University of California
Type of paper: Thesis/Dissertation Chapter
High Employee Turnover Among Travel Agencies in Malaysia
1.0 Introduction The tourism industry in Malaysia has grown immensely due to its potential and unique competitive edge. The sector has increased its importance within the Malaysian economy, since the 1990’s according to Bashir, M. and Ahmad, N., et al. (2008). It carries on to be a leading foreign exchange achiever, continually acting as a crucial contributor to the Gross Domestic Product (GDP) growth, business and employment opportunity, investments, and empowering the balance of payments account. Within the last decade, the tourism industry has made rapid progression and this progression is reflected in the increase of tourist arrivals and receipts. Tourist arrivals have increased significantly by almost 59% from 10.22 million in 2000 to 25.03 million in 2012 (Corporate.tourism.gov.my, n.d.). Tourism receipts in Malaysia contributed 56% of the total services receipts average between 2008 and 2012, generating a surplus in the country’s balance of payments accounts (Corporate.tourism.gov.my, n.d.). The tourism sector has become the second-largest contributor towards economic growth of currency exchange (Table 1). Table 1. Tourist Arrivals & Receipts to Malaysia
Source: (Tourism Malaysia, 2013)
In a recent study, Mazumder et al. (2011) concluded that tourism not only impacts service sectors but contributes substantially to all sectors of the Malaysian economy. The economic after-effect of tourism exists extensively within the expansion of the globalization process; this in turn increases the industry’s development worldwide. Furthermore, it not only generates a ripple effect but boosts the intersectoral links within the economy, through these links; international tourism consumption will impact nearly all sectors of the economy. Therefore, looking at how important this industry is for the economy, this report aims to find methods to retain employees in various sectors of the travel sector with the main focus towards travel agencies.
1.1 Issue The main issue being assessed in this report is focused on high staff turnover. However the main component of this research is strongly related to “turnover intent”, rather than turnover itself.
1.2 Study Aim In today’s competitive world, the travel industry has proved to become one of the most unique tools used for economic progression. Along with that, it has also helped improve social incorporation and multinational interpretation and understanding of diverse cultures. This allows travel agencies to expand target markets. Moreover, also in this unstable business environment, travel agencies that wish to succeed need to be accepting of change. They need to be able to not only meet but also surpass the threats and opportunities presented to them by their competitors. Numerous researches have been carried out to study the relation between turnover intent and job satisfaction. However, little interest is given to travel agencies, although they make up an important part of the tourism industry. When turnover intent occurs among service occupations such as those of the travel industry, there is not only a negative impact on the management and firms but also on the service and products quality, hence this may show a negative result in customer satisfaction. This research discusses how travel agencies need to focus on employee management and retention. The main issue being assessed is focused on high staff turnover intent among employees in travel agencies.
1.3 Research Objectives 1) The factors that influence turnover intent among newcomers in travel agencies. 2) To provide recommendation that could prevent or at least reduce this issue.
1.4 Purpose of study According to Kennedy and Berger (1994), turnover rate is generally at its highest among those employees who are newcomers in the company, and occurs within the duration of the first four weeks on the job. Therefore, the first objective is to identify factors that influence turnover intent among newcomers in travel agencies. However, every problem also normally has a solution or at least if there is no specific solution, there are various methods that can be applied to ‘control’ the problem. Hence, understanding the methods that can either solve or control turnover intent is the second objective of this research.
2.0 Literature Review Employee turnover is deliberated as an obstacle to attaining high levels of productivity and efficacy in business jobs or operations (Deery & Shaw, 1997), especially in the travel industry, where the relationship among employees and customers is crucial. A high employee turnover rate is a major factor that reflects a decrease in customer satisfaction; this in turn impacts a loss in repeat customers and reputation of being a good business. Prior researches state that the more work experience an individual has, the less likely they are to leave (Boles et al., 1995). It was also said that hiring individuals who have experience within the travel industry could reduce turnover intent among travel agencies.
