The report of the 19th National Congress of the Communist Party of China clearly stressed that harmonious labor relations, which include negotiation and coordination mechanism involving government, labor unions and enterprises, should be established. In the crucial transitional period of labor relations, the labor unions of enterprises play new roles and assume the new mission of the times. This paper focuses on the effect of position of labor union chairman on employees’ willingness to stay, as well as the mechanism, with the employer-employee matching data of Nanhai district in Guangdong province in 2016. The heterogeneity analysis is discussed as well. The results show that the position of labor union chairman has a significant effect on the employees’ willingness to stay: employees have stronger willingness to stay in an enterprise with labor union chairman who is grassroots manager. The labor union chairman elected from the grassroots affects the employees’ willingness to stay via several channels. These channels include protecting welfare and overtime wages, increasing salaries, signing contracts, extending the duration of contracts, and enhancing the sense of security, by negotiation and coordination. This effect is higher in subsamples of private enterprises, high-tech enterprises and employees who are born before 1990. This research finds new policy insights into how companies can effectively retain employees in the new age, that is, enterprises should vigorously promote the direct election system of labor unions, effectively select the chairmen of labor unions from the grassroots employees or grassroots managers, and make the labor unions truly become the organizations that grassroots employees elect and manage in their own right, to make the chairmen of the labor unions safeguard legal right more securely, and achieve the purpose of uniting the staff and retaining them. This paper expects to have two main marginal contributions: first, in recent years, the high turnover rate of employees, and employee turnover intention or intention to stay are widely concerned in academia. Scholars mainly study from the perspectives of job satisfaction and organizational commitment, promotion opportunity, work pressure, job embeddedness, salaries and benefits and their fairness, job conversion costs and chance to access to new jobs, but neglect the impact of the important variable of labor union chairman’s position on employees’ willingness to stay. Compared with the existing researches, this paper gives new empirical evidence for the factors affecting employees’ willingness to stay. Second, the existing studies mainly focus on wage premium and wage inequality, promoting the signing of contracts, improving the structure of the term of employment and other aspects of labor unions or the status and role of labor union chairman. However, there is no literature that studies the impact of labor union chairman’s position on employees’ willingness to stay. Exploring this issue will help us to understand more deeply the labor unions and the role of labor union chairman.