Employee turnover and retention strategies of small and midium enterprise service businesses in hanoi

Employee Turnover and Retention Strategies of Small and Medium EnterpriseService Businesses in Hanoi Summary A RESEARCH PROPOSAL PRESENTED TO THE FACULTY OF GRADUATE SCHOOL SOUTHERN LUZO

Employee Turnover and Retention Strategies of Small and Medium Enterprise

Service Businesses in Hanoi

(Summary)

A RESEARCH PROPOSAL PRESENTED TO THE FACULTY OF

GRADUATE SCHOOL SOUTHERN LUZON STATE UNIVERSITY LUCBAN, QUEZON,

PHILIPPINES THAI NGUYEN UNIVERSITY S.R VIETNAM

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE

DOCTORS IN BUSINESS ADMINISTRATION

Advisor : Prof Conrado Abraham

Name: Ngo Thi Mai English name: Susan

CHAPTER I: INTRODUCTION

1.1.Background of the study

A general idea of the sustained presence of service is very important to understand the research environment In addition to benefits such as legal and mandatory provident fund and service, here

is a list of other benefits given to employee of SMEs service businesses and enjoy the following:

Group Insurance Scheme,Personal Health Care (Regular medical check-ups), The lunch and Transportation subsidy, Credit Card businesses,Recreation, Cafeteria, ATM and Concierge facilities , Mobile Phone / Laptop, Loans, Educational Benefits,Performance based incentives, Flexi-time, Flexible Salary Benefits, The cultural exchange programs, Wedding Day Gift, Employee Referral progams, Employee Stock Option Plan

Now, the actual question, why people are leaving? What types of retention strategies are required? What is expected from HR Professional and how they can address this issue?

1.2.Statement of the problem

An important issue facing by the SMEs service is retaining employees in the organization In the context of globalization, Small and medium scale enterprises (SMEs) are losing a large number of employees, especially managers really excellent for large multinational companies

Turnover or staff turnover or labour turnover is the rate at which an employer gains and loses employees Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door" Turnover is measured for individual companies and for their service

as a whole If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same service High turnover may be harmful to a company's productivity if skilled workers are

often leaving and the worker population contains a high percentage of novice workers So that, companies often take a deep interest in their employee turnover rates because replacing workers can be a costly part of doing business When a company must replace a worker, it incurs direct and indirect expenses All of the tasks that must be performed during the process cost money, take time or do both In addition, there can be a loss of productivity during the time after the former employee leaves and the new employee has been fully trained For some companies, replacing employees also could make it difficult to retain clients or customers with whom those employees worked Normally managers view these company as public bar or just a stepping stone to climb

to prestigious MNCs They are leaving when they are being grow up in strength

How can design strategies to retain employees? Well as consideration to choose the best strategy

to be applied in employees retention This is a difficult question that many Small and Midium Enterprise Service Businesses in Hanoi are eager to find answers.

1.3 Significance of the study

Success in employee retention and attraction is very important for long term health and success

of any organization The ability to retain and keep your best employees ensurescustomer satisfaction, employees satisfied, retain institutional knowledge and learning and succession planning effectively

Do not retain a key employee is costly to any organization because in addition to the cost to recruit and select a new employee other issues such as training time and investment; lost knowledge, and possibly insecure co-workers will all have an impact on the company

Attraction and retention of staffs in particular “key employees” is one of the largest challenges for the company

The traditional approaches to attract and retention are not as effective due in part to generational change and there is a need to take a more multi dimensional approach to the issue Retaining qualified employees in a labor intensive, demanding, and fast-paced work environment is a major struggle in the hospitality service With the growth of tourism nationwide and the development of hotels, resorts, restaurants, spas and casinos, there is a limited supply of staff that are well-trained and experienced in the day-to-day operations, leaving a limited pool of qualified employees to hire So that,

Firstly, retaining qualified, high-performing employees is crucial to an organization

