Costly job hopping

Firms paying a high price as more execs quit within a year

PETALING JAYA: Job loyalty is becoming a rare trait in non-manufacturing sectors, with some employers having to find replacements for 75% of their executives who switch jobs within a year. And, this trend is costing the companies dearly.

Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan said employers had to spend an average RM25,000 to RM30,000 to replace each employee who quit.

“It’s not as simple as someone leaving and someone coming in. There is the cost of advertising for vacant positions, interviews, screening, background checks, training and medical check-ups,” he said.

Shamsuddin cited a recent MEF survey which found that the It/communication sector had an extremely high annual turnover rate of 75.72% , the highest among the non-manufacturing sectors in the country. This was followed by associations/societies (33%) and hotels/restaurants (32.4%).

The survey was conducted on 143 companies between June 2010 and July 2011. “Employees in the It/communication industry are very mobile and they are always searching for the perfect company,” he said.

The manufacturing sector saw relatively lower turnover rates, with the highest being the basic and fabricated metallic products at 23.88%, electrical and electronics (23.04%) and plastic/rubber (19.92%).

When contacted, MTUC secretary-general Abdul Halim Mansor said that the high turnover rate among workers could be due to the rising cost of living.

“Employees will start jumping if their salaries cannot meet the cost of living,” he added.

Abdul Halim said companies within the same industry sometimes also pinched from each other, which could contribute to the high turnovers.

“You don’t see it happening so much on production floors (with less skilled workers),” he pointed out.

“This usually occurs more with employees in the semi-skilled levels,” he added.