfaction (CS) in the context of ECFs. From the various literature reviews that were undertaken, these five human resource factors were identified and will be investigated hereafter: experience and knowledge, motivation, proximity, professionalism, and care factor. In addition, this research will investigate the causal relationship between client satisfaction, client retention, and "word of mouth", as conventional relationship marketing consequences.

Moreover, the analysis in the study is conducted with an aim to find relevant and precise answers to the research questions. It should be noted that these questions are intended to increase knowledge on the subject of interest and hence, they will remain within the scope of the study as they have the potential to both increase the complexity and the difficulty of the statistical analysis. According to a study conducted by [16], research questions are considered as catalysts of a research study because they define the focus of the research and depict what should be the result of the research study.

The objectives of this research are:


Furthermore, to fulfil the aim of the study, the following research questions have been framed:


### **1.3 The case study: ACE an engineering consulting firm**

Dr. Anthony S. Hasham is the founder and Managing Director of Australian Consulting Engineers Pty Ltd. "ACE". He is a Certified Practicing Engineer

*Quality Determinants of Client Satisfaction: A Case Study of ACE – Australian Consulting… DOI: http://dx.doi.org/10.5772/intechopen.113988*

(C.P.Eng.-Aust.), a Fellow member of the Institute of Engineers (F.I.E.-Aust.), a Member of the Order of Engineers and Architects Lebanon (OEA) and is found on both the National Engineers Register (N.E.R.-Aust.) and Register of Practicing Engineers Queensland (R.E.P.Q.). Furthermore, Dr. Hasham has sat on numerous boards with the most current positions being President of the Maronite Catholic Society and Vice President of the Australian Lebanese Chamber of Commerce.

In 1993 he joined the board of directors for Unaveave Consulting Pty Ltd., and in 1995 established Australian Consulting Engineers, initially providing consultancy services in the field of Structural, Civil, and Stormwater Engineering. ACE has since expanded operations throughout Australia and internationally offering consultancy services in the fields of Structural; Post-tension; Remedial; Civil/Stormwater; Temporary Works and Building Services (Mechanical, Electrical, Hydraulics and Fire Services) engineering, with over 200 staff Australia wide and internationally, spread throughout Australia, the Philippines, Europe, U.A.E, K.S.A., and Lebanon.

Furthermore, ACE is affiliated with key agencies and support organisations in the engineering industry. In addition to being a corporate member of Consult Australia and member of Engineers Australia, ACE is certified by the NSW Government Work Health and Safety Management Systems. ACE is a fully certified ISO9001:2015 Quality Management Systems Company across all disciplines. Being involved with over 15,000 projects during his 30 years in engineering consulting, Dr. Anthony Hasham has a vast experience in customer service, with a large customer base from which to extract data for the purpose of this research.

#### **2. Literature review**

Employee motivation and client satisfaction are two vital concerns of any organisation. Their contribution to the company's image is crucial in determining the views that clients keep in mind whilst thinking about the organisation's behaviour and actions. Loyalty to the organisations' clients incurs capital investments, which should include employees' motivation to achieve the company's non-monetary and economic objectives. Organisations are increasing their efforts to ensure that harmony exists between employee motivation and client's satisfaction to increase the chances of success.

In Ref. [17], proposed that ultimately, client satisfaction is based on previous studies and some theorised "cognitive framework of satisfaction-related concepts" through various literature. Consumer satisfaction is believed to influence attitude, change and purchase intention. In Ref. [17] further suggests that performancespecific expectation and expectancy disconfirmation play a key role in satisfaction decisions into a framework of satisfaction-related concepts. In turn, satisfaction increases as the performance/expectation ratio increases. This view was based mainly on the results of a seminal laboratory study by [18].

According to [19], client satisfaction is a significant indicator of client retention, and it also indicates their purchase intentions. The level of client satisfaction provides the company with a real picture about the degree to which products and services are satisfactory to the end consumer. Likewise, client satisfaction has a strong link to organisational success. Consulting firms that can ensure a positive client experience can gain a strong competitive advantage over their rivals. Client satisfaction is a measure of a consulting firm's success [10] and similarly enhances organisational reputation. Therefore, ECFs that can ensure positive client satisfaction will experience a wealth of benefits. In sum, client satisfaction is imperative for it provides a foundation to generate revenue and to gain profits at all levels.

