5 Reasons WHY Employees Left a Company

Understanding your employees thinking nowadays is crucial to retain top talents in your organization. What's the reason behind for them to press the "Resign" button? Detecting it early and replacing it with a "Stay" button before it is too late.

Please be mindful that the generation now is different, their thinking is different, their feeling towards a job is very much different. As such, employers or top management should find out the determining factor of employees going to resign. Let's look at the reasons...

1. Better prospects
   No doubt, this is the most common reason to leave. We can't prevent someone to leave for good, either because of higher pay or better position offered elsewhere. Correct? True or not, some use this just as an excuse, rather than the reason, to resign. He/She may leave because of other reasons listed below...
   
   
2. Lack of Recognition / Respect from top management
   Sometime recognition or respect from bosses treated as an "parameter" to gauge the value of an employee for an organization. For top performers, other than monetary reward, recognition is also important. Respect come from two ways, not only towards top management. Agreed?
   
   
3. Just can't gel with company's culture
   Everyone's belief and culture may determined his/her length of service. You can't stay in a company which the culture is in contrast with yours. Remember, it's 5 days a week, 9 hours a day job. Example, most of your colleagues joining a direct sales company part-time, but you're not and against it. Can you overcome it?
   
   
4. Unfavorable company forecast
   Normally due to merger and acquisition exercise, employees may feel that it's not in their favor to stay. Maybe he/she will be the one being axed out or VSS later. Then, why don't I leave first before being forced to do so?
   
   
   
   
   
5. Imbalance Work-Life situation
   In the end, working is not everything in life, employees evaluate their lifestyle also especially when he/she gets married and having children(s). Where you work and live is also important. Time spent on traffic jam is stressful and time consuming, which may lead to the exit door.
   
   

After knowing all this, employers should be smart enough to examine each and every candidates before hiring them. Questions such as "Where they live?" and "What's their expectation?" must be asked. Happy working.

Impact of minimum wage policy from an economics perspective

Continue from previous post on "New Minimum Wage Policy", here we analyze the impact from an economics perspective. Many people said the new policy will jack-up the inflation figures due to higher production costs. Subsequently, it will dampen the GDP growth numbers. Is it true?

The impact on inflation and GDP growth is ambiguous. Setting a minimum wage would boost wages and consumption for workers who remain employed (likely to be the more productive workers, working in companies that have higher profit margin), but would hurt the profitability of businesses that are labor intensive and could potentially lead to higher unemployment rate.

The impact on growth will likely be a net negative in the short-run as it might result in raised cost without an increase in productivity. In the long-run, this policy may bring about a positive impact if it succeeds in encouraging workers to upgrade their skills or for companies to invest more capital to boost productivity.

From an economic standpoint, the minimum wage policy is not the best way to help the lower income households. A gradual phase-in of the minimum wage should help reduce some of the negative impact.

Unless the introduction of the minimum wage policy leads to a widespread upward adjustment in wages, there shouldn't be a significant impact on inflation.

Some SMEs claim that a minimum wage would bankrupt small firms which rely on cheap labor, from Indonesia, Myanmar and Bangladesh. The Malaysian Federation of Employers, whose members collectively hire 2 million workers, said it wants an exemption for the smallest employers and for the policy to be implemented over several years. Ex-PM Mahathir Mohd, who is very influential in the political scene, is also against the minimum wage policy as he believes that it would hurt Malaysia’s competitiveness, especially during economic challenging times.

Source: Credit Suissue report dated 19th March 2012

Summary of 2011 Bank Negara Malaysia Annual Report

The global economy grew at a more moderate pace in 2011 after the strong rebound in 2010. The growth momentum was weighed down by continued structural weaknesses and fiscal issues in the advanced economies, geopolitical developments in the Middle East and North Africa region and the disruptive impact of natural disasters on global manufacturing production. These developments reverberated onto international financial markets and contributed to heightened market volatility throughout the year.

Despite the less favourable external environment, emerging economies continued to record firm domestic-driven economic growth. At the same time, emerging economies faced increasing challenges from volatile capital flows and rising inflationary pressures. Amidst this environment, the Malaysian economy continued to grow steadily underpinned by the expansion in domestic activity and firm regional demand.

The Malaysian Economy in 2011

The Malaysian economy recorded a steady pace of growth of 5.1% in 2011 (2010: 7.2%), despite the challenging international economic environment. Growth was lower in the first half of the year, particularly in the second quarter, as the economy was affected by the overall weakness in the advanced economies and the disruptions in the global manufacturing supply chain arising from the natural disaster in Japan. Although the global economic environment became increasingly more challenging and uncertain in the second half-year, Malaysia’s economic growth improved due to stronger domestic demand.

Outlook for the Malaysian Economy in 2012

• Malaysia’s economy is projected to experience a steady pace of growth of 4 – 5% in 2012
• Domestic demand to remain resilient
• 2012 Budget expected to provide support to private consumption
• Upward revision of public sector wages and one-off financial assistance to low and middle-income groups
• Ongoing implementation of projects under ETP
• Higher capital expenditure by both the Federal Government and the non-financial public enterprises
• Implementation of the Special Stimulus Package through Private Financing Initiative

Labour market conditions are expected to soften in 2012 amid the slower economic activity. The unemployment rate is projected to increase to 3.2% of the labour force in 2012. Headline inflation is expected to moderate in 2012, averaging between 2.5 – 3.0%. The lower inflation projection reflects the moderation in global commodity prices and a more modest growth in domestic demand.

Source: BNM report