Below are the five main pressures affecting the talent retention:
Five Main Pressures Affecting The Talent Retention
Pressure #1: Ignorant of Talents Mobility
Talent retention is essential for organisations, especially for small medium enterprise (SMEs) in order for their business to grow. However, attracting, recruiting, engaging, motivating and retaining talent is always hard for SMEs due to their size and lack of emphasis on staff management. A lot of SMEs prefer to ignore rather than to solve the talent retention problems. Research shows that most SMEs believed that Human Resources issues especially in talent retention would lead to higher cost, so they did not like to invest and spend more on it.
Pressure #2 Shortage of Talents in SMEs
The shortage of talent workers becomes more critical when new generations (Gen Ys) are not interested to work in SMEs. They prefer to join and work in those multinational companies (MNCs) and foreign countries which offer them higher job opportunity and welfare packages. Besides that, trained and highly skilled talents in Malaysia are now working in many parts of the world, such as in China, the Middle East, Australia, Hong Kong, Japan and even Singapore. Therefore, the SMEs is facing serious brain drain and shortage of qualified employees or talents. It has become the urgent concern and prioritised agenda for human resource professionals in most of the organisations.
Meanwhile, local and traditional businesses in SMEs who transform their business line to global market also met with shortage of talents especially those with languages ability and global working experiences. Furthermore, numerous foreign SMEs’ organisations indicated that they are having problems in investing and expending their business in Malaysia due to several market reasons such as the lacking of provision of incentives by government to support facilities development and overcome the shortage of skilled workers supply.
Pressure #3 High Turnover Rate
Turnover is another pressure contributing the impediment for SMEs growth. Despite various efforts taken by the organisation, employee’s turnover rate still remain at the critical level as reported by most of the researches and surveys. Malaysian Employers Federation (MEF) recent report shows that the average yearly employee turnover rate of executives in 2011 is 20.88%. The report also indicated that the turnover rate of Generation Y is the highest group among the workforce and it shows that the loyalty of young generation (Gen Ys) to the organisation is low. Today, job hopping becomes a norm among Gen Ys which they are mobile and capable of grabbing better position and benefits. The new generation is hard to express their loyalty to only one employer in their career.
Pressure #4 Retention of Gen Ys
In Malaysia, Gen Ys comprised of over 40% of the country’s population. As the number of Gen Ys are getting larger, the understanding of the unique and strength of them is important to integrate them successfully with other generation in the workplace. They are the new generation of workforce and it will be a new challenge for the employers in terms of new work behaviour, attitudes, and the tactic to retain them.
For instance, the motivation factors might be different from previous generation like Generation X and Baby Boomers. They are more demanding, have higher expectation and prefer the flexibility in the job. Gen Ys place importance on things to be fast and efficient with modern technology and the growing environment. Besides that, the Gen Ys generally have higher academic qualification and skill compared to previous generation. If these values are not satisfied, they will have the intention to leave the job.
Pressure #5 Compensation Forces
According to the survey done, the growing numbers of entry of Gen Ys into the labour market raised a new challenge for corporate managers who must compete with these global talented young professionals who would bring different values and expectations into the workforce. They have the intention to leave the organization easily when they did not receive any promotion and increment. Unfortunately, Malaysia is still slow in providing sufficient incentives and benefits to attract large numbers of talents to contribute to the nation especially in the SMEs. In addition, the younger workers tend to have more flextime schedules and balance their time between work, friends and family. The work life balance principles become a benchmark and conditions when searching a job. When talent wars become international, many local talents will look for better jobs opportunities around the world. Hence, this will generate a higher employee turnover rate.