Falah Oriented Employee Wellbeing among Muslim MSMEs: The Mediating Roles of Job Satisfaction and Resilience

Abstract

Employee well being remains a major challenge among Muslim employees working in Indonsesian micro, small, and medium enterprises (MSMEs), where limited income, weak social protection, and unstable employment conditions often undermine sustainable welfare. From the perspective of Islamic economics, employee well-being extends beyond material prosperity toward falah, encompassing spiritual, psychological, social, and economic dimensions. However, empirical evidence examining this holistic framework remains limited. This study investigates the effects of religiosity, social capital, and financial literacy on employee well-being, with job satisfaction and employee resilience serving as mediating variables. A quantitative approach was employed using survey data collected from 180 Muslim MSME employees across Indonesia. Data were analyzed using Structural Equation Modelling Partial Least Squares. The findings reveal that social capital significantly enhances employee well-being both directly and indirectly through job satisfaction and employee resilience. These mediating variables strengthen employees' adaptive capacity and positive work experiences, thereby improving overall well-being. In contrast, religiosity and financial literacy exhibit no significant direct effects. The results suggest that achieving falah-oriented well-being requires not only individual values but also supportive social relationships and equitable workplace conditions. This study contributes to Islamic economics by extending the concept of falah into employee well-being within the MSME context.