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GENERATION-Y TURNOVER INTENTION IN

BUSINESS PROCESS OUTSOURCING SECTOR
Conference Paper October 2013
DOI: 10.13140/2.1.1577.6001
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2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

AND FINANCE (2nd ICMEF 2013) PROCEEDING
28 -29 OCTOBER 2013. NOVOTEL 1BORNEO, KOTA KINABALU, SABAH, MALAYSIA
ISBN: 978-967-5705-12-0. WEBSITE: www.internationalconference.com.my
GENERATION-Y TURNOVER INTENTION

IN BUSINESS PROCESS OUTSOURCING SECTOR
Wan Fadzilah Wan Yusoff
Graduate School of Management
wanfadzilah@mmu.edu.my
Abdelbaset Queiri
Graduate School of Management
basset11519@gmail.com
SabarudinZakaria
Faculty of Management
sabarudin@mmu.edu.my
Raja Rizal Iskandar Raja Hisham
Faculty of Business and Accounting
Infrastructure University Kuala Lumpur
raja.rizal@iukl.edu.my
ABSTRACT
Employee turnover is a perpetual problem in any organisation. However, the situation has never been
more acute as when it involves the workforce from the Generation Y or also known as the Millenials.
It is deemed that the highest turnover rate is coming from these groups of people (Sujansky and
Ferri-Reed, 2009). Apparently, human resource strategies to retain employees that had worked very
well during the industrial economy are now rendered less effective in the knowledge economy. The
Millennials are found to be of a different paradigm compared to previous generations and one clear
difference about the Millennials is how fast they are changing jobs. This is further compounded by
the ease of job mobility enabled by the borderless world and the nature of upbringing experienced by
the Millennials that shape their character and attitude. This research seeks to study and understand
the Generation Y (Millennial) workforce from the perspective of strategic human capital
management with specific emphasis their turnover intention in the business process outsourcing
sector.
Field of Research: Turnover intention, strategic human resource, generation-Y, millenials
1.
Introduction
High employee attrition rate among the younger generation workforce is becoming a common
phenomenon in Malaysia. According to a report established by Aon Hewitt SIS (2011), Malaysia had
an attrition rate equivalent to 15.9% in 2011, which demonstrates an increase of attrition rate over
the past years; this ranks the country in the sixth position among the Asia-pacific countries.The trend
430

of high turnover rate nowadays is attributed predominantly to the new generational workforce,
labelled as generation Y or millennials.
There may be a lack of precise statistical support on the rate of generation Y employee turnover in
Malaysia, but statements from human resource practitioners and managers reveal that the
phenomenon is currently taking place predominantly within this new generational workforce. For
instance, Pang Yee Beng, Director Manager of Dell Cyberjaya highlighted the importance of
managing talent staff of generation Y, as the market is characterized by shortage in talents and there
is a war of recruiting talents among the organisations. Jeannie Khoo the Kelly Service Marketing
director, in 2012 had a prolonged interview with The Star newspaper discussing the potential causes
of the generation Y employees turnover, with emphasis on why job hoppers (especially Generation
Y employees) hop. Raman et al. (2011) concurs with the fact that work mobility is Generation Y
employees characterstics in Malaysia,to an extent it is a current trend, probably work mobility is in
their blood.
This information comes to no surprise, since the outlook of workforce demography has changed;
Malaysias generation Y are becoming the main pillar of workforce in the upcoming years. This is in
tandem with the inception of other generational workforce retirement (e.g. baby boomers), as it is
anticipated that by 2015 Malaysias Gen Y workforce would exceed 50% of the total workforce (Baba
& Sliong, 2012). In that sense, Generation Y will continue to reshape the human resource practices at
workplace and understanding the factors inducing their attitudes becomes currently necessary.
Despite their tendencies of switching their jobs with or without justifiable reasons, generation Y
workforce is deemed to be the generation with high performance and they are expected to bring
positive characteristics and benefits into their prospective organisations; unlike other generation
workforce; they are multi-task, technically skilled, achievement oriented and culturally diverse (Han
& Su, 2011). Therefore, retaining this cohort of workforce is a priority to human resource strategy
for an organisation to remain competitive.
While there is a considerable amount of information being published by Malaysians media reports
as an effort to recommend best human resource strategies to retain generation Y employees or to
explain what might trigger their intention to leave there is a dearth of academic studies that attempt
to address this important problem by providing valid empirical evidence. If at all such information is
available, it is merely anecdotal information or informal theories. Khatri, Fern, & Pudhwar (2001)
identified the flaw of anecodotal information informal theories as basis of making decisions or
forming strategies. Anecdotal information lacks the empirical justification and hence becomes more
susceptible to error or not reflecting the reality. Therefore, empirical evidence is required to explain
the generation Y turnover in Malaysia so that any retention strategies may be formulated to fit this
new generational workforce.
This study focuses on business process outsourcing sector (BPO), due to the fact that the sector
employs significant number of generation Y workforce and rely heavily on them for growth and
success. Besides, the sector is regarded to have higher generation Y employees turnover relative to
the other industries (Zinnov, 2010). This combination of high turnover rate and the presence of
generation Y workforce at BPO sector enable the investigation that serves the purpose of this study.
It is to the authors knowledge no attempt was found to investigate the intention to quit for
generation Y workforce in Malaysians BPO sector, rendering it a worthwhile area of inquiry.
Accordingly, the objective of this study has two-folds. Firstly, this study intends to examine factors
that contribute to generation Y intention to quit in BPO sector. Secondly, intends to examine the
importance of anecdotal information informal theories held by experts and managers pertaining
431