*The Institution of Professional Engineers New Zealand* guided practicing engineers on the importance of client relationships in their handbook, "Developing and Maintaining Client Relationships" (2005). The handbook outlines the significance of client relationships and explains that the clients experience usually determines feedback and plays an integral role in either making or breaking the engineer's reputation. As such, client experience can be two-fold. Positive client satisfaction can bring a wealth of benefits to both the organisation and the individual. On the other hand, negative client satisfaction can severely hamper the ability for the organisation and the individual to grow and succeed.

For these reasons, [20] stresses that client retention is crucial for a company. Retaining a client is more important than acquiring a new one. Clients' satisfaction is thus considered as a basis for client retention as our goal is to meet their needs and requirements. When clients are happy, there are limited chances that such clients will shift to the rival for the same or comparable products. Thus, the chances of client retention are high, and this helps the company save money in acquiring new clients. Furthermore, organisations focus on client satisfaction strategies because without satisfied clients there is no business [21].

Besides, client satisfaction is the comparison between clients' expectations and their actual perspective of the service once it has been delivered [22, 23]. Without a doubt, a satisfied client is more likely to return for repeated business and create a positive word of mouth that may improve an organisation's reputation [24]. With the engineering consulting industry becoming more competitive, it is now easier for dissatisfied clients to compare services and do business with a direct competitor. As well as this, dissatisfied clients are more likely to tell other people about their experience and consequently, create a negative image [21].

Indeed, word of mouth (WOM) marketing is a tactic used to generate natural discussions about and recommendations for a product or company. Essentially, getting people to talk about your brand, product, or business is the goal of this type of marketing. Everyone wants people talking about their products because those conversations are what creates a buzz and drive business. Word-of-mouth marketing (WOM marketing, also called word of mouth advertising) differs from naturally occurring word of mouth, in that it is actively influenced or encouraged by organisations. Whilst it is difficult to truly control WOM, research [25] has shown that there are three generic avenues to 'manage' WOM for the purpose of WOM marketing: (1) a strong WOM foundation (sufficient levels of satisfaction, trust and commitment); (2) indirect WOM marketing management which implies that managers only have a moderate amount of control (controversial advertising, teaser campaigns, customer membership clubs); and (3) direct WOM marketing management, which has higher levels of control (paid WOM 'agents', "friend get friend" schemes).

Evidently, satisfied clients become a potential source of advancement for a company. When clients are satisfied with the products and services of the company, then individuals provide a positive word of mouth [26]. Overall, this helps the company to spread awareness to a wider population without incurring high costs of advertisement. Similar viewpoints [27] are pertinent to the positive implications of client satisfaction on the goodwill of a company as this provides an enhancement of reputation in the marketplace. Accordingly, this research aims to ascertain whether there is an association between the empowerment of managers and the delivery of quality service. There are several factors that influence the motivation of managers, such as

#### *Quality Determinants of Client Satisfaction: A Case Study of ACE – Australian Consulting… DOI: http://dx.doi.org/10.5772/intechopen.113988*

perceived fairness of the promotion system, employee rewards and recognition, interpersonal relationships, and work security. Against this backdrop, the current study focuses on the active role played by managers in the provision of quality service that facilitates satisfaction on the part of clients. In other words, it identifies six key factors that play a pivotal role in the motivation of managers: sense of purpose to work, challenges at work, leadership in the workplace, financial gain, career progression, and the work environment.

It should be noted that the impact of trust has been investigated [28] along with its implications on future relationships and choice of future purchase. High organisational performance is then a prediction of managers' commitment to organisational goals, which, in turn, can be reflected in their attitudes and actions. The objectives of an organisation are influenced by the level of employee satisfaction, support, respect, and working conditions. It is to the benefit of an organisation to ensure the social and psychological well-being of their employees to ultimately ensure greater productivity.