2.1 Defining job turnover intent Turnover can be defined as the decision to withdraw from current jobs by taking part in a series of psychological steps (Mobley, 1977):
□ Evaluation of job
□ Experienced job dissatisfaction
□ Thinking of quitting
□ Evaluation of expected utility search and cost of quitting □ Interaction to search for alternatives
□ Search for alternatives
□ Evaluation of alternatives
□ Comparison of alternatives vs. present job
□ Intention to quit/stay
2.2 Factors influencing job turnover intent There are a number of factors that have been associated with turnover intent in studies that have been conducted in the past. However, most researches have mainly focused on personal differences, age, education, knowledge, income, gender, and job level to name a few determinants that have been identified to influence job satisfaction (Fournet et al., 1996). Researchers believe that age, tenure, job level, and income are associated with job satisfaction (Herzberg et al., 1957). Mei-Chih et al. (2007) showed there is a relationship between job satisfaction and age. According to De Vaney and Chen (2003) age has an effect on job satisfaction. Results from several studies indicate that there is a relationship between sex and job satisfaction (Bilgic, 1998; Lumpkin & Tudor, 1990; Goh & Koh, 1991 and Oshagbemi, 2000). Some studies conducted by Lumkin & Tudor (1990) and Stedham & Yamamura (2003) showed that female managers are given less pay and are hence, surely less satisfied with their compensation, promotions, and overall work satisfaction.
Studies established that job occupancy has been determined as a factor related to job satisfaction (Herzberg et al, 1957; Lee & Wilbur, 1985; Schuh, 1967). Sokoya (2000) instituted that there is a major difference between job occupancy and job satisfaction. Raymond and Elizabeth (1985) demonstrated that job occupancy has impact on job satisfaction. Cotton & Tuttle (1986) focused their theory on the supplements of turnover and then into their factors: (1) external correlates; (2) structural or work-related factors; (3) personal characteristics of employees. In a different, more recent study conducted by Griffith et al. (2000), gave a more comprehensive explanation about antecedents of turnover. These antecedents were classified into four groups, these include: 1) Demographic predictors
2) Job satisfaction, organization factors, work environment factors 3) Job content, external environment factors 4) Other behavioral predictors
3.0 Methodology The research conducted for this study is qualitative, using the probability method for selection of candidates. The primary method was interviews conducted focusing on focusing on the factors that influence ‘turnover intent’ among employees. Whereas, the interviews helped grasp knowledge as to why employers/managers think ‘turnover intent’ occurs and what sort of precautionary measures can be implemented to control or better reduce turnover intent. Then secondary information was gathered on previous studies regarding the same issue i.e. turnover intent among employees in travel agencies. This information was found through books, journals, and reliable websites.
3.1 Interviews Technique The survey was conducted amongst employees of five different travel agencies. The employees were selected at random to avoid any biasness. The interviews on the other hand, were conducted amongst people at the top of the food-chain in the tourism and travel industry in Malaysia. Interviewees were selected at random to gain perspective from various individuals regarding the same issue.
3.3 SIZE OF SAMPLE As mentioned previously, the survey was conducted among employees from five different travel agencies in Malaysia. Within each of these travel agencies, 7 employees from any department were selected to fill out the survey at random. The total number of survey samples analysed were 30, although the total number of survey forms distributed personally were 35. The reason was that every respondent may not fill in the form completely and correctly and therefore, out of 35 survey’s 30 properly filled out surveys were carefully examined to ensure validity of results. The survey was also made available online on surveymonkey.com to gather results in a convenient and fast method. This information gave insight for the thoughts of employees from different regions and states in Malaysia. The interviews were conducted with five individuals who are managers or CEO’s at the five travel agencies from where the employees were surveyed.
3.4 SAMPLING PROCEDURE There are different methods of distributing the surveys; by post, e-mail, or personally. For this particular research the surveys were distributed personally and also conducted online to receive results from travel agencies that are out of reach. Also a higher number of responses increased the accuracy of results.
4.0 Findings and Discussion
5.0 Recommendations So many questions arise as to what factors cause turnover intentions among employees in travel agencies, one of the questions is: Could the problem possibly root from the tourism education and training itself? Since, the operations of travel agencies are not very precise and adequate (i.e. there is no exact procedure to be followed in jobs of those working in travel agencies), it may be possible that students who graduate with a diploma/degree in tourism related studies are not well-prepared to deal with globalization and the effects it has on the tourism industry. Therefore, training and development has an important impact on the development of skilled professionals prepared for the business operations taking part in travel agencies on a daily basis.