to the reasons behind generation Ys attrition in Malaysia. This is an attempt to verify whether this
emphasises on anecdotal information is real or fiction, in other words empirically investigate if there
are other factors who could better explain the intention to quit in Malaysia among generation Y in
comparison to the spread or the agreed factors in media and by experts.
2.
Literature of Review
The retirement of baby boomers workforce in the upcoming years is inevitable, if not currently
happening. Organisations should prepare themselves to understand the new generational workforce
who will replace the retired baby boomers. Several qualitative researches in western context
highlight and report generational differences in personalities, general values/work values, attitudes
and behaviours where such researches discuss the effects of these differences on workplace (Eisner,
2005; Smith & Galbraith, 2012; Haynes,2011; Weyland, 2011).However, Twenge et al. (2010) opines
that these researches, being non-empirical, are susceptible to error due to their reliance on
subjectivity. On the other hand, Giancola (2006) and Macky, Gardner, and Forsyth (2008)
refute the existence of generational gap and describe it as myth rather than being reality.
The underlying reason for their refuting is either subjective or based on cross sectional
studies likely to confound the generational effects with age or career effects and time
period effects.
The arguments on generational differences subsided through utilisation of few time lag studies,
which distinguished between the generation effects and age effects (e.g .Twenge &
Campbell,2008;Twenge, Campbell & Freeman ,2012; Smola & Sutton 2002; Kowske et al. 2010).
Therefore, it is not surprising to expect generation Y enters the workplace with different attitudes,
values and preferences, notwithstanding, similarities and differences are sometimes exaggerated in
the literature, yet even if there are few differences, management attention is still warrantable
(Twenge, 2010).
Consistent with the generational workforce differences, the BPO sector in Malaysia recognises the
need to understand the majority of its workforce (generation Y) intentions to quit to void the
negative aspects pertaining high turnover. Hence, this article is premised on two sets of independent
variables to explain the rationale behind the high turnover of generation Y employees in BPO sector.
Firstly, the controllable factors, comprising the Malaysians BPO sector attributes and strategies
which are likely to be unsuitable to accommodate generation Y employees preferences and needs.
And the second set of independent factor referred to as uncontrollable factors, are investigated in
terms of their attributes to leading to a work-life conflict and subsequently contributing to the
generation Y employees turnover intention.
2.1 Controllable Factors

