Motivation and retention of outsourced employees

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ABSTRACT A food service supplier is experiencing that, in their distribution centres, within 30 days, an average of 48% of the outsourced employees resign, which impacts profitability, productivity and service quality. This study investigates which factors of the Herzberg two-factor motivation theory contribute to the retention of outsourced employees of a food service supplier and whether there is a difference between eastern or southern European employees. A total of 299 outsourced employees of the food service suppliers at four out of nine distribution centres filled out a 15-item survey, including questions on the various aspects of the Herzberg motivation theory, and their intention to stay with the company. Results show that extrinsic motivation factors play a more significant role in the retention of outsourced employees in comparison to the intrinsic factors. Extrinsic factors significantly correlated with retention are policies and administration, work conditions, supervision and interpersonal relations. Intrinsic factors significantly correlated with retention are advancement, the work itself and achievement. No significant relationship was found between the salary factor and employee retention. Although results showed that southern Europeans tend to stay longer with the company in comparison to eastern Europeans, no significant differences were observed regarding the impact of motivation and hygiene factors between the two sub-groups. To enhance retention, the food service supplier is advised to provide sufficient growth and development opportunities, assign important responsibilities and acknowledge accomplishments. Furthermore, the company must assess, track and oversee all relevant extrinsic and intrinsic motivation factors to connect the outsourced employees with the company for a longer term.