On the contrary, there is an incentive for employers to begin changing their compensation and benefits structures to align them with what millennials are looking for. The most essential components of compensation are salary, merit pay and bonuses, all of which are designed to attract the best employees. Such an environment requires companies and corporations to strategise their compensation structures, tailoring to the individual and catering to intrinsic and extrinsic rewards (Vizano et al., 2021). Short title and application. [9]In view of the ever-increasing presence of millennials in the workforce, employers can no longer ignore this issue: keeping millennials happy is vital for business success and continuity. This study aims to investigate the effects of work-life balance, work environment, and reward and compensation on employee retention in Malaysia. (2020) and Oduntan (2020). Start Preamble AGENCY: Office of Workers' Compensation Programs, Labor. 10, 201213. (2021). It should, therefore, come as no surprise that these millennials show great concern about the earning potential of their jobs. As a result, employers find themselves facing high levels of turnover rates in the workplace. 31, 135153. Salary increase for 2020 will grow at 5%, says Mercer. Res. Table 1 illustrates the summary of the demographic profile of the 400 respondents. 9, 876884. Int. Business Administr. The reciprocal process between employees and their existing employers is the rationale for SET and the decision on turnover intentions (Osman et al., 2016). Evid. Most employers are reluctant to provide millennials with better compensation and benefits because they see this as a cost-heavy exercise that provides them with no returns. Interpretation. Manag. 11, 314. doi: 10.3389/fpsyg.2020.00314, Tiwari, M. (2017). doi: 10.1108/EBR-11-2018-0203. (2017). Do digital literacies matter in employee engagement in digitalised workplace? In order to retain employees, organizations must also provide a supportive work environment (Kundu and Lata, 2017; Naz et al., 2020). Rev. Rai, A., Ghosh, P., and Dutta, T. (2019). Work- life balance appears to be an important component of corporate social responsibility, and results show that organizational leaders should be aware of their responsibilities to ensure that their staff are not working so hard that it interferes with their personal lives, as this may create medical concerns, and in turn affect morale, productivity, and job satisfaction. doi: 10.1108/JIC-01-2016-0016. 1, 316322. G*Power was used to determine the minimum required sample size in terms of statistical power (Faul et al., 2009). Employers that are willing to provide employees with flexible working hours are much more likely to attract the best talent, and retain them for a longer term. On the other hand, employees too need to understand how to divide their time between job and personal life. J. Soc. Available online at: https://www.asia.aonhumancapital.com/document-files/media/november-2017/radford-2017-press-release-apac.pdf (accessed September 20, 2021). Manag. Strategies for work-life balance for women in the academic profession of Sri Lanka. Esthi, R. B. Furthermore, trust in the organization's ability to reward employees for achieving their exchange commitments is connected to organizational support (Zhao et al., 2021). The time horizon for a similar research can be performed based on longitudinal studies instead of cross-sectional. Articulating the value of human resource planning (HRP) activities in augmenting organizational performance toward a sustained competitive firm. Res. A study in the relationship between supportive work environment and employee retention: role of organizational commitment and personorganization fit as mediators. Business Soc. Account. J. Intell. Hair, J. F., Risher, J. J., Sarstedt, M., and Ringle, C. M. (2019). Drawing on the approach used in previous studies for the United Kingdom and United States as well as other countries, this study examines the determinants of Flexible work arrangements and employee retention: a longitudinal analysis of the Federal Workforces. But, when the work environment is constrained and inadequate, employees will feel uneasy and perform poorly. Some important changes to Malaysias Industrial Relations Act came into force on 1 January 2021, pursuant to the Industrial Relations (Amendment) Act 2020 (the Amendment Act). doi: 10.1108/IJPPM-03-2017-0054, Zhao, D., Tian, F., Sun, X., and Zhang, D. (2021). Managerial support for development and turnover intention: roles of organizational support, work engagement and job satisfaction. doi: 10.1002/hrm.21921, Ni, G., Zhu, Y., Zhang, Z., Qiao, Y., Li, H., Xu, N., et al. Esthi (2020) pointed out that the working environment can play a significant role in influencing whether or not an employee stays with the organization. Minister may prohibit employment other than under contract of service. The art of designing an attractive compensation and benefits package for millennials is a difficult one to master. The PLS-SEM approach was adopted because the study was prediction-oriented research which aimed to predict factors that could influence the retention of employees in the service industry. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher. It starts by analyzing the Malaysian case laws which been categorized in eight dimensions namely (i) work/job (ii) transfer (iii) salary & benefits (iv) series of Bus. Int. WebPresently, the compensation issue increasingly catches the interest of academics, employers, employees, and also organizations in Malaysia. (2017). For instance, in order to retain employees, companies must understand their needs so that an effective compensation and reward system can be established to fulfill them (Oduntan, 2020). Likewise, when employees are aware that incentives or commissions are offered, they are driven to greater achievements. These benefits and opportunities will ensure employees remain in the organization, thus helping it save on the cost of hiring new employees. Business Res. There is enough empirical data to suggest that employers ought to do so, not just for the benefit of millennial employees, but for themselves, to ensure they do not fall behind in an ever-competitive labour market. J. (2018) found that supervisory support is significant in physically expressing and signaling a supportive work environment in a company. doi: 10.4102/sajems.v23i1.3028, Agha, K. (2017). 41, 113132. This study also provides vital insights to business organizations to consider designing effective employee retention plans for a successful business. SA J. Indus. Appointment of officers. Use of personality profile assessments in the US commercial construction industry. Glob. The impact of monetary, non-monetary, and mixed incentives on performance. All authors listed have made a substantial, direct, and intellectual contribution to the work and approved it for publication. Manag. Far from being masters of the art, Malaysian employers seem to be providing millennial employees with much less than what they think they deserve. Market. Another important criterion to assess the predictive capability of the model is Stone-Geisser's Q2 (Hair et al., 2017). Int. doi: 10.1017/iop.2018.5, Childs, B. R., Weidman, J. E., Farnsworth, C. B., and Christofferson, J. P. (2017). (1988). The results of cross validated redundancy indicate that the value of Q2 for employee retention is 0.594, which is considered very high to assess predictive reliance of the research model (Hair et al., 2017). The use of partial least squares structural equation modelling (PLS-SEM) in management accounting research: directions for future theory development. 69 per cent Malaysians want attractive salary and benefits and 49 per cent seek work-life balance from their ideal employer. [1]The Deloitte Millennial Survey: Big demands and high expectations (Deloitte, January 2014) accessed January 31, 2020, [2] Morrell DL and Abston KA, Millennial Motivation Issues Related to Compensation and Benefits: Suggestions for Improved Retention (2018) 50 Compensation & Benefits Review 107, [3] Millennials at Work, Reshaping the workforce (PwC, 2012) accessed January 31, 2020, [5] Department of Statistics, Malaysia (2019). Transformational leadership, employee turnover intention, and actual voluntary turnover in public organizations. The values of the effect size should be >0.02 (Cohen, 1988). Moreover, when employees perceive that organizations value their wellbeing, they engage in organizational citizenship behavior. 13, 267283. J. Sci. doi: 10.5539/ijbm.v6n3p12, Singh, D. (2019). The mediating effects of perceived job security and trust in management. Willis Towers Watson. Appl. Munir, R., and Tobi, S. N. M. (2020). It suggests that employees who are contented with their work environment are more likely to stay with an employer for a longer period of time (Baharin and Hanafi, 2018), When workers perceive that their organizations are meeting their needs in the workplace, they show extensive commitment by responding with increased enthusiasm in performing tasks and exhibiting preferred service ethics, mannerisms, behaviors, and attitudes (Kumar et al., 2018). According to Haldorai et al. Time and money will be saved in maintaining a high level of talented employees. 43, 115135. This study is greatly significant in that it offers insights into the reciprocal process of employees and organizations on employee retention in the context of the Malaysian service industry. J. Exploring the internal factors affecting job satisfaction in the fast food industry in Malaysia. WebThere are many compensation issues that the human resources department of a company can face. Employee benefits and benefits in kind (fringe benefits, perquisites, and perks) are non-wage compensations given to employees in addition to their regular pay (Boella and Goss-Turner, 2019). Population growth has dropped from an annual Int. Int. 9, 238248. 1, 111. 2A. The sample frame selected to conduct this study included service industry employees in the categories of senior management, middle management, entry level, internship, and others who, during the data collection, were aged between 20 and 50. doi: 10.20525/ijrbs.v10i7.1470, PubMed Abstract | CrossRef Full Text | Google Scholar, Adnan Bataineh, K. (2019). Such incentives should be designed to meet the requirement for employees to be appropriately compensated for their contributions, efforts, and abilities (Rai et al., 2019). Human resources must also play a key part in determining the most productive working hours for employees and make themselves more accessible, even introducing the flexible hours that are becoming more common among businesses today. Manage. Work-life balance: a portrait of Filipino migrants onshore workers in the petroleum industry of Qatar. (2017). 