 Challenging hiring process: From a large pool of candidates, the HR professional screens

job applicants and carry out preliminary interviews Shortlisted candidates are then forwarded to managers who make further judgments to ensure that the most appropriate candidates are hired Hiring the right candidates normally requires lots of time

 Costly orientation and training: As an individual starts a new job, he is often given

orientation which informs him about organization goals, culture and background Also, training is provided to help new employee have necessary skills to perform his work When an individual suddenly leaves an organization, it would cause wastage of time and money The HR department would be required to start all over again the recruiting process for vacancies as well as conduct other orientations and training Searching for appropriate staff is a tedious task and it is a huge waste of effort when an employee quits

 High possibility of resigned worker joining competitors: When this happen, employees may

bring strategies, policies from their current company to the new one Many secrets of previous organization may be revealed in case of leaking out essential data, document, and statistics Companies can limit such cases by requiring new joiners sign a document promising not to divulge any information as they leave Another effective way to retain employees is to implement strict policies to prevent people from joining competitors

 Better performance of long-term employees: Compared to workers who change jobs often,

people who work for a long period have more experience in working for the company because they understand its rules and policies as well as its culture Therefore they can perform their duties much better

 Time for individual adjustment with others : Normally time is required to let people know

and get on well with each other An employee will understand his workmates better if they work together for longer time therefore the productivity will be enhanced Adjustment problems occur as someone is replaced for an existing staff Others tend to find it difficult to make a comfort level with the new comer Moreover, after establishing a certain relationship with the old staff, they face

a challenge in adjusting with the new one and especially trusting him It is common that people compare a new person with the previous employee and always discover his faults

 Loyalty from long-term individuals: As someone sticks to an organization for a long time, he

normally receives more benefits and incentives thereby forming a favor toward the management

Necessity in retaining qualified and experienced employees: High-performing employees are

important to every company as they can bring their creativity, difference, boost the productivity and help in achieving better outcome for the organization Organizations will definitely struggle without these top performers therefore it is essential to keep them staying happy and not looking for changes The management needs to value those who can bring real benefits to companies and make special effort to retain as well as encourage them

Secondly, Retention is a big challenge

Considerable changes are occurring in the labor market and offices which lead to altering the way company link to its workers Selecting, recruiting and retaining knowledgeable staffs have become

a serious concern to any organization and business To become leading player in an industry, it is essential for companies to meet their people’s needs by understanding them and applying appropriate strategies

Robust economic growth, changes in people mind about entering a profession, corporate retreats, young workforce, and life balance have led to a fierce battle for skilled employees At the same time, people have different views about working They tend to be more family oriented, pay more attention to living standard and job status

To retain people and attract new talents, it is important that managers learn the reasons for fluctuations in labor market and be able to determine what their people want to fulfill their needs There are harsh competitions between companies for scare talented workers

Inside communication is a tool to make employees understand about their own working place, feel good about it and perceive equity

CHAPTER II: REVIEW OF RELATED LITERATURE AND STUDIES

2.1 Literature Review

2.1.1 Employee turnover

There are many a necessity to better understand the staff turnover reasons in order to become capable to tackle their damaging consequences, concrete:

Types of staff turnover , Reasons for employee turnover , Consequences of employee turnover , Employee Turnover in Project Context

2.1.2 Employee retetation strategies

Retention Factors for all Employees

Skill recognition, Learning & Working Climate, Job Flexibility, Cost Effectiveness,Training, Benefits , Career Development, Superior-Subordinate Relationship, Compensation , Organizational Commitment, Communication , Employee Motivation:

2.2 Theoretical and conceptual framework

+) How to construct theoretical framework

With a lot of equity theory outlined above, I choose Adam's Equity Theory theory application in the workplace

The Equity Theory in the Workplace

Adam's Equity Theory holds that worker motivation is influenced by employees' perception of the existence of fair treatment in the workplace This typically consists of such factors as fairness in the selection of employees, evaluation of performance and distribution of rewards and compensation The use of equity theory in the workplace allows managers to examine worker

relationships and manage employees in a fair and equitable manner that encourages productivity

