Factors of employee retention: A case study of Pakistan Foam Industry

1-Malik Muhammad Shafiq, 2- Tahir Muqsood, 4- Muhammad Shafaat Rasool, 4- Mohammad Akram Naseem

Abstract
The basic objective of this study is to identify the main factors of employee retention in Foam industry of Pakistan and also impact of variables like (career prospects, job security, employer attitude and working enviornment) on employee retention. This study is based on primary data, which collected from 81 employees of five leading Foam Companies of Pakistan. For this purpose we self designed questionnaire was used for data collection. The data was analyzed using the techniques of correlation coefficient and regression analysis. Cronach-Alpha reliability is 78% ,86%, 74%and 74% respectively career prospects, job security, employer attitude and working g environment . The following are the reasons (career development, job security, working conditions and employer attitude) for which employee wants to stay in Foam industry Pakistan. The 61.2% respondent want to spending their career with their company, which shows that main factor of employee retention, is career prospects and second factor of employee retention is job security. The p-values of four factors of employee retention is less than .05, so rejected the statement of hypothesis (H0) and accepted H1.There is positive impacts and relationship between employee retention and career prospectus, job security, working enviornment & employer attitude. These results are consistent with prior empirical study.

Keywords: Employee retention, career prospectus, job security, enviornment working, HRM
and Pakistan Foam Industry Field Research: Human Resource Management

Introduction
Foam industry in Pakistan is one of the most booming industry in Pakistan. Foam industry is the 7th largest export earning sector in Pakistan. The Pakistan foam industry is expected to generate .010 million jobs by the year 2010. Ironically, in spite of the tremendous growth potential of the sector, attrition rate and the manpower crisis is dampening the growth of the sector. The human resource professionals of the foam industry are facing various challenges like the attrition rates and its implications, skill shortages, retaining the employees etc. The sources of recruitment used by the foam companies are advertisements, employee referrals, outsourcing and walk-ins.The Pakistan Foam industry, which established itself as the low-cost About Authors1- MBA, the university of Lahore(shafiqmm@hotmail.com) 2- MBA, (gr8tahir93@yahoo.com ), 3- MBA, The university of Lahore (shafaat1601@yahoo.com ), 4Assistant Professor (The University of Lahore) E-mail # iqra4ever@gmail.com

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destination for business process outsourcing in just a couple of years, is losing its position as the low- cost destination because of the rising people costs. Employee retention means keeping right people on right jobs for every organization. There is no single definition of employee retention. Employee retention is all about keeping good people. It is much to do with our culture and how we treat people. Employee retention is a vital issue and challenge to all the organizations now days. There are numbers of factors which promote the employees to stay or leave the organization. It may be external factors, internal factors and the combined effect of both. Human resource practices counts a lot in this regard. Employee retention is very critical to the long term health of any organization. When an organization loses its talented employee it lefts a negative impact on innovation, customer satisfaction, knowledge gain during the past years and on the profitability of the organization .More over replacing cost of another employee contribute a lot to the organization.

Literature Review
Employee retention means keeping right people on right jobs for every organization. There is no single definition of employee retention. Employee retention is all about keeping good people. It is much to do with our culture and how we treat people. The research was conducted among Internal .Harrell, A.,C hewning , E. and Taylor, M. (1986)who have explored relationship among organizational-professional conflict, job satisfaction and turnover intentions. John E. Sheridan (1992) describe in his article that culture and environment is important for retention of employees and there is a positive relationship between employees job performance and their retention also differ significantly with organizational culture values . Griffeth, R. W., & Hom, P. W. (1995) discuss in that Organizational commitment has been considered as one of the most important indicator of turnover and intention to leave. It was found that employees who were more committed to their organizations had lower intention to leave than those with lower organizational commitment. Finally organizations need to be more concern about the employees because if there is stronger Organizations commitment the employees are retained for longer.

Raudenbush, S.W., & Bryk, A. S. (2002) describe that retention is very important for every organization. Cappelli, P. (2000) that several factors are considered important in a wellfunctioning of employee retention. Cole, C. L. (2000) identify that employees stay at such companies where there is a sense of pride and will work to their fullest potential. The reasons to stay are work environment, rewards, growth and development and work-life balance. Hassan, M. & Hassan, S. at el. (2010) conduct a survey on Leather Industry, Lahore by using sample size 50 tanneries managers and concluded that almost all the factors or indicators that directly or indirectly influence employee retention are correlated.

Theoretical Frame Work

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Independent Variable

Dependent Variable

Carrier Prospects Employer attitude Employee Retention Job Security Working enviornment

Objectives of this Study

Main objective of this study find out the important factors of employees retention which use by management of Foam industry In Pakistan. Impacts of factors retention employee on employee retention and find out relationship between them.

Hypothesis Statement H0: There is no relationship between career prospects, job security, employer attitude, working
enviornment and employee retention.

H1: There is relationship between career prospects, job security, employer attitude, working
enviornment and employee retention.

Methodology
Basically this research methodology depends upon the references selection of employee from different foam companies like Master Foam, United Foam , Al-khair, Diamond and Shaheen foam companies . In this research the target population was all employee of Foam industry of Pakistan. There are approximately 12 Foam companies working in Pakistan .The data was gather from 5 leading Foam companies which mention above. It was tried to gather data from 95 employees but response rate was 85%.

Questionnaire structure
For identify the important factor of employee retention, but questionnaire consist two parts one is demographics variables and other part consist independent variables like job security, Carrier Prospects ,employer attitude and working enviornment. Second part that is ranged from 1- 5

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point scale in following pattern (1= strong agree , 2= agree , 3= neutral , 4= disagree , 5= strong disagree ).

Sampling
For this study the sample population was male and female employees from 5 leading Foam Companies,pakistan. The data was collected through structured questionnaires which is structured questionnaires using different approach.