Controllable factors can be handled and influenced by organisations (Khatri et al.,2001).For example,
if the employees suffer from long unsocial working hours, organisations can introduce flexible
working hours and find means to decrease the working loads, thus the strategy to resolve the issue
is within the control of the organisations. Generation Y is found to have particular emphasis on
certain work values over the others. Work values are enduring and fairly stable (Low et al.,
2005).According to Scott (2000, p. 356), this value system or view of the world stays with
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the individual throughout their lives and is the anchor against which later experiences are
interpreted.
Employees are motivated by outcomes that they value; indeed generation Y enters the workplace
with work values that shape their preferences. Unmet work values would exert an adverse influence
on their attitudinal outcomes, that is, dissatisfaction, uncommitted and intention to quit (Lee, Hung,
& Ling, 2012).
As reported by Twenge (2010), a comprehensive review for work values differences among
generations based on time-lag design indicates an increase in extrinsic values within generation Y
when compared to other generations, though a slight increase in extrinsic value occurs between
generation X and generation Y. The time lag studies also reports a large increase in extrinsic value
within generation X and Y when compared to baby boomers that measured through the size effects
(Twenge, 2010b). This result contradicts the results from Brugess (2011) and Johnson (2002) who
suggest generation Y favours intrinsic values over extrinsic values although most of the cross
sectional studies are consistent with time-lag studies in reporting no difference in intrinsic values
among the different generations (Cennamo & Gardner 2008; Twenge, Campbell & Freeman,2012).
Similar studies conducted by Ching and Kee (2012) and Lee et al. (2012) on generation Y teachers
and pre-service teachers respectively in Malaysia confirmed the preferences of generation Y
extrinsic values over the intrinsic values, though they rely on cross sectional design that may
confound age effects with generational effects. However, due to limited studies in longitudinal they
are considered to be one of the pioneers to examine the work values differences in Malaysian
context.
According to Lock (1976) employees utilise their work values to evaluate the status of the job. Work
values serve as the basis to judge a situation at workplace, whether it could result in either job
satisfaction or dissatisfaction. Further, Chatman (1989) concluded that the congruity between
employees work values and the communicated organisations work values has direct influence on
the employees job satisfaction. Hence, given the importance of extrinsic values to generation Y and
unmet preferred extrinsic values may result in decreasing of job satisfaction.
The influence of job satisfaction on employees turnover is widely investigated in many studies and
the results are consistent in reporting negative relationship between the job satisfaction and the
intention to quit. For instance, Munusamy (2012) conducted a study on the factors influencing
generation Y employees to quit in Malaysian ICT industry; the study found negative relationship
between job satisfaction facets (based on Smith et al. 1969 scale) and intention to quit for
generation Y employees at ICT industry. The strength of his study lies in examining specific aspects of
job satisfaction rather than measuring the overall job satisfaction which allows gaining insight on the
effects of each aspect on the intention to turnover separately. Despite that, downside of this study is
on its selected sample; as 20% of sampled generation Y employees are not Malaysian, which serve as
direct contradiction to generational theory premises, in the sense that 20% of the selected sample
may not spend their childhood in Malaysia, thus, there values are different. In addition the
theoretical model explained 22.9% of the intention to quit for generation Y at ICT Industry, which
might be attributed to the fact that the chosen factors are not properly relevant in the ICT industry.
Several aspects related to the satisfaction with extrinsic values are relevant to the BPO sector in
Malaysia, important aspects as part of extrinsic value is the satisfaction with pay and benefits among
generation Y in BPO sector. Based on innumerable anecdotes, generation Y employees are
materialistic and can quit from job for extra dollars and better benefits as the empirical studies
affirm their preference towards extrinsic rewards. Moreover, Zinnov (2010) reports that BPO sector
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are one of the lowest in terms of average annual salary when compared to other domains, for
instance, average annual salary in BPO sector as in 2010 is roughly 8000 USD when compared to
18000 USD at product development domain, given the long working hours and skills used at BPO
sector, though the tasks at different domains are not totally comparable, however, it reflects large
disparity in salaries across domains. Besides, Zinnov (2010) reports there are no attractive fringe
benefits (monetary and non-monetary) at BPO sector in Malaysia, which could be a reason behind
their quitting and this requires further verification.
Apart from extrinsic rewards like pay and fringe benefits, generation Y values other aspects of
rewards at the workplace. To retain generational employees Eisner (2005) and Gordon (2010)
suggest paying close attention to flexible work values like hours of work, work and life balance and
working independent from others. Consistent with this evidences, a series of time lag studies
conducted by Smola and Sutton (2002) and Twenge et al. (2010) report an increased trend towards
freedom-related work values with specific importance given to the work life balance such that
balancing work and life becomes a fundamental value to generation Y(Choa,2005). In addition, Deery
(2008) highlights the importance of work life balance strategies as currenttrend at workplace to
further enhance job satisfaction, organisational commitment and to alleviate the intention to quit.
The increased trend towards work life balance is believed to be attributed to the decline in work
centrality for generation Y generation Y is said to work to live. Besides, Allen (2004) attributed the
importance of work life balance within generation Y as this new generational workforce values
family and home. However, he reported that generation Y resembles the traditionalist generation in
terms of placing importance to home and family values. Hence, the values are cyclical rather than
being increased linearly. In contrast, contemporary time lag studies are in support of linear effects
that possibly result into the generational differences, that is, values are inherited then developed
and taken care by the next generation. This is consistent with a proverb that states men resemble
the times more than they resemble their fathers. Hence, work life balance is found to have
significant impact on the intention to quit among generation Y workforce in ICT industry in Malaysia.
Work life balance is found to be the most important factors as it accounts for 15.1% out of 22.9%
that is explained by the model proposed by Munusamy (2012). Further, the perceived work life
balance correlates negatively with intention to turnover as examined by Noor (2011) among
academics in Malaysian context. In the essence, work life balance has an important impact on
generation Y attitudes from the perspective of intention to quit.
Another sector that influences the work life balance on generation Y employees and its impact on
intention to quit is the Business Process Outsourcing (BPO) sector. It is known for the unusual
working hours (work timing), long work hours (work load) and the demanding responsibilities that
lead to stress due to pressure to perform on matrices (Vanishree, 2012). Such characteristics are
highly likely to prevent the exercise of work- life balance activities. Ramasami (2007) found these
characteristics relevant to the BPO sector in Malaysia, which have strong impact on the stress level
among the employees in BPO sector, nevertheless, his sample was highly selective as only customer
service executives was selected for the investigation. In addition, no specific focus on generation Y
workforce at BPO sector was given.
Confining our study to the aforementioned controllable factors might not be sufficient to provide a
holistic view of what drives generation Y employees away from the BPO sector in Malaysia. It is
worthwhile to devote a particular interest to the status-related work values within generation Y.
Status-related work values which include recognition, advancement, prestigious and authority have
been much appreciated by generation Y as affirmed by cross sectional studies conducted by
Cennamo & Gardner (2008). However, Weyland (2011) suggested that status is not in the priority list
434

