Retaining Best Employee in Globalization Era: Empirical Study from Measuring Employer Attractiveness in PT Pertamina (Persero)

Suci Marliani and Eko Sakapurnama (Faculty of Administrative Sciences, Universitas Indonesia)

eko.sakapurnama@ui.ac.id

In the era of war for talent, attracting and retaining the talented people become necessary to gain organization’s competitive advantage. Nowadays, human capital become more important when disruptive innovation occured due to the sophisticated digitalisation. So, retaining best employees that have competences which aligned with the company is a must. This study aims to analyze the influence of employer attractiveness toward retention permanent employees in Human Resource Directorate of PT Pertamina (Persero). There are five dimensions that create employee attractiveness. This research attempt to measure those five dimensions of employer attractiveness which are development value, social value, interest value, applicant value and economic value. Moreover, it also analyse how those dimensions imply the retention of permanent employee. The method of the research is quantitative through survey to 48 permanent employees in HR Directorate of PT Pertamina (Persero). The result indicates that employer attractiveness has a significant influence on employee retention.

Keywords : Employer attractiveness, Retention, Human Resource Management, Globalization

Background of Study

Recently in the beginning of 21st century, the war for talent become an issue in the field of human capital management. A term of war for talent coined by Steven Haskin in 1997 from McKinsey Consulting that perceived organization is facing new competition era due to globalization and also the massive development of information systems. The war for talent refers to an increasingly competitive landscape for recruiting and retaining talented employees which describe is not a set of superior human resources processes, but a mindset that emphasizes the importance of talent to the success of organizations (Michaels, et.al, 2001, Axelrod, et.al, 2001; Bhattacharya, 2009) .

Nowadays, in the era of industry 4.0, retaining best employee is a necessary for organization. According to Lorenz, et.al (2015), in the 19th century when it called industrial production was transformed by steam power, continued by electricity in the early twentieth century, and automation in the 1970s. These shifts of technological advancement did not reduce overall employment, however. Thus, eventhough the number of manufacturing jobs decreased, new jobs emerged and the demand for new skills grew recently. Today, another workforce

transformation is on the horizon as manufacturing experiences a fourth wave of technological advancement: the rise of new digital industrial technologies that are collectively known as Industry 4.0. The importance to attract best talented people is echoing by some scholars. The role of Human Resource (HR) is shifting to Human Capital (HC) whereas this field is responsible in developing policies, practices and systems to attract, retain and develop employees as part of a corporate strategy to maintain its competitive advantage (Holland, Sheehan, De Cieri 2007., Hiltrop 1999).

One of strategy to attract best people is conducting employer branding. Employer branding a firm's efforts to promote, both within and outside the firm, a clear view of what makes it different and desirable as an employer (Backhauss and Tikko, 2004). Through employer branding, organization can retain their best talent in order to engage within organization (Armstrong, 2006; Backhauss and Tikko, 2004, Michaels, 2001). Moreover, organization culture also contribute in enhancing organizational citizenship behavior that create engagement (Trisia & Sakapurnama, 2016).

By 2015, Indonesia entered a new emerging community called Asean Economic Community (AEC). One of the collaboration that mostly impact in employment is the freeer of movement in human capital within South East Asian Countries (Sakapurnama, 2015). Thus, this could be challenge amongst companies in retaining their best talent (Halakoo, 2015; Tobing, 2017, Hoang, et.al., 2016). In Indonesia, PT Pertamina (Persero) is a state-owned enterprise which operates oil and refinery industry, already perform employer branding to keep their best employees. According to Evita Maryati Tagor, Human Capital Director, PT Pertamina (Persero), the company enhanced their employee in order to win the global competition. PT Pertamina (Persero) try to attract young talent in a needed position, retain their generation Y employees who have 5-10 years work duration and deploy them through learning and and job rotation (portalhr.com, 2013). This strategy is aligned with the recent survey that conducted by Human Resources Bureau, Ministry of Finance, Republik of Indonesia regarding job preferences of young talent in Indonesia (see picture 1). The research conducted to college student in 25 unversities in Indonesia, and asking whether after graduate, which companies is the most intriguing to vacant.

Picture 1. Talent Job Preferences in IndonesiaSource: Human Resources Bureau, Ministry of Finance (2013)

Referring to picture 1, PT Pertamina (Persero) became the most admired companies that chosen by 774 students followed by Ministry of Finance, chosen by 514 students, and the third is PT Perusahaan Listrik Negara (PLN) chosen by 404 students respectively.

Based on this phenomena, this research is try to analyse the influence of employee attractiveness toward employee retention of permanent employees within Human Capital Directorate PT Pertamina (Persero).

