FACTORS INFLUENCING GENERATION Y EMPLOYEE’ RETENTION IN MALAYSIA’S AUTOMOTIVE INDUSTRY: MEDIATING ROLE OF ORGANIZATIONAL COMMITMENT

Abstract

Under the 11th Malaysia Plan, Malaysian government aims to boost productivity and reduce dependency on inputs from capital and labor. However, the Malaysian automotive industry needs a lot of talents and are still depending on people. Due to that situation, the toughest challenge that the industry encounters nowadays is not only how to manage the people but also how to how to maintain them. Thus, an appropriate employee retention programs to attract, recruit and retain the talent is crucial for Automotive Industry in Malaysia. This study focused on Generation Y employees who were born between 1980 and 2000 due to their ever-increasing representation in the workforce, approximately 50 per cent by year 2020. Past studies stated that Generation Y possessed high level of turnover intention and have different attitude towards loyalty to the companies. Employee retention issue related to this generation might increase if there is lack of understanding on the expectation of Generation Y at the workplace. However, these employees will also be able to make significant contributions if properly managed. In line with that, the purpose of this study is therefore to identify factors that influence Generation Y employee retention in Malaysia Automotive Industry as well as to understand the mediating role of organizational commitments on those relationships. Data were collected though a survey with 204 employees working in automotive industry in Malaysia. Overall, findings from this study indicated that Herzberg’s Motivation Factors played significant roles in retaining employees at organizations than Hygiene Factors, suggesting that organizations need to focus more on advancement, recognition, responsibility and work itself to retain their employees. The study also showed that organizational commitment did mediate the relationship between the Motivation factors and employee retention in Malaysia’s automotive industry.