6, 1120. 25, 703722. (2018). The independent variables in this study are the reciprocal processes between employee and employer such as work-life balance, work environment, and reward and compensation. Business Manag. Employee retention factors in the energy sector in Klang Valley, Malaysia. 4, 110. Retaining helps human resource planning by anticipating the gap between future workforce demand and supply based on the organization's goals (Kamalaveni et al., 2019). KnE Soc. Glob. Work-Life policies assist employees to better manage their work and family lives, as well as improve attitudes and behaviors such as organizational attachment, job satisfaction, and intention to stay. Several other influencing factors could be investigated in future studies to provide a more comprehensive understanding of culturally embedded viewpoints on employee retention. [4]However, most Malaysian employers do not live up to the expectations set out by millennials. When asked about what represents the most important thing an employer can provide, most Malaysian millennials appear united in stating that attractive compensation is the most important consideration. 5. Eur. The impact of a total reward system of work engagement. Broadening and adopting retention strategies are encouraged to be used to build up organizations and keep them well-equipped to deal with issues of employees who want to leave or quit (Kadiresan et al., 2019). This procedure takes samples that are either related to or referred to by earlier samples (Taherdoost, 2016). It is recommended that compensation management be implemented in every organization in order to improve performance and retain employees. SET is an approved process of exchange that leads to relationship satisfaction linked to human connections (Shahsavarani et al., 2016). J. Organiz. The findings of this study reveal that reward and compensation is the strongest predictor of employee retention in service industry in Malaysia, thus, supporting H3. In terms of education level, the majority of respondents held a Bachelor's degree (54 %, n = 216), followed by respondents who had completed pre-university education (22.75 %, n = 91), and respondents who had completed secondary school education (11 %, n = 44). 31, 662670. Successful retention includes more than what a company does once an employee has been employed and established within the company (Kumar and Kavitha, 2018). Talent Management and Rewards Study. Reward can also be defined as a variety of one-of-a-kind advantages delivered to employees as a substitute for effort or non-trivial monetary value (Choi and Presslee, 2020). Addis Ababa: St. Mary's University, Ethiopia. 3. Impact of green human resources management practices on organizational sustainability and employee retention: an empirical study related to educational institutions. Turnover rates amongst millennial employees are at an all-time high. Nilai: INTI International University, Malaysia. According to Willis Towers Watson. Research Topics that are available in the theoretical field regarding the reciprocal process between employee and organization have become warranted in these recent years, though research that focuses on the Malaysia service industry is relatively insufficient. Proc. This study aims to examine the difficulties inherent in the tort system in Malaysia for solving medical malpractice claims and evaluates the structure of this system from the perspective of effectiveness, fairness, compensation, accessibility, and accountability. Saving of existing contracts. The results can help organizations design an effective retention plan by giving employees more opportunities to be promoted, providing more incentive plans and compensation packages, more flexible time, and supportive and positive work environments to make employees felt more appreciated. Pay for performance and GAAP 4. According to Birruntha (2019), 6.5% of the voluntary turnover attrition rate starts in the first half of the year across industries. Res. Employee retention: This construct comprises 5 items which were adapted from Jun et al. Millennials comprise 50 per cent of the nations workforce and this number is expected to rise to 75 per cent by the year 2025. Manag. Manag. Sci. The only benefits which are made mandatory under the law are contributions to the Employees Provident Fund,[6]Social Security Organisation[7]and Employment Insurance System. Sci. Employee retention strategies - an empirical research. Hirschmann, R. (2021). J. Hosp. Positive activities that assist the organization's personnel produce a favorable working environment (Diah et al., 2020). Related articles: Why Tangible Rewards Can Motivate Greater Effort Than Cash Rewards: An Analysis of Four Commonly Cited Attribute Differences. Tourism Technol. Change Manag. Start Preamble AGENCY: Office of Workers' Compensation Programs, Labor. However, the affected persons were of the view that the compensation they received was not satisfactory, even though the compensation was paid in accordance with the existing statutory framework. New technologies should also be embraced in the workplace as the younger generation (Millennials and Gen Z) are global citizens, who not only accept new technologies but also welcome them in the workplace. WebMALAYSIA The public service pension system The public sector system is funded out of general taxation, and