Factors Responsible for Employee Retention

Strategic Human Capital Management

The paper is generated by referring to Christeen George’s article paper, with title of Retaining professional workers: what makes them stay?. The main issue normally practice by Human Resource is to let the turnover occur then only to find out the reason of the intention to quit through exit-interview. Knowing the reason only after people quit is seem defenseless because the collected information on why people quit fail to restore back the job gap. Hence, the purpose of this paper is to identify the factors that capable to retain the professional staffs in one organization, then the factors are tested for the retention of the professional employees. The variables used in this paper are divided into two dimensions, first dimension is organizational which consist of four factors, management, conducive environment, social support and development, second dimension is job which consist of four factors, autonomy, compensation, crafted/sculpted workload, work-life balance. Hence, the paper is driven by research questions, which are to explore whether the eight factors identified in this paper is usable to measure the individual intention to stay in the organization, are the factors identified distributed into organizational group and job group is blended positively, and whether the organizational level and job level could predict the individual’s intention to stay in the organization. The study area is conducted in UK site, the sample of the study is focusing the employees of multinational marketing company which come from variety job function such as Accountant, IT professionals, Consultants, Marketing and Sales professionals, and HR professional. The total respondents are 138, which covered 76 male, 62 female. The age range from 20 to 61 years. The measurement instrument, the questionnaires were electronically sent to the respondents.

The independent variables (IV) content of sex, age, organizational level scores and job level scores showed significant result, and that showed the IVs used are able to predict the intention of the employee to stay and to quit. The most durable IV to predict the intention of the employee to stay and to quit is organizational level scores which consist the characteristics of leadership and support from management, work environment is fun, flexibility, adequate resources, feel belong to the team, friendly and caring workmates, opportunity to enhance/acquire skills, promotion prospects. Meanwhile, the eight factors that distributed into organizational level and job level showed significant positive correlations respectively, and that showcase the eight factors were distributed in the correct group.

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Many researchers and academias give substantial focus on the impact of employee turnover, the turnover impact towards organization cause high cost. This is supported by Ghosh, Satyawadi, Joshi and Shadman (2013) literature finding stated an internal analysis has shared to replace turnover employee is more expensive than compensate employee, which is more than 35 per cent. Knowing the big loss could occur to any organization due to turnover, it is wise to prevent better than cure, the idiom may sound cliché, but it is a crucial issue to tackle in order to assist the organization to save the resources. Apart of loss in revenue, the organization is facing the risk of loss of experience employees, bad reputation to other organization, productivity is affected, loss of intellectual capital which knowledge is one of the valuable intangible asset to the organization (Sandhu, Jain, & Ahmad, 2011) and this lead to other organization gain more advantage by obtaining the asset (Ghosh et al., 2013). Turnover issue is inevitable, however the issue could be alleviated with the help of research. Hence, the paper is creating awareness about it is more advantage to identify factors that make the professional employees stay rather to identify factors on why they are quit. The paper could help the organization to understand the proven factors (management, conducive environment, social support and development under organization level is the most durable predictor) resulted from this study to strategize on how to retain the professional employees in the organization.

However, there are arose enquiries on the part of independent variables and dependent variable stated in the paper. The term of independent variable is viewed as an item that influence the outcome, meanwhile dependent variable is viewed as an outcome which may result different outcome for different independent variable are used to test (Leroy, 2011). Based to the term defined, the organizational subscale which consist of four factors, management, conducive environment, social support and development, and job subscale which consist of four factors, autonomy, compensation, crafted/sculpted workload, work-life balance are responsible to influence the result of retention. Thus, the reader expected the identified variables in the paper, organization subscale and job subscale are independent variable, and intention to quit is dependent variable, however, it is stated in opposite statement. The enquiries arose are not meant to downgrade the content of the paper, in fact, the reader made correspondent via e-mail on 11 March 2015 as in appendix to the author, respond is yet pending. The purpose of the e-mail is sent with respect and courtesy, and to clarify the doubtful and ambiguity as well.

