Employee Turnover

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EMPLOYEE TURNOVER: BAD ATTITUDE OR POOR MANAGEMENT?

NARESH KHATRI Assistant Professor Nanyang Business School Nanyang Technological University Mail Box: S3-B2-C-82 Singapore 639798 Phone: (65) 790-5679 Fax: (65) 791-3697 E-mail: ankhatri@ntu.edu.sg

PAWAN BUDHWAR Lecturer Cardiff Business School Cardiff University Aberconway Building Colum Drive Cardiff, CF1 3EU E-mail: budhwar@cardiff.ac.uk

CHONG TZE FERN Nanyang Business School Nanyang Technological University Singapore 639798 E-mail: p7515495z@ntu.edu.sg

EMPLOYEE TURNOVER: BAD ATTITUDE OR POOR MANAGEMENT?

Abstract

Employee turnover is giving sleepless nights to human resource managers in many countries in Asia. A widely-held belief in these countries is that employees have developed bad attitudes due to labor shortage. Employees are believed to job-hop for no reason or even for fun. Unfortunately, despite employee turnover being such a serious problem in Asia, there is dearth of studies investigating it; especially studies using a comprehensive set of causal variables are rare. In this study, we examined three sets of antecedents of turnover intention in companies in Singapore: demographic, controllable, and uncontrollable. Singapore companies provide an appropriate setting as their turnover rates are among the highest in Asia. Findings of the study suggest that the extent of controllable turnover is much greater than uncontrollable turnover and that poor management practices are the major source of employee turnover.

EMPLOYEE TURNOVER: BAD ATTITUDE OR POOR MANAGEMENT? Voluntary turnover is a major problem for companies in many Asian countries such as Hong Kong, South Korea, Malaysia, Singapore, and Taiwan (Barnett, 1995; Chang, 1996; Syrett, 1994). For example, in 1995 (the last year for which comparative data were available), the average monthly resignation rates were 3.4%, 2.9%, and 2.7% in Singapore, South Korea, and Taiwan, respectively (Barnard & Rodgers, 1998). In a recent forum of the human resource professional bodies of Hong Kong, Malaysia, and Singapore in Malaysia, participants were unanimous in their view that job-hopping had become so rampant in these countries that it had become a culture (Asia Pacific Management News, 1997). Similarly, employee turnover is very prevalent in China as well (Adweek, 1993; MacLachlan, 1996).

In Singapore, reports in popular press highlighting the costs and disruptions associated with job-hopping continue unabated, and companies continue to call for help with this pressing issue1. The extent of the problem can be gauged from the fact that the issue of job-hopping was brought up in the country’s parliament. In fact, there is a deep concern at the national level that job-hopping is adversely affecting Singapore’s competitiveness (Chang, 1996; The Straits Times, 1996). Foreign investors, particularly manufacturers, are concerned about the frequency of job-hopping (Asian Finance, 1988; The Straits Times, 1996).

The average annual turnover data for selected industries and occupations in Singapore are presented in Table 1. Although employee turnover rates show marginal declines from 1995 to 1997, they are at alarmingly high levels. For example, the Singapore hotel industry had an average annual turnover rate of 57.6% in 1997 with some hotels reporting three-digit annual turnover rates. Similarly, the average annual turnover rates in the retail industry have fluctuated between 74.4% and 80.4% over the three-year period between 1995 and 1997. Cheng and Brown (1998) reported employee turnover ranging from 48 to 120 per cent in the Singapore hotel industry.

1

The recent economic crisis has had only marginal impact on employee turnover as the resignation rates for the third quarter of 1998 published by the Ministry of Manpower (Singapore) show. The data are contrary to the popular belief in Singapore that employee turnover has declined greatly since the onset of the economic crisis. A Member of...
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