Literature ReviewThis research derived from recent research that purpose to seek the influence of employer branding to retention. Most scholar using term “employer branding” rather than” employer attractiveness. The result are employer branding has a significant influence in retain employee (Sokro, 2012; Suikanen, 2010), employer branding also decreasing involuntary turnover (Wulandari and Marganty, 2012). Moreover, Saini, et.al (2013) emphasis that employer branding may influence intention to apply. In this study, researcher using employer attractiveness as an attributes of employer branding (Berthon, 2005). Employer attractiveness is defined as the envisioned benefits that a potential employee sees in working for a specific organization. It constitutes an important concept in knowledge-intensive contexts where attracting employees with superior skills and knowledge comprises a primary source of competitive advantage.

Berthon (2005) explained that, there are five categories of employer attractiveness which are: development value, social value, interest value, application value and economic value. The characteristic of those categories write in the table 1.

Table 1. Employee Attractiveness Categories

Category CharacteristicsDevelopment value Recognition/appreciation from management

A great start for future employment Feeling good about yourself as a result of working for a

particular organisation Feeling more self-confident as a result of working for a

particular organisation Gaining career-enhancing experience

Social value A fun working environment Having a good relationship with your superiors Having a good relationship with your colleagues Supportive and encouraging colleagues Happy work environment

Interest value Working in an exciting environment Innovative employer – novel work practices/forward-

thinking The organisation both values and makes use of your

creativity The organisation produces high-quality products and

services The organisation produces innovative products and

servicesApplication value Humanitarian organisation – gives back to society

Opportunity to apply what was learned at a tertiary institution

Opportunity to teach others what you have learned Acceptance and belonging The organisation is customer-orientated

Economic value Good promotion opportunities within the organisation Job security within the organisation Hands-on inter-departmental experience An above average basic salary An attractive overall compensation package

Source: Berthon (2005) Another variable to be analyse is retention, as a dependent variable. Retention is the management effort to retain their best employees in order to attain organizational goals (Mathis and Jackson, 2006). There are some factors that determined the employee retention, which are: (1) Organizational Component, consist of corporate values and culture, corporate strategy, continuity and job security; (2) Career Opportunity, employees will remain work in the company, when they perceived clarity of their career enhancement through training and

development, coaching, career planning; (3) Esteem that represented by salary, incentives, bonus; (4) Working Condition and Job Description that reflected by flexible working hours, clarity of function, job autonomy and responsibility and also work-life balance; and (5) Job Relation, how employer treat fairly, fully supported by management, work-relation between leader and subordinates. The relation between those variables describe as below:

Picture 2. Relationship Between Variables

Source: researcher (2017)

Methodology This research has positivism approach and using quantitative method in collecting data. Researcher using questionaire as an instrument to gather data. The sample of the population is purposive sampling which the criterion are: (1) permanent employees within Human Capital Directorate PT Pertamina (Persero), (2) The work tenure is more than five years. Based on sampling technique above, from 130 permanent employees in HR Directorate, only 68 employee that eligible to be a respondent of this research.

Results and Discussion

From the data collected, the researcher conducted pre-test analyses toward instrument to check the reliability and validity of the questionaire. Using cronbach alpha to evaluate the internal reliability, whether its reliability, the alpha cronbach’s score must more than 0,6 by calculation using SPSS 17.0 program, all the items are reliable. Another measurement to evaluate the validity of the questionaire is inter-item correlation to check the validity, the result for both variables are shown in the table 2 and table 3.

Table 2

Dependent Variable

Retention

Independent Variable

Employer Attractiveness

Pre-test Validity of Employer Attractiveness

Indicator Person Correlation

R Score

Valid/Not Valid

Have an appreciation from managerial toward performance

.752** .4438 Valid

Working in PT Pertamina is an excellent job for my future

.958** .4438 Valid

I feel better when work in PT Pertamina .957** .4438 ValidI feel more confidence when work in PT Pertamina

.958** .4438 Valid

I believe I can get good experience in enhancing my career

.556** .4438 Valid

The work environment in PT Pertamina is fun

.894** .4438 Valid

I have good relationship with my boss .866** .4438 ValidI can build team work with my co-working

.903** .4438 Valid

My team work can motivate to perform better

.807** .4438 Valid

The work environment is joyful .914** .4438 ValidThe work environment is attracted .934** .4438 ValidFor me, PT Pertamina is an inovative company

.919** .4438 Valid

For me, PT Pertamina encourage my creativity

.903** .4438 Valid

PT Pertamina produce excellent both customer service and product

.923** .4438 Valid

PT Pertamina encourage both customer service and product inovativeness

.934** .4438 Valid

The company gives opportunity to share my knowledge to broader society

.918** .4438 Valid

The company gives opportunity to apply my knowledge to broader society

.922** .4438 Valid

The company gives opportunity to share my knowledge to others team

.881** .4438 Valid

I feel I have belongingness when working in PT Pertamina

.798** .4438 Valid

PT Pertamina is a customer oriented company

.828** .4438 Valid

Career promotion is openly wide to the employee

.904** .4438 Valid

There are job security in PT Pertamina .763** .4438 ValidPT Pertamina gives new work experiences when work inter department.