is a non-con- tributory, DB system that pays out up to 60% of last drawn salary for civil service retirees and confers both survivorship benefits and subsidised healthcare for life. Front. Total rewards to enhance employees' intention to stay: does perception of justice play any role? Organizational creativity in the function of improving the competitive advantage of tourism companies in Bosnia and Herzegovina. Glob. Res. (2021). It has to be acknowledged that employees will have fewer health problems and absences if they are encouraged to look after themselves and find work-life balance. [11]The great disparity between what employers are prepared to offer millennial employees and what they are demanding poses a significant problem for employers: millennial employees show little hesitation in leaving their jobs as soon as a better offer is made. Employees are also likely to be more engaged in their work when an organization provides new technology and tools to improve the working environment (Feige, 2019; Chan et al., 2021). It is important to always examine workplace safety to alleviate employees' concerns. As a consequence, employees will strive to strike a mutually beneficial balance in exchange relationships and sustain a long-term positive social exchange connection at work; it holds that the purpose of human action is to maximize benefits while minimizing costs. 2, 3848. Results of assessment of structural model. Exploratory study of understanding hotel employees' perception on worklife balance issues. A recurring difficulty faced by organizations today is the problem of increased employee turnover and the retention of employees (Al-Suraihi et al., 2021). Sci. The finding was supported, and therefore aligned to that of Kamalaveni et al. Retrieved from https://www.dosm.gov.my/v1/index.php?r=column/pdfPrev&id=cTNsWU5yd291RmNiQnQvdklFNGFEZz09, [9] P Sheahan, Generation Y in Asia (2008), [10] Hom PW and others, Reviewing Employee Turnover: Focusing on Proximal Withdrawal States and an Expanded Criterion. (2012) 138 Psychological Bulletin 831, [11] Millennials at Work, Reshaping the workforce (PwC, 2012) accessed January 31, 2020, [13] Muzaffar SM, Formulating Regulative Framework on Flexible Working Hours in Malaysia (2018) 1 Malaysian Law Journal lxx, [14] Md Aminul Islam, Teh Wee Cheong, Dayang Hasliza Muhd Yusuf, Hazry Desa, A Study on Generation Y Behaviours at Workplace in Penang, [15] Queiri A, Yusoff WFW and Dwaikat N, Explaining Generation-Y Employees Turnover in Malaysian Context (2015) 11 Asian Social Science, [16] Millennials at Work, Reshaping the workforce (PwC, 2012) accessed January 31, 2020. Manage. Int. They must be technology savvy in order to have a global identity. The following items were used: My company respects every employee and make each of us feel important, I am satisfied with the rewards given for achievements attained, Rewards and compensations given by the organization motivate me to perform better, and The organization's overall compensation and reward system is fair and equitable and thus, motivates me to work harder. The Cronbach alpha coefficient was 0.86. Sci. Work-life balance is becoming increasingly important in the business world, as work interruptions into employees' time have been shown to negatively affect employees' attitudes toward their jobs. Based HRM 9, 241257. Number of people employed in the services industry in Malaysia 2015-2020. Sign in for a better website experience, Back to Employment and Industrial Relations Law Committee publications, Balamurali Tamilwanan Compensation and rewards practices in the organization have made employee retention successful (Ardiansyah et al., 2020). The process in employee retention refers to the policies and practices that businesses use to keep important employees from leaving, including taking steps to encourage employees to stay with the company for as long as feasible (Baharin and Hanafi, 2018). Our results also resonate with the rationale of SET which focuses on the reciprocal process between employees and their existing employers on employee retention. (2020); Chan et al. 6, 425431. Int. Osman, I., Noordin, F., Daud, N., and Othman, M. Z. Introduction Compensation is output and the benefit that employee receive in the form of pay, wages and also same rewards like monetary exchange for the employees to increases the Performance(Holt,1993).Compensation is the segment of transition between the employee and the owner that the outcomes employee contract. Product. The statistics gathered from various surveys conducted on Malaysian millennials paints a very bleak picture for employers. Res. 10, 697707. Econ. Business 8, 471478. Over the last decade, employee retention has become a key challenge for organizations as the demand for skilled employees has risen in businesses (Chakravarti and Chakraborty, 2020). Is this criticism justified, or are millennials just misunderstood? doi: 10.1080/14719037.2016.1257063, Taherdoost, H. (2016). B., and Al Janini, M. (2018). How do industrial relations climate and union instrumentality enhance employee performance? Therefore, we hypothesized that: H1: Work-life balance positively affects employee retention. Employees require proper growth opportunities, such as assessment, professional advancement, and positive interpersonal interactions (Diah et al., 2020). Welmilla, I. The next step in the assessment of the structural