In his famous Hierarchy of Needs, Abraham Maslow intensely talked about the second need-the sense of belonging. This stresses that managers with a sense of belonging are more, resolute, engaged, and motivated when executing assigned tasks. They are known to have greater confidence, interest, enjoyment, and enthusiasm when engaged in organisational activities. Managers not only work harder to provide better services, but also step outside their comfort zone to deliver quality services that are in alignment with client needs. A study [29] demonstrated that employees with a sense of belonging exhibit greater dedication in delivering services with improved quality. The argument is grounded on the theory of equity in social justice, which preaches that transactions can potentially pave the way for high-quality relationships [30]. When managers are accorded social gifts that are beyond their expectations, they tend to develop a sense of belonging, responsibility, and satisfaction, which, in turn, makes them more focused on addressing the needs and concerns of their clients.

Another pillar of human resource management is training and development and there is overwhelming evidence in favour of its effectiveness in team building [31]. In Ref. [32] concurs with this viewpoint and stresses that training programmes must be targeted at evidence-based strategies. Some clients are hard to deal with and they may become abusive, impatient, and angry. Effective client service involves the maximisation of aid that can be offered to clients whilst tolerating their behaviour. In this regard, training and development can help guide employees on the need to show respect to their clients by avoiding destructive remarks, recognising the regular clients, and not imposing negative attitudes [33].

In addition to this, the inability to cultivate relationships with clients often accompanies the failure to understand different personalities and communication styles, but this is a problem that can be addressed through effective training. Training and development provide a framework of understanding clients, which then makes it easier for members of an organisation to understand the needs and the problems of clients. Thereafter, the appropriate strategies can be developed to resolve these problems whilst minimising stress [34].

Above all, Abraham Zaleznik wrote the first landmark scholarly article that encapsulated the distinction between leadership and management. In this regard, [35] asserted that whilst both managers and leaders are needed in an organisation, they each make different contributions. For instance, with respect to goal setting, leaders articulate a vision and create the future; on the other hand, managers execute the plan and improve the present. Managers are branded with the tendency to exercise authority, promote stability, and focus on getting things done. In contrast, leaders pay close

attention to the adoption of changes, new approaches of boosting productivity; they focus on the beliefs of people to boost their commitment [35, 36]. Certain scholars [37] contend that the two are diametrically opposite as they speculate that a good manager cannot be a good leader and vice versa.

To continue the motivational process for employees, it is crucial that the organisation provides them with the appropriate opportunities that will lead to growth. This nurturing process should exist not only for their career but also for personal development that directs individuals for future career progression [38]. Consequently, it is the responsibility of the leader or the supervisor in the organisation to develop career advancement paths and fair promotion policies for all the employees in the organisation.

In turn, the organisation has an obligation to establish various development and training programmes that will ensure the personal development of the employee whilst being a part of the organisation. It becomes essential for the organisation to understand and acknowledge that investing in training and development programmes will undoubtedly steer the organisation to enhance productivity and motivation and hence, effective contribution towards the goals of the organisation [39]. This managerial concept is known as Investment in People (IiP) [36]. Without a doubt, the lack of an adequate career path and promotion policy in the organisation can negatively impact the motivation level of the employees.

Subsequently, client satisfaction and employee rapport—'a close and harmonious relationship in which people and/or groups concerned understand each other's feelings or ideas and communicate well', have a positive link to client loyalty [40]. A commitment in relationship management [41] can be created through interactions, reciprocity, and trust. By investing the time and effort into affective commitment, it "creates psychological bonds that encourage clients to stay in that relationship and sets an expectation of reciprocation" [41]. Apart from this, [42] found three elements that constitute the quality of employee relationships-conflict handling, commitment, and trust. In Ref. [43] also consider commitment and trust as the elements of relationship quality. Within the context of the consumer market, the involvement or interaction of clients does not differentiate amongst the person offering the service and the company itself.

Last, but not least, we will now focus on the employee care factor. Highly engaged employees that care about their work and their clients are a key link to client satisfaction, performance outcomes and loyalty*.* When employees know that they are cared for, they become more engaged, dedicated, committed, and take more initiative in their work [44]. Furthermore, employees with the highest levels of commitment usually show higher performance by about 20% [45]. Some organisations define employee engagement as "going above and beyond" what is expected of them in their work roles [44]. Briefly, employee engagement is often defined as an "emotional and intellectual commitment" to the organisation [44]. It is a state where employees can value, enjoy, and believe in what they are working for. Employees that are not engaged will often waste their time and effort on tasks that do not matter and are often dissatisfied and do not complete tasks with full commitment. So, when employees feel more engaged in their work, they are more likely to offer better quality service, thus improving client satisfaction and promoting client loyalty [45].