In Malaysia context, one study presented at the 2nd International Conference On Management, Economics And Finance in Sabah by Fadzilah, Queiri, Sabarudin and Iskandar (2013) claimed that Generation Y is more likely to quit their job due to several reasons such as lack of fun work. This issue is critical and need to be taken seriously by the organization because the contribution of Generation Y towards in any economy is significant, and they are growing fast and bigger employees to replace the Baby Boomers who are in line of retirement. Generation Y showcase different characteristics when come to work which influence by leadership, developments and technologies (Cheong, Hasliza, Yusuf & Desa, 2011). Despite the respondents’ age range between 21-61 years old in the paper, which mean Generation Y and Baby Boomers are part of the respondents, the paper is capable to provide a foundation framework on how the Malaysia organizations design a strategy to retain the Generation Y. This is rational because the study conducted by the author tested the similar factors that influence Generation Y when come to work, leadership and development.

Malaysia is gearing up to beef up the human capital development by producing first class mentality, knowledge-based economy and talent-based. For instance, Talent Corporation Malaysia (TalentCorp) is responsible to facilitate the talent management in Malaysia. The biggest hurdle encountered by TalentCorp is brain drain. The professional employees choose to leave Malaysia and work abroad. TalentCorp has come with a strategy to attract and retain the professional employees which they offer various packages, such as tax exception and work life balance. Work life balance is one factor tested in the author’s study and that it is proven that the significant of the study does promote to other agency that associate to human resource such as TalentCorp to infuse the factor into part of their retention strategy. Knowing the present of TalentCorp is vital to constantly conduct research in order to ensure the objectives are achieved, thus, this paper could help TalentCorp to come out with a robust blueprint regards strategy on retaining professional employees, of which TalentCorp may considers the tested factors in the paper such as social support.

Finally, the research is emphasizing the needs to increase the number of respondents, and needed to expand larger coverage of organizations and professional employees. The wider scope as it may goes, the possibility differ outcome it may be. The factors identified and tested in this study which distributed into organizational level and job level are proven related to the individual intention to stay and to quit. Thus, the finding show significant positive for human resource and organization to design a robust strategy to retain employees. The negative impacts due to turnover or quit the job that discussed in this review could be alleviated by the help of to understand the factors influence the intention to stay and to quit. However, one of the factor in the framework model, which is compensation, may cause the small, medium, enterprises organizations to consider to use it as one of the retention strategy as they are unable to offer competitive compensation packages compare to larger organizations who use compensation as one of their retention strategies, this is supported by Ghosh et al. (2013) stated large organizations could afford to provide better compensation package such as appreciation and recognition award. In the other hand, the future research suggested in the paper is to examine the relation between employee engagement, employee retention and organizational performance. The significant of the future research would create a wider scope for the organization to understand and harvest the benefit of retention strategies.

REFERENCES

Cheong, T. W., Hasliza, D., Yusuf, M., & Desa, H. (2011). A Study on “ Generation Y ” Behaviours at Workplace in Penang Associate Professor , School of Business Innovation and Technopreneurship , Universiti Malaysia. Australian Journal of Basic and Applied Sciences, 5(11), 1802–1812.

Fadzilah, Z., Quieri, A., Sabarudin, Z., and Iskandar, H. (2013). Generation-y turnover intention in business process outsourcing sector. 2^nd International Conference on Management, Economics and Finance (pp.429-439). Sabah, Malaysia: Conference Master Resources.

Ghosh, P., Satyawadi, R., Joshi, J. P., & Shadman, M. (2013). Who stays with you? Factors predicting employees; intention to stay. International Journal of Organizational Analysis, 21, 288–312.

Leroy, G. (2011). Designing User Studies in Informatics, Health Informatics. London: Springer-Verlag London Limited.

Sandhu, M. S., Jain, K. K., & Ahmad, I. U. K. B. (2011). Knowledge sharing among public sector employees: evidence from Malaysia. International Journal of Public Sector Management, 24, 206–226.

Talent Corporation Malaysia. (2011). Malaysian at home. Retrieved March 12, 2015 from http://www.talentcorp.com.my/about-us/