of generation Y sincesuch an assumption was subjective and based on the idea that generation Y had
seen their parents work hard for modest incremental and promotion. Therefore generation Y has
developed the perception that gaining status at the workplace through promotion to gain better
salary does not outweigh the effort to be made to gain that particular status. In contrast status work
values to Lyons (2004) means otherwise. He distinguished status work values, for example, career
advancement) from extrinsic work values like promotion. The difference lies in that status work
values implies more authority and prestige, unlike status, which is described as one aspect of
extrinsic value, which entails a salary increment. Lyons (2004) set forth status work values as a
dimension in itself. He furthermore attributed the increase of status related work values within
generation Y to the increase in core value represented by power value.
In Malaysia, few real attempts were made to measure the status work values as a separate
dimension for generation Y workforce. Available studies shed light into two known work values
dimensions; extrinsic and extrinsic work values that are based on two-factor theory propounded by
Herzberg in 1959.Extrinsic and intrinsic work values contain some aspect of status work values such
as recognition and advancement while incorporating status work values in other dimensions,
concealing the potential impact of other items related to status work values for generation Y.
Example of studies implementing two-factor theory on Malaysian generation Y are provided by
(Golshan et al., 2011 and Kian & Wan Yusoff, 2012).
On the other hand, Ching and Kee (2012) and Lee et al. (2012) in Malaysia utilised three factor
model, namely, environment, intrinsic and security work valuesto investigate generational
differences. Similarly, Golshan et al. (2011) did not explicitly include status work values, though
some aspects of status work value were incroporated under security work values. Thereofore, status
related work values have received scant attention and it warrants further investigation.
Although generation Y possesses particular work values, organisations may communicate different
values that result in a mismatch or incongruity. Since most those who hold senior positions in
organisations or responsible to supervise generation Y employees belong to a different generational
cohort, for example Baby Boomers, who naturally possess different work values and preferences,
there is a high possibility for generation Y employees to experience less fit at their work place(Wong,
Gardiner & Lang, 2008).Cennamo and Gardner (2008) affirm emprically that generation Y
experiences less fit with regard to status work values when compared with their counterparts
leading to this poor fit in status-related work values thereby increasing the intention to leave.
Kirstof (1996) distinguishes the conceptualization of two types of person-organisation fit,
supplementary and supply-values fits. Subsequently Kristof, Zimmerman, and Johnson (2005)
conclude that supply-values fit that is, meeting the individuals values or needs, has stronger
influence on attitudes than supplementary fit does. Theories of need fulfilment explain the
mechanism of how supply value fit (S-V fit) influences attitudes, in the sense that people will
experience more positive job attitudes when their needs are satisfied. Several studies find a direct
relationship between S-V fit and intention to quit (Westerman & Cyr, 2004 and Westerman &
Yamamura, 2007).
In addition to status work-related values fit issue, the impact of organisational commitment on
intention to quit have been well addressed in the literature of employee turnover, such as the
earliest seminal works conducted by Porter and Steers (1973), Mobley et al. (1979) and Price (1977)
that underpinned work in this area.The relationship between organisational commitment and
intention to quit is consistently found to be negative. Besides, organisational commitment has been
found to predict intention to quit more significantly than job satisfaction does (Salleh, Nair, & Harun,
435