The methodology adopted in this paper will be further discussed in detail in Section 4.

*Quality Determinants of Client Satisfaction: A Case Study of ACE – Australian Consulting… DOI: http://dx.doi.org/10.5772/intechopen.113988*

## **3. Hypotheses**

This study used mixed methods research to analyse the causality and correlation between clients' gratitude and managers' motivation. Triangulation, both quantitative and qualitative investigation was utilised. Qualitative analysis was used to explore the market and justify the set of hypotheses that were devised. Qualitative research methods often use small sample sizes and involve techniques such as in-depth interviews, open-ended surveys, focus groups, and uninterrupted observations [46]. On the other hand, quantitative analysis is described as *"being scientific in nature"* due to its more rigorous approach in its use of *"scientific methods for data collection and analysis*" [47]. In turn, quantitative methods are used to verify data and models, and due to their large sample sizes and ease of replicability, the results can be confidently extrapolated to the general population [47]. Since the theme of this research "The Human Resource "HR" Determinants of Client Satisfaction from a Client Based Perspective", the researchers chose not only quantitative but also qualitative methodology to analyse and verify the effects.

Evidently, a study conducted by [12] shows that clients tend to base their perceptions of an organisation on the way in which employees communicate with them as well as on the quality of services provided. In other words, an employee can build a relationship of trust and loyalty with clients when they are satisfied with their jobs and feel they are well aligned with the mission and goals of the organisation. As such, for organisations to ensure the highest success rate, it is essential for them to develop positive work environments. Research [48] recommended that if a company wants its employees to be fully dedicated, they should provide them with learning and growth opportunities. In addition, it found that providing effective learning or growth opportunities and benefits to employees can significantly increase employee dedication. In turn, the dedicated employees will strive to help the organisation to meet its strategic objectives. Moreover, this research proved that employee pro-social behaviour and dedication are positively related to the improvement in the perceived transformational leadership execution. For these reasons, when employees feel that managers are implementing a high-level transformational leadership approach, they display dedication and pro-social behaviour [42]. Refer to Figure below for the Final Conceptual Model.

#### **4. Methodology**

This section will highlight the methods, processes and activities that were performed in this research. Background knowledge for the analysis will also be provided to explain what software contributed to the data analysis and as a result, answered the questions presented in part one and justified the hypotheses presented in part three. The most important research question for ECFs is to investigate the main human resource determinants on client satisfaction and the consequences that will lead to client retention and free marketing in the form of word-of-mouth.

For one thing, the introductory questionnaire included items pertaining to the general background of the firms. The various other questionnaires were each specific to the variables that formulated both the questions and hypotheses. For instance, the variables covered client satisfaction, needs, preference; employee experience, knowledge, motivation, professionalism; and the overall care factor, retention, and

word-of-mouth. The Final Conceptual Model used is illustrated in **Figure 1** below. Ultimately, the process of preparation, codification, distribution, collection, and analysis of data was initiated. The results were used to establish the proposed model and were tested using statistical software such as, the Statistic Package for Social Science Statistics 24: IBM-SPSS Statistics 24 and IBM-SPSS-Amos 26. The primary use of *SPSS* is for data and variable organisation and management and provides a valuable tool to manage the data that was imported into *SPSS* from a *Microsoft Excel file* after the results were extracted from the survey package Jot-form.

For clarification, the introductory questions requested information from the clients to validate the respondent ensuring that they belong to the target audience. This information was also used to group each respondent by certain demographics and controls, such as age, position, experience with engineering consultants, value of project, and type of engineering consultant used. Anonymity of the respondents was assured and so questions were designed carefully as not to identify participants; the engineering firms that were part of the sample are prominent and successful members of Australia's elite. To elaborate, the seven-point Likert scale was employed so that the survey was able to meet the requirements of validity and reliability that were measured by Cronbach's Alpha.

