Corporate social responsibility impact on talent retention among Generation Y.
| Autor | Zainee, Intan Azurin |
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Introduction
This article presents the impact of corporate social responsibility (CSR) on employee retention in Generation Y (Gen Y) in a financial services industry, particularly in the accounting profession. Thus, the discussions in the next sections revolve around CSR, employee retention and Gen Y. Globalization has pushed many corporations to integrate globally; hence, employees who serve as key intangible assets to the corporations should aid as a powerful source of competitive advantage. However, the ability to retain valuable employees has become one of the challenging issues faced by many organizations today. These valuable employees have become valuable resources for the companies so that they can provide and serve as the competitive advantage for the organizations' survival (Bhattacharya, Sen, & Korschun, 2008, Heinrich, 2017). Heinrich (2017) also mentioned that in today's competitive working environment, business organizations are facing a "hard time" in retaining key valuable employees; this problem has caught the attention of not only the top organizational managements but also scholars in the field of human resources. Mushtaq (2013) in her study found that corporations today are constantly striving to cope with the competitive market, which in turn has made retaining valuable employees even more challenging. In addition, Tatoglu, Glaister, and Demirbag (2016) concurred with Mushtaq's (2013) finding, stressing that retaining talent has emerged as an overwhelming issue faced by corporations due to increasing turnover costs including the loss of corporate memory, productivity and intellectual and social capitals. Despite the gravity of such, evidence from the Malaysia Productivity Corporation revealed that only a few organizations focus on retaining their talented employees (Tajuddin, Ali, & Kamaruddin, 2015).
In 2015, a survey by Michael Page, the world's leading professional recruitment consultancy involving 869 working Malaysian professionals, found that employee retention remains to be a significant challenge to Malaysian employers (Michael Page Malaysia, 2015a, b). The report further added that retention would be a key concern for Malaysian employers as 44% of professionals were expected to leave their current role in the next 12 months, while 40% stated that they only saw themselves in the same role for the next one to three years (Cooper, 2015). Moreover, both the "2014 Global Workforce Study," involving 32,000 employees globally, and the "Talent Management and Rewards Study," carried out by Towers Watson in 2014 involving more than 1,600 organizations worldwide, found that Malaysia appeared to be struggling to address the war of talent and employee retention continued to be a key challenge for Malaysian employers across different industries. The retention scores have also declined steadily, despite an increase of 40% since 2012 as a result of low employee engagement. Surprisingly, highly engaged employees tend to leave organizations within two years of working with the current organization, resulting in an increase of engagement percentage from 30% since 2012 to 31% in 2014. More and more employees, who accounted for 36% of the surveyed employees, indicated that they were likely to leave the organizations compared to 29% in 2012 (Yin, 2015).
CSR is widely researched due to its applicability in multidisciplinary fields, such as business and management, finance and engineering (Bouvain, Baumann, & Lundmark, 2013; Cooke & He, 2010; Pienaar, 2010; Shanmugam, 2013) and industries, such as financial services, oil and gas and manufacturing (Aguilera, Rupp, Williams, & Ganapathi, 2007, Ferreira & Real de Oliveira, 2014; Heinrich, 2017). As a matter of fact, CSR is one of the important tools for business organizations to achieve competitive advantage (Pienaar, 2010). It happens due to the increasing pressure from the public for business organizations to adopt and practice ethical and philanthropic responsibilities along with economic objectives and legal duties. In consequence, the social responsibility awareness has increased from year to year along with government's regulations imposed on companies, especially publicly listed companies, to practice CSR and to oblige them to disclose their CSR activities in their annual reports. According to Noor Emilina, Nurul Akmal, Nur Raihana, Nur Syuhada, and Nurul Fatma (2015), considering the pressure from public and nongovernmental organizations(NGOs),theMalaysianGovernmenthas taken serious steps to embed the CSR idea into every corporation, especially publicly listed companies in Malaysia. The CSR concept is seen as an extensive plan of strategic management by many corporate leaders, which helps companies sustain their businesses (Pyszka & Gajda, 2015).