Data Analysis and Results

For this purpose data was operated by using SPSS 16 version. Reliability Reliability for individual given below table Factors of employee retention
Career prospects Job security Employer attitude Working enviornment

No. of items (questions)

4 6 3 5

%age
78% 86% 76% 74%

Demographics Demographics included age, gender, level of education, income level, and experience. Demographics were not used in the correlation analysis with the dependant variable. Demographical Profile(Table -1) Demographics
Gender Age(Year)

Category
Male Female Less than 30 31-40 41-50 51-60 Above 60 Bachelor Master M.phill Ph.D Other Less than 10,000 11,000-30,000 31,000-50,000 51,000-70,000 Above 70,000 Less than one year 1-5 year 5-10 year Above 10 year

% age
83 17 18.5 39.5 17.3 22.2 2.5 7.4 45.7 25.9 17.3 3.7 7.4 40.7 17.3 24.7 9.9 12.3 32.1 43.2 12.3

Education Level

Income(Pakistani Currency)

Experience (year)

In (table-1) analysis demographics and descriptive statistics of the sample are presented in table 1. Out of 81 respondents in the sample, 83% male employees and 17% female employee working different foam companies.39.5 % employees belong to age group (30-40). About 47.5% of the respondents had Masters as their highest education level. About 40.7% of the employees were drawing a salary between Rs. 10,000 to 30,000 and more than 43.2 % had job experience between 5-10 years. Respondents Profile (Table-2) Factor of employee retention Career prospects Job security Employer attitude Work environment Strongly agree + Agree Neutral 61.2% 58.7% 52.5% 54.9% 19.8% 13.9% 23.8% 25.1% Disagree + Strongly Disagree 19% 27.4% 23.7% 20%

Table -2 shows that response rate is 61.2% for career prospectus, it mean majority of respondent want to spending their career with their company, which shows that main factor of employee retention, is career prospectus and second more important factor is job security which is value is 58.7%. Mostly response fall in strong agree and agree column. The result for employer attitude of respondents in their organization, a very percentage 52.5% of respondent falls in agree and strong agree. The majority of work environment respondents fall in agree and strong agree column with 54.9%.

For this study explored factors are as under; 1-Carrier Prospects 2-Attitude of Employer, 3 - work environment and Job Security. Pearson correlations are obtained to determine the relationships between the different factors. The significant correlations are highlighted in below table. There is positive correlation between employee retention and Carrier Prospects, Attitude of Employer, working environment & Job security.

Correlation (Table-3)
Career prospectus 1 81 .647** .034 81 .476** .003 81 .256* .012 81 Job security .647** .034 81 1 81 .243** .001 81 .0259* .024 81 Employer attitude .476** .003 81 .243** .001 81 1 81 .013 .046 81 Work environment .256* .012 81 .0259* .024 81 .013* .046 81 1 81

Career prospectus Job security

Pearson correlation Sig.(2-tailed) N Pearson correlation Sig.(2-tailed) N Pearson correlation Sig.(2-tailed) N Pearson correlation Sig.(2-tailed) N

Employer attitude Work environment

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

In above table-3 showing analysis of correlation at 5% of level significance, p-values <.05 in all independent variables(career prospects, job security, work environment and employer attitude) to dependent variable (employee retention) are significant at level of 5% with respect to impact of variables on employee retention. It means they all have significant impact on employee retention. Following are the reasons for which employee wants to stay in Foam industry after analyzed from the data

Conclusion
Employees are the backbone of any business success and therefore, they need to be motivated and maintained in organization at all cost to aid the organization to be globally competitive in terms of providing quality products and services to the society. The main objective was this study is to investigate the main important factors of employee retention in foam industry Pakistan. We investigate after the interview of different employees that these are some main factors of employee retention like 1-Career prospectus 2-job security, 3-employer attitude 4working enviornment. The results show that positive relationship between career prospects, job security, working enviornment, and employer attitude and employee retention. The important factor for employee retention is career development according to employees of Foam companies.

Recommendations
The HR managers of foam companies should be establish flexible working hours. Safe and good working environment must be there because of hazardous chemicals used in Foam industry. Training as well as personal development plans should be in place which will show more affiliation between employee and employer and will play a vital role in removing the GAP between the top, higher and middle level management.

HR Manager and employer of any company can increase rate of employee retention through following steps:1- Include employees in decision making 2- Balance work and personal life 3- Provide opportunities for growth and development 4- Fair and equitable treatment of all employees 5- Financial and non financial benefits give to employees 6- Employee motivation(appreciation) 7- Build a strong employee recognition program.

References
Cappelli, P. (2000) A Market-Driven Approach to Retaining Talent, Harvard Business Review, 78(1), 103112. Cole, C. L. (2000, August). Building loyalty. Workforce, 79, 42-47. Available EBSCO Hostfull display. Don Grimmer .GHR Training Solutions acknowledges Bob Nelson, author of 1,001 Ways to Reward Employees for his initial formulation of "Top 10 Ways to Motivate Today's Employees". Griffeth, R. W., & Hom, P. W. (1995). The employee turnover process. Research in Personnel and Human Resources Management, 13, 245-293. Harrell, A., Chewning , E. and Taylor, M. (1986). Organizational-Professional Conflict and the Job Satisfaction and Turnover Intentions of Internal Auditors, Auditing: A Journal of Practice & Theory, Vol. 5, No. 2, pp. 109-121. Raudenbush, S.W., & Bryk, A. S. (2002). Hierarchical Linear Models: Applications and Data Analysis Methods, Sage Publications, Thousand Oaks, CA. Retaining good employees takes commitment' Building Design and Construction. Chicago: Dec 2006. Vol. 47, Iss. 14; pg. 64.