At this time, there was much debate as to how large the sample should be and in accordance with the context of the study, numerous sample sizes were considered. A consensus amongst researchers is that a sample size of approximately 200 is usually suitable [49, 50]. There is also evidence that a meaningful analysis can be conducted with at least 100 samples [51]. Nonetheless, ACE decided to opt a random selection of 1000 that had been their clients for the last 3 years. The online survey on jot-forms was distributed via email to the above-mentioned clients. Of the 1000 emails, 273 bounced back, indicating that it was the wrong email or that the person no longer worked at this firm or address. Along with this, of the remaining 727 emails that were delivered, only 256 clients responded indicating a response rate of approximately 35%.

Once the data had been screened, the dataset was ready for the exploration of the quality of the measurement scales using an Exploratory Factor Analysis (EFA).

#### **Figure 1.**

*Final Conceptual Model used in the analysis.*

#### *Quality Determinants of Client Satisfaction: A Case Study of ACE – Australian Consulting… DOI: http://dx.doi.org/10.5772/intechopen.113988*

EFA is used for the exploration of the underlying structure amongst initial variables (or items) included in the analysis. It helps determine if theses initial variables are factorizable, and if the computed factors are interpretable. The *Exploratory Factor Analysis (EFA)* is a statistical approach that groups variables with strong correlations together to give a factor structure [52]. An important aspect of the EFA is that the analysis is not dependant on these constructs [52]. Rather, the EFA will identify the number of latent factors and the variables that strongly group with each latent factor based on the correlations of the observed variables.

Moreover, Structural Equation Modelling (SEM), is a technique used primarily in social and behavioural sciences and can be described as "*a combination of factor analysis and regression or path analysis"* [53]. A major advantage of SEM is its ability to measure theoretical constructs by using *latent variables*. Latent variables are factors that cannot be directly observed by themselves but can be inferred mathematically from the use of a number (usually 3–6) of observed variables [54]. In contrast, as the name suggests, an *observed variable* is a factor that can be directly measured by itself. In the case of this research, the latent variables will represent the HR determinants whilst the observed variables will be the survey question responses which can be directly measured and allows researchers to assess their theories using a testable model [55].

Overall, there are two types of variables: latent variables (unobserved variables) and measured variables (observed variables). In social science research, many variables cannot be directly measured such as the behavioural dimensions and so are placed as latent variables in the model. The reason why the behavioural dimensions are latent variables instead of measured variables is that these concepts are complex and multifaceted—a single measure will not adequately cover the whole dimension. For example, there are many variables that will be needed to cover the entirety of employee professionalism such as their appearance, manners, and ethics. Measured variables on the other hand, are variables where there is a measurement for that dataset. For instance, in the Client Retention questionnaire, one statement was: "In the future, I will use the ACE consultant for most of my engineering consultancy needs" and participants gave a score between one and seven giving an exact measurement for their retention level.

Likewise, the reliability of the measurement scales will be tested using Cronbach's alpha which is widely used to measure reliability in social sciences [56]. Cronbach's alpha measures the connection and consistency for a set of variables that are placed together as a factor. As a rule, the Cronbach's alpha value for each factor should be above 0.7 [56]. Furthermore, there are two types of validity to account for— Convergent Validity and Discriminant Validity. The aim of convergent validity is to verify that the variables in each dimension are correlated with each other or share a high proportion of variance. For convergent validity, there are three values that need to be checked which are the standardised factor estimates, the average variance extracted and composite reliability. Discriminate validity aims to verify whether there is a distinct difference between latent constructs. To measure discriminant validity, the square root of the average variance extracted is compared to the estimated correlations between the constructs.

Briefly, correlation coefficients measure the amount of shared variance that occur between two variables. The value of this coefficient determines the relationship between the relative movement of the two variables. Clearly, correlation coefficients range in value between −1.0 to 1.0—whereby a positive value means that the two variables move in the same direction and a negative value means that they move

in opposite directions. Altogether, this research will use the criteria defined by the *Multivariate Data Analysis* [57] for establishing reliability and validity of the factors.
