The Retention Management Efforts and It’s Effectiveness from the

Viewpoint of Malaysian Banking Industry

Slides Contents:-

1. Introduction2. Study Objectives3. Theoretical Framework4. Methodology5. Sampling6. Findings7. Conclusions8. Recommendations

Retention Management (RM)

• Efforts being done by Employers in ensuring or making the Employees stay put in current workforce.

• Strategies in combating Voluntary Turnover; take away the value and organizational competitive advantage.

• Enhance organizational performance, reputation and profitability.

Introduction

Banking Employment Overview

• Due to economy liberalization & globalization, government embarked on Merger & Acquisition strategy of local commercial banks in late 90s.

• Create chaotic employment environment; resignations, redundancies, transfers, lay-offs, VSS etc: lead to countless disappointments in the eyes of banking employees.

• Another merger exercises (internal) – Finance sectors of respective banks in 2004.

Introduction

Banking Employment Overview

• Another cycle of staffing issues; employees morale were lacking as job security was diminishing.

• Currently being filled with younger generation; hyperactive, low EQ etc.

• Emergence of Islamic and Foreign banks provide more rooms to jump ship.

• Retention management – strategy to make the employees stay put in the current banking workforce.

Introduction

1. To find out the various efforts being done by Malaysian banking industry in retaining their employees;

2. How effective of such efforts in combating the organizational employees’ turnover;

3. To explore the preferred resolutions that might be put into actions, as part of the retention plan or program.

Study Objectives:-

The employees’ voluntary turnover experienced by the banking industry are being affected by job satisfaction elements and that

requires the need to install retention management efforts.

Theoretical Framework

• Employees resign from the current workforce voluntarily.

• Turnover (TO) is the rate where employers gain and lose employees.

• TO rate could be measured for individual companies or in relative to the industry as a whole.

• High TO = short employees tenure.

• Low TO = employees remain in current workforce.

Employees’ Voluntary Turnover

• High TO could harm the organization.

• Low TO could increase organization sustainability & profitability.

• Functional TO; bad performers left and good performers remain – increase productivity

• Dysfunctional TO; good performers left and bad performers remain – damage organization reputation.

Employees’ Voluntary Turnover

Job Satisfaction

• How one perceived his / her job is worth the offerings by the organization.

• Job satisfaction elements – monetary value & non-monetary support.

• Feel good – high commitment & involvement

• Feel bad – low morale & decrease enthusiasm

(develop intention to leave)

Job Satisfaction

Herzberg 2 Factors Theory

Employees are motivated by internal (motivator) rather than that are of external (hygiene) values to work.

Motivator - Recognition, Achievement, Work Challenges, Growth and Development.

Hygiene - Pay, Company Policies, Working Relations and Supervisory Skills.

In developing RM, need to consider both factors the internal and external motivators.

• Most recent strategy in addressing employee turnover issues.

• Positive efforts by organization to encourage employees long tenure.

• Resignation associated with costs; the said costs could be allocated to retention plans / programs.

• Should consider all level of staff; negative perception among employees – sweet talk.

RM Efforts

• Monetary elements is significant in inducing employees to join the organization but not the most significant element to make them to stay put.

• Should consider other non-monetary support; employee relation, career development, recognition, promotion.

• The current trend on Psychological Contract – emphasis on Flexibility.

RM Efforts

• Retaining key or skilled personnel; the most difficult effort as his KSAOs are being envied by other competing organization.

• Headhunters’ role also another challenge as they could be considered as damage agent.

• To ensure success of retention management exercise, it should be well communicated and supported by the management of the organization.

RM Efforts

• Qualitative study - structured questionnaires were distributed to Human Resource Personnel of the banks.

• There were twelve (12) questions to be answered by the respective HR Personnel.

• The questionnaires were about the respective banks demographic elements in terms of staff strength and turnover, job satisfaction and retention management practices.

Methodology

• The Distribution of Questionnaires :HR Practitioners at Banking Institutions in KL

• Number of Questionnaires Distributed = 7

• Number of Returned Questionnaires = 5

• Percentage of Returned Questionnaires = 71.43%

Sampling

Findings

Demographic

Job SatisfactionQ3. To what extend you agree that your staff feel loyal

to the organization?

Q4. To what extend you agree that your staff feel proud to tell people where they are working?

Q5. Do you agree that the working environment would influence your staff decision to leave the organization?

Q6. Your immediate superior really inspires you to remain in this organization?

Q7. Do you agree that financial benefits would influence your staff decision to remain in this organization?

Q8. To what extend you agree that your staff promotional opportunities in the future are good?

Findings

Retention Development

Q9. Does your organization currently have any retention plans? If so is it for all or selected employees only?

Findings

40%

20%

40%

Retention Plans Yes

No

No Answer

Q12. To what extend do you agree with the statement that retention plans help your organization reduce the employees’ turnover?

0% 0% 0%

60%

40%

Retention Plans Vs Turnover Strongly

DisagreeDisagree

Neutral

Agree

Strongly Agree

Retention Development

Q10. Best Retention PracticesQ11. Preferred Retention Plans

Findings

Objective 1 - To find out whether the company incorporates retention plans for employees.

Q7.

Analysis

Q7.

Q8.

Q9.Q10.

Do you agree the financial benefits would influence your staff decision to remain in this organization?Do you agree that your staff promotional opportunities in the future are good?Does your organization currently have any retention plans?What do you think are the best things about retention practices in your organization?

Q8. Q10.

Objective 2 – To explore the effectiveness of retention plans.

Q2.

Analysis

Q2.

Q3.

Q12.

Average length of employment in your organization.

To what extend you agree that your staff feel loyal to the organizations?

To what extend you agree with the statement that retention plans help your organization reduce the employees’ turnover?

Q3. Q12

Objective 3 – To recommend the preferred retention plans that might reduce employees’ turnover.

Analysis

Q11. What do you think are the best things about working in your organization?

• “Pay the employees fairly and treat them well”.

• Good compensation benefits, career development, working environment, good colleagues, promotions opportunities, respect, and flexibility would help to retain the employees.

• Plans’ execution, fair to all.

Conclusion

• Revise existing benefits

- Reimbursement tuition fees, child care centre, work-life balance and retirement benefits.

• Invest in Human Capital

- Training & Development, career progress, internal transfer – multitasking.

• Management’s commitment to the retention strategy.

- Direction & retention goals progress be monitored regularly. Should not bias.

Recommendations

END OF PRESENTATION