.600** .4438 Valid

My basic salary is above average .824** .4438 ValidThe compensation package is intriguing .810** .4438 ValidSource: Researcher (2014)

Tabel 3

Pre-test Validity of Retention

Indicators Person Correlation

R Score

Valid/Not Valid

PT Pertamina’s value and corporate culture is aligned with me

.757** .4438 Valid

PT Pertamina establishing clear goals and strategy

.821** .4438 Valid

PT Pertamina has an excellent job security .795** .4438 ValidPT Pertamina provide training program for employee development

.876** .4438 Valid

PT Pertamina conduct mentoring for self advancement

.943** .4438 Valid

PT Pertamina conduct employee career planning

.915** .4438 Valid

Salary and benefit based on performanced .904** .4438 ValidAchievement gave fairly to all employees .805** .4438 ValidSupervisor give recognition upon employee’s performance

.849** .4438 Valid

Fringe benefits are meet satisfaction .857** .4438 ValidThe company distribute clear responsible to all employees

.815** .4438 Valid

In PT Pertamina, employees may work flexible in terms of time and work loacation

.905** .4438 Valid

The company value work balance between duty and daily life

.815** .4438 Valid

Supervisor has treated fairly .900** .4438 ValidManagerial gives support to the employees

.894** .4438 Valid

Relationship among employees is excellent

.729** .4438 Valid

Source: Researcher (2014)

Characteristic of Respondents

From the population of 310 permanent employees in Human Capital Directorate PT Pertamina, only 68 persons that eligible for this research. However, only 48 employees that become primary data. By categorizing sex, mostly respondent are female that accounted 30 person (63%), and the rests are male which are 18 person (37%). Based on age, there are 46 % above 40 years old, and 54 % between 25-40 years old. Furthermore, the educational background of respondents mostly hold Bachelor Degree (75%), followed by Master degree (15%) and Diplome degree (8%). Only 2 % of respondent or 1 person that graduated from high school.

Pria38%

Wanita63%

Sex of Respondents

Pria Wanita

2% 8%

75%

15%

Educational Background

SLTADIPLOMAS1S2

Picture 3. Characteristic of RespondentsSource: primary data (2014)

The results of the analysis each dimensions of the variables then measure the influence of employer attractiveness toward retention using linear regression. According to Berthon (2005), there are five dimensions that will be explain on the passage below.

The first dimension is development value that define as the extent to which an individual's interest in an employer branding company provides recognition, confidence and self-esteem for the work performed by the employee. The frequency of this dimension shown on table 4.

Table 4 Distribution Frequency of Dimension of Development ValueNo Item Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. Have an appreciation from

managerial toward performance

0(0%)

0(0%)

5(10,4%)

33(68,8%)

10(20,8%)

2. Working in PT Pertamina is an excellent job for my future

0(0%)

0(0%)

5(10,4%)

28(58,3%)

15(31,3%)

3. I feel better when work in 0 0 6 26 16

54%

46%

Age of Respondents

25-40 Tahun >40 Tahun

31%

69%

Work Tenure

5-10 Tahun>10 Tahun

PT Pertamina (0%) (0%) (12,5%) (54,2%) (33,3%)4. I feel more confidence when

work in PT Pertamina0

(0%)0

(0%)5

(10,4%)23

(47,9%)20

(41,7%)5. I believe I can get good

experience in enhancing my career

0(0%)

0(0%)

6(12,5%)

21(64,6%)

11(22,9%)

Source: primary data (2014)

The second dimension is social value which means an assessment of the extent to which an individual's interest in an employer branding company has a pleasant working environment and provides a good co-worker relationship and a comfortable team atmosphere, which the result describes on the table 5.