Exhibit 1.1 Adam' Equity Theory

Inheritance above studies, we can see: there are many employee retention strategies are available

in the SMEs service businesses, special in the SMEs service businesses in Hanoi In my researcher is focused interested in three retention strategies and its applicability in the service I have classified three strategies according to the solution provided

1 Exclusive organizational structure strategy

2 Mobile benefit strategy

3 Inside communication strategy

Chapter 3 METHODOLOGY

3.1 Resaerch Design

3.1.1.Research objectives

1 To study the influence of exclusive organisational structual on retention

2 How exclusive organisational structure can help in dealing with employee attrition?

3 To determine whether increase in retention can be caused by mobile benefit structure

4 How mobile benefit structure can help in dealing with employee attrition?

5 How an Inside communication strategy can be carried out in the organization?

3.1.2.Research question

1 To learn company structure is related with employee showing for staying the company.

2 The proportion of employee attrition can be tackled by applying exclusive organizational

structure

3 To determine the relationship between employees’ decision to stay with company and

employee's benefit on variable benefit is related to employee trust for staying the company

4 The proportion of employee attrition can be tackled by applying mobile benefit structure.

5 What is the comment of employee on the success of carry of Inside communication

strategy in SMEs service businesses in Hanoi?

3.5 Procedure

The data collected through questionnaire and the records available was examined in detail It was further classified and tabulated with the help of Microsoft excel and SPSS service

Statistical tools

Chi-square test and Sign test are used for testing the hypothesis

CHAPTER IV RESULTS AND DICUSSION

4.1 Results

Table No 4.6 :Table for Exclusive organization struture strategy

Observed

Data

Preference for staying the company

R etention Indifferent Attrition Total Job title

Employees who value job titles 32 40 184 256

Employees who do not 72 32 40 144

Expected

data Employees who value job titles 66,56 46,08 143,36

Employees who do not 37,44 25,92 80,64

P value = 5,53366E-19

P value = 5,53366E-19  0.05 =   H0a:has been rejected H1a is being accepted

Conclusion

From the above test we can conclude that the Exclusive organizational structure is dependent to retention of the employee

+) In the total sample population 400 have 224 respondents attrition and Among 224 respondents there are 184 respondents, who are employees who prefer job title So 184 as a percentage of total sample population (400) is 46 percents Therefore, the Exclusive organization structure strategy can be apply to 46 percents of the population, this will increase the retention of the employees in the SMEs service businesses in Ha Noi

Table 4.7: Table for Mobile benefit strategy

Pvalue = 1,31E-19  0.05 =   H0b:has been rejected H1b is being accepted

Conclusion

From the above test we can conclude that Mobile benefit structure is dependent to retention of the employee

+) In the total sample population 400 have 224 respondents attrition Among those 224 respondents, there are only 40 respondents preferring frequent adjustment in benefits, making 10%

Observed

Mobile

Benefit structure

Preference for staying the company

Retention Indifferent Attrition Employees who value mobile benefit structure 72 32 40 144

Employees who don’t value mobile benefit

Expected

data Employees who value mobile benefit structure 37,44 46,08 80,64

Employees who don’t value mobile benefit

in total Therefore, the Mobile benefit strategy can solve only 10 percents, this will increase the retention of the employees in SMEs service in Hanoi The strategy is not successful in handling the problem of attrition

Table 4.8 : Table for Inside communication strategy

Total plus

sign

Total minus sign

Total sign (n)



Conclusion

From the above test we can conclude that the opinion of SMEs service businesses employees are not favorable for the implementation of Inside communication strategy

Chapter 5: SUMMARY, CONLUSIONS AND RECOMMENDATIONS

5.1 Summary

5.1.1 From the research on Exclusive organizational structure strategy

+) In the SMEs service businesses in Hanoi where have 56 percents attrition and in which have

about 82 percents (184/224) is giving up the company to improve their status All other reasons are only 18 percents(40/224)