Business Processing Outsourcing (BPO) is one of the most promising and most lucrative industries in the Philippines. Nowadays, BPO companies are where most millennial employees jumpstart their careers; however, work engagement has been an issue. This study assessed the mediating effect of job satisfaction on the relationship between compensation management and employee engagement of millennial employees in the BPO companies in Davao Region. The statistical tools employed were specifically mean, standard deviation, Pearson r, regression, and mediation analysis through the use of Medgraph using the Sobel Z-test. The data were gathered through the use of survey questionnaires distributed among 405 millennial employees in the BPO companies in Davao Region. Results showed that both compensation management and employee engagement generated high mean scores, while job satisfaction had a moderate mean score. Moreover, there was a significant relationship between compensation management and employee engagement, job satisfaction and employee engagement, and compensation management and job satisfaction. Furthermore, the job satisfaction did not mediate the relationship between compensation management and employee engagement.
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