Table 5 Distribution Frequency of Dimension of Social ValueNo Items Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. The work environment in

PT Pertamina is fun0

(0%)

0

(0%)

9

(18,8%

)

27

(56,3%)

12

(25,0%)

2. I have good relationship with my boss

0

(0%)

1

(2,1%)

3

(33,3%

)

33

(68,8%)

11

(22,9%)

3. I can build team work with my co-working

0

(0%)

0

(0%)

4

(8,3%)

34

(70,8%)

10

(20,8%)

4. My team work can motivate to perform better

0

(0%)

0

(0%)

4

(8,3%)

38

(79,2%)

6

(12,5%)

5. The work environment is joyful

0

(0%)

0

(0%)

8

(16,7%

)

29

(60,4%)

11

(22,9%)

Source: primary data (2014)

The third dimension is interest value is assessing the extent to which an individual's interest in an employer branding company has a pleasant working environment, relatively new ways of working, and providing job training to employees that make their creativity increase in producing high-quality and innovative goods and services. The data on this dimension shown on table 5.

Table 5 Distribution Frequency of Dimension of Interest ValueNo Items Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. The work environment is 0 0 6 34 8

attracted

(0%) (0%) (12,5%

)

(70,8%)

(16,7%)

2. For me, PT Pertamina is an inovative company

0

(0%)

3

(6,3%)

7

(14,6%

)

23

(47,9%)

15

(31,3%)

3. For me, PT Pertamina encourage my creativity

0

(0%)

2

(4,2%)

12

(25,0%

)

26

(54,2%)

8

(16,7%)

4. PT Pertamina produce excellent both customer service and product

0

(0%)

0

(0%)

5

(10,4%

)

27

(56,3%)

16

(33,3%)

5. PT Pertamina encourage both customer service and product inovativeness

0

(0%)

2

(4,2%)

10

(20,8%

)

22

(45,8%)

14

(29,2%)

Source: primary data (2014)

The forth dimension is applicant value that define as a perception which an individual's interest in an employer branding company gives employees the opportunity to apply what they have learned and share their knowledge with others. The data on this dimension shown on table 6.

Table 6 Distribution Frequency of Dimension of Applicant ValueNo Items Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. The company gives

opportunity to share my knowledge to broader society

0

(0%)

2

(4,2%)

7

(14,6%

)

32

(66,7%)

7

(14,6%)

2. The company gives opportunity to apply my knowledge to broader society

0

(0%)

1

(2,1%)

8

(16,7%

)

33

(68,8%)

6

(12,5%)

3. The company gives opportunity to share my knowledge to others team

0

(0%)

1

(2,1%)

10

(20,8%

)

32

(66,7%)

5

(10,4%)

4. I feel I have belongingness when working in PT

0 0 5 30 13

Pertamina (0%) (0%) (10,4%

)

(62,5%) (27,1%)

5. PT Pertamina is a customer oriented company

0

(0%)

2

(4,2%)

11

(22,9%

)

13

(47,9%)

12

(25,0%)

Source: primary data (2014)

And the last dimension is economic value which means assessing the extent to which an individual's interest in an employer branding company offers above average salaries, attractive compensation and benefits packages, job security or job security and excellent promotional opportunities in careers. The data on this dimension shown on table 7.

Table 7 Distribution Frequency of Dimension of Economic ValueNo Items Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. Career promotion is openly

wide to the employee0

(0%)

1

(2,1%)

14

(29,52)

22

(45,8%)

11

(22,9%)

2. There are job security in PT Pertamina

0

(0%)

0

(0%)

4

(8,3%)

28

(58,3%)

16

(33,3%)

3. PT Pertamina gives new work experiences when work inter department.

0

(0%)

1

(2,1%)

11

(22,9%

)

30

(62,5%)

6

(12,5%)

4. My basic salary is above average

0

(0%)

2

(4,2%)

9

(18,8%

)

25

(52,1%)

12

(25,0%)

5. The compensation package is intriguing

0

(0%)

1

(2,1%)

8

(16,7%

)

27

(56,3%)

12

(25,0%)

Source: primary data (2014)

Then, the descriptive statistic of dependent variable which is retention is explained into five

dimensions as well which are: (1) organizational components; (2) career opportunities; (3) esteem; (4) Job Description, and (5) Job Relationship (Mathis and Jackson, 2006). From the data gathered, the organizational components is shown on the table 8.