model involves hypothesis testing by reporting the direct effect using the product coefficients approach (Nitzl, 2016). Educ. It represents an important componentof total compensation Work environment: This construct comprises 5 items adapted from Siddiqi (2011) and Njuguna and Owuor (2016) using the 5-Point Likert Scale, ranging from 1 (strongly disagree) to 5 (strongly agree). SUMMARY: The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance request for comment to provide the general public and Federal agencies with an J. Acad. (2021). J. Res. The impact of transformational leadership on employees' creativity: the mediating role of perceived organizational support. Kundu, S. C., and Lata, K. (2017). Providing workers with financial and tangible benefits helps to improve productivity and employee retention. 18, 677684. Int. Work life balance of female employees in private institutions, Gwalior: an investigation. 7. The effects of entrepreneurship on the enterprises' sustainable innovation capability in the digital era: the role of organizational commitment, personorganization value fit, and perceived organizational support. This article seeks to examine, from a Malaysian perspective, what millennials look for in compensation and benefits packages and why it may be in the best interests of employers to start listening to and engaging with millennials in the workplace. Manag. Impact of work-life balance, happiness at work, on employee performance. It is more challenging than ever, as employers are often forced to give more benefits or incentive packages as people often seek positions that provide the financial security they require in difficult economic times, especially during this pandemic period. (2019). Business Soc. To develop a retention strategy that addresses employee compensation, management should be able to create a total reward structure that includes more than just compensation. The Relationship between financial and non-financial rewards on employee's job satisfaction at manufacturing industries in Malaysia. Asian J. Multidimen. In this regard, Abdelbaset et al concurs that millennials are highly motivated by tangible, extrinsic rewards, such as competitive salaries and fringe benefits and that employers who ensure their millennial employees are paid adequately will also benefit from employees who are much more fulfilled in the workplace.[15]. The challenges found are the unemployment rate increase, The 22 Most Important Issues Facing Malaysia in 2022 19 July 2022 What do our Malaysian readers really think about the current state of Malaysia and the most important issues facing the country? Fauzi, N. F. S. N. (2019). Thirteenth month (bonus) structures and expected (sometimes mandated) annual lump-sum payments. Some retention strategies that organizations can adopt to balance personal and professional lives include flexible working hours, flexible working arrangements, enough resources, opportunities for training, accurate workload, providing enough breaks during the day, authorization to take vacations, career and sabbatical leave, giving bonuses, inviting employees' families to staff gatherings, incentives for wellness and good management practices. Reward and compensation: This construct comprises 4 items adapted from Hoole and Hotz (2016) using the 5-Point Likert Scale, ranging from 1 (strongly disagree) to 5 (strongly agree). (2019). Saturday, 04 Jun 2022 10:26 AM MYT KUALA LUMPUR, June 4 Some workers in Malaysia have complained that their benefits have been or would be reduced The embedded paradox of organizational turnover and professional autonomy. In addition, based on Malaysia media reports, retention is indicated by a high turnover ratio, with up to 150,000 employees losing their jobs during the epidemic as a result of the financial crisis and lockdown (Ibrahim et al., 2021). 9, 4658. 9, 515530. Statista. Res. Two items (ER1 and WLB1) were removed due to factor loadings below 0.70. 16, 130143. WebMALAYSIA Background Demographic Changes in Malaysia Malaysia is undergoing a significant de-mographic transition. J. Oper. Int. Siddiqi, K. O. A minority group of 27 (6.75%) respondents had worked in the organization for 1620 years and another 38 (9.5%) worked for 2 years and below in their current organization. Skrine, Kuala Lumpur Business 20, 113131. Rattu, R. R., and Tielung, M. V. J. Employee retention through listening-centered communication. Environmental factors are a collection of all aspects that affect the environment where an employee is located and might have an effect on the job satisfaction of the employee (Abun et al., 2021). Influence of work environment and employee motivation on employee retention at Siloam Hospital Manado. 11, 564572. 48, 306323. Business Res. The first step is to engage millennials in the workplace and to ultimately implement changes that will be to the advantage of the modern-day workforce as a whole. The last finding of this study which is related to H2 also reveals the significant effect of work environment on employee retention in the Malaysian service industry, thus confirming those of previous studies by Hee and Rhung (2019); Ni et al. (2016). 7, 164171. doi: 10.1108/JOCM-06-2017-0232. doi: 10.6007/IJARBSS/v10-i4/7120, Marques, V. C., and Berry, G. R. (2021). Companies should set fundamental operation hours to guide employees and enable them to organize their work accordingly.