Employee retention is an important factor for a company’s long-term success. Recent data shows that many Generation Z employees tend to have a desire to resign. This can be influenced by factors such as compensation and how well the work-life balance is implemented. The present study aims to examine how compensation and work-life balance affect employee retention among Generation Z employees in Indonesia, and to find out how strong their influence is. This study employs a quantitative approach utilizing a non-probability sampling method, specifically purposive sampling. The population includes Generation Z employees in Indonesia who are currently working, with a total of 250 respondents. Data was analyzed using SmartPLS 4 with descriptive analysis and Structural Equation Modeling (SEM-PLS). The results show that compensation has a positive impact on employee retention. Work-life balance also has a significant effect. Based on these findings, it is recommended that companies provide competitive compensation and support work-life balance to help retain employees in the long term.