Table 8 Distribution Frequency of Dimension of Organizational ComponentNo Items Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. PT Pertamina’s value and

corporate culture is aligned with me

0

(0%)

1

(2,1%)

13

(27,1%

)

31

(64,6%)

3

(6,3%)

2. PT Pertamina establishing clear goals and strategy

0

(0%)

1

(2,1%)

5

(10,4%

)

34

(70,8%)

8

(16,7%)

3. PT Pertamina has an excellent job security

0

(0%)

0

(0%)

2

(4,2%)

35

(72,9%)

11

(22,9%)

Source: primary data (2014)

The second dimension of retention is career opportunities which shown in table 9 below:

Table 9 Distribution Frequency of Dimension of Career OpportunitiesNo Items Strongly

DisagreeDisagree Neutral Agree Strongly

Agree1. PT Pertamina provide

training program for employee development

0

(0%)

1

(2,1%)

10

(20,8%

)

27

(56,3%)

10

(20,8%)

2. PT Pertamina conduct mentoring for self advancement

0

(0%)

0

(0%)

15

(31,3%

)

23

(47,9%)

10

(20,8%)

3. PT Pertamina conduct employee career planning

0

(0%)

4

(8,3%)

10

(20,8%

)

27

(56,3%)

7

(14,6%)

Source: primary data (2014)

The third dimension of retention is esteem which shown in table 10 below:

Table 10 Distribution Frequency of Dimension of Esteem

No Items Strongly Disagree

Disagree Neutral Agree Strongly Agree

1. Salary and benefit based on performanced

0

(0%)

0

(0%)

10

(20,8%)

28

(58,3%)

10

(20,8%)

2. Achievement gave fairly to all employees

0

(0%)

0

(0%)

5

(10,4%)

35

(72,9%)

8

(16,7%)

3. Supervisor give recognition upon employee’s performance

0

(0%)

0

(0%)

9

(18,8%)

35

(72,9%)

4

(8,3%)

4. Fringe benefits are meet satisfaction

0

(0%)

0

(0%)

4

(8,3%)

30

(62,5%)

14

(29,2%)

Source: primary data (2014)

The forth dimension of retention is job description which shown in table 11 below:Table 11 Distribution Frequency of Dimension of Job Description

No Items Strongly Disagre

e

Disagree Neutral Agree Strongly Agree

1. The company distribute clear responsible to all employees

0

(0%)

2

(4,2%)

14

(29,2%)

27

(56,3%)

5

(10,4%)

2. In PT Pertamina, employees may work flexible in terms of time and work loacation

0

(0%)

11

(22,9%)

6

(12,5%)

27

(56,3%)

4

(8,3%)

3. The company value work balance between duty and daily life

0

(0%)

3

(6,3%)

9

(18,8%)

33

(68,8%)

3

(6,3%)

Source: primary data (2014)

The last one is job relationship which shown in table 12 below:Table 12 Distribution Frequency of Dimension of Job Relationship

No Items Strongly Disagree

Disagree Neutral Agree Strongly Agree

1. Supervisor has treated fairly 0

(0%)

1

(2,1%)

17

(35,4%

)

28

(58,3%)

2

(4,2%)

2. Managerial gives support to the employees

0

(0%)

0

(0%)

10

(20,8%

)

35

(72,9%)

3

(6,3%)

3. Relationship among employees is excellent

0

(0%)

0

(0%)

2

(4,2%)

40

(83,3%)

6

(12,5%)

Source: primary data (2014)

To analyse the relationship between employer attractiveness and retention, researcher using regression linear and pearson correlation test using SPSS 17.0. Thus the Pearson Correlation between those variables are very strong, where the score is 0.874.

Correlations

EmployerBrandin

g

RetensiKaryawa

n

EmployerBranding Pearson Correlation 1 .874**

Sig. (2-tailed) .000

N 48 48

RetensiKaryawan Pearson Correlation .874** 1

Sig. (2-tailed) .000

N 48 48

**. Correlation is significant at the 0.01 level (2-tailed).

Another calculation to seek whether the employer attractiveness has influence toward retention conducted using regression linear, and R square is 0,764, with the adjusted R square is 0,759. This score means that 75,9% of retention is determined by employer attractiveness in Human Capital Directorate PT Pertamina (Persero). The rest of 24,1% is influenced by other variables.

Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .874a .764 .759 3.46100

a. Predictors: (Constant), EmployerBranding

b. Dependent Variable: RetensiKaryawan

In order to check the hypothesis, researcher using ANOVA calculation, there are positive influence between employer attractiveness toward retention in Human Capital Directorate PT Pertamina (Persero).

ANOVAb

Model Sum of Squares Df Mean Square F Sig.

1 Regression 1783.300 1 1783.300 148.874 .000a

Residual 551.013 46 11.979

Total 2334.313 47

a. Predictors: (Constant), EmployerBranding

b. Dependent Variable: RetensiKaryawan

ConclusionThe result of this research is there are positive strong relationship between two variables and the employee attractiveness influence toward retention in Human Capital Directorate PT Pertamina (Persero).

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