Several studies have identified Gen Y as a newly emerging talents wave in the labor market. Being the new cohort of the labor force, Gen Y poses distinct characteristics than the previous cohorts of Generation X (Gen X) and baby boomers (Fadilah, Maniam, & Nafis, 2015). As opposed to previous generations, these studies have found that, in general, Gen Y individuals are very demanding, possessing strong bargaining power and very influential workforce. A study by Fadilah, Maniam, and Nafis (2015) found that Gen Y is disloyal toward its organizations, which in turn contributes to a high turnover rate. Thus, organizations are at a conundrum in developing the best strategies to retain them. With this in mind, the application of CSR practices in the organization could be seen as a significant factor in improving employee retention.
Although Holland, Sheehan, Donohue, and Pyman (2007) had suggested that every corporation should align their employee retention strategies with CSR to keep top performers in the company and to ensure their company's long-term sustainability, research between the two fields is confined only to a few industries. Besides, much research studies on CSR mainly focus on the macro level exploration (Aguinis & Glavas, 2012) and institutional level, where only a little emphasis is given to internal stakeholders (Aguinis & Glavas, 2013). Lately, the focus has diverted to studies on the internal stakeholders of companies, namely, the human capital, which serves as the organization's most valuable key asset. Accordingly, employees have become the central attention of CSR as well as human resource research, where issues concerning employee retention, especially the top performers, become crucial (Foong, Joy, Lim, Phang, & Tiong, 2015). CSR and its relationship with employee retention make up the focus of this study since many research studies which investigated the connections between these two factors appear to be limited and inadequately available.
This study pays a specific focus on the financial services industry. There are a few studies involving Gen Y and employee retention in various disciplines and contexts. Among them, one can find studies on the retention of Gen Y employees in Malaysia's small and medium-sized enterprises (Wee, 2013), employee retention in the manufacturing industry in six Asian countries (Zheng, Soosay, & Hyland, 2007), employee retention in the manufacturing industry in Malaysia (Foong, Joy, Lim, Phang, & Tiong, 2015), employee retention in the logistics industry in the Columbus region (Cofer, 2010), employee retention and its factors in the textile industry in Yazd Province, Iran (Shahvazian, Mortazav, Lagzian, & Rahimnia, 2016), and employee retention strategy in the health-care industry (Gering & Conner, 2002). However, studies on the financial services industry are scarce, particularly considering the accounting sector in Malaysia. In Malaysia, many accountants are mostly concentrated in the Klang Valley areas, which cover the state of Selangor and the Federal Territory of Kuala Lumpur. Based on the list of registered members in the Malaysian Institute of Accountants (MIA) in 2017, most Gen Y accountants are based in Selangor (12,941) and Kuala Lumpur (7,253). In 2017, according to the Emerald Insight database, less than 400 academic articles about employee retention in the Malaysian settings have been published and yet there are only a few studies on the financial services industry.
Andrew Robb of Deloitte UK discovered that job positions in accountancy were of the top ten hardest job positions to fill across the globe (Boersma, 2014). Evidence in a report by TalentCorp (2016) indicated six sectors that are suffering from skills imbalance, including the accounting sector. Hence, this supports the claim that the accounting sector is among the critical sectors in Malaysia that needs attention in order to solve the problem of employee retention. Obviously, corporations need to realize the importance of employee retention so that they can withstand the impact of talent shortages. A study on accounting students in Malaysia by Nasir, Ghani, and Said (2009) identified several major reasons that may lead to the shortage of accountants in Malaysia, including difficulties in filling the membership form, high membership fees, no added benefits for current employment and the lack of ambition to become an accountant. Although audit and tax are the main services provided, the growth of this sector has led the industry to provide non-related accountancy services and consultations as well. In addition, due to the growth and demand of this sector, the accounting profession also has various levels of expertise and seniority. Most major employers, such as the Big-4 accounting firms, global corporations and major listed companies focus more on retaining their employees to fulfill the various functions in their organizations.
Thus, this paper intends to accomplish the following objectives: (1) to determine the level of CSR awareness, (2) to determine the relationship between Carroll's (1991) CSR dimensions (economic, legal, ethical and philanthropic responsibilities)...
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