2012 and Feng & Angeline, 2010).Meyer and Allen (1984 and 1990) distinguish between three
components of organisational commitments, namely, affective, continuance and normative
commitments. Meyer & Allen (1997) contended that unlike affective commitment (employees
emotional attachment to the organisation) which emerges through positive work experience,
normative commitment (an obligation to remain in the organisation) is likely to emerge due to
societal norms before an individual even enters an organisation or due to the organisational
socialization (constant communication of the value of loyalty to employees). Therefore, normative
commitment demonstrates a loyalty to organisations, despite the benefits received. It has also
been argued that generation Y employees loyalty (normative commitment) to their organisations is
less than their counterparts since generation Y puts an emphasis on employability and their
commitment is to ones own career instead of organization (Solnet, Kralj, & Kandampully, 2012).
Subsequently, it could be argued that lack of normative commitment attitude could explain part of
the intention to quit within generation Y employees at BPO sector.
However, normative commitment for generation Y and its impact on intention to quit does not
receive considerable attention from researches, except for Lin and Johari (2012) who studied the
influence of the five big factors of personality traits on the multi-facets of organizational
commitment among generation Y workforce, notwithstanding their theoretical framework did not
extend the empirical validation to gauge the impact of the organisational commitment on the
intention to quit.
2.2 Uncontrollable Factors

Uncontrollable factors related to the intention to quit are those factors which organisations have
little or no influence over them. One aspect of uncontrollable factor is the perceived availability of
alternative employment which belongs to the economic labour market school as explained by March
and Simon in 1958.Several studies report mixed results with regard to the impact of the perception
of available alternative employment on intention to quit while several studies affirm the positive
relation. Yet, other studies found no effect. The mixed result could be attributed to the perceived
demand on labours on each country, for instance, the perception of alternative job opportunities
decline when the economy undergoing unemployment (Khatri et al., 2001).
In Malaysia, the service sector passed through unprecedented growth during the recent years where
it is deemed to be the largest growing sector in the country. Usually such a growth is accompanied
with great job opportunities for the new generation workforce (Downe et al., 2012). In view of the
ample opportunities of employment, the intention to quit from BPO sector could be due to the
perceived available alternative employment which is beyond the organisations control. Also, several
studies conducted in Malaysia confounded the term of job-hopping with intention to quit. These
studies regard intention to quit as an interchangeable meaning to job hopping, such as in Manickam
et al.(2012). The distinction between both of them was articulated explicitly in Khatri et al. (2001), as
job hopping was measured through independently constructed scale. They further set forth the
notion of job-hopping and describe it as an attitude or behaviour where employees migrate from
one job to another irrespective of rational motives or better alternatives. It emerges due to personal
characteristics or social influence.
However, Twenge (2010) in reviewing several time lag studies, realised the discrepant results with
regard to confirming that the intention to leave is an increased attitude within generation Y
workforce. Other than that, she agreed that the work values of this new cohort are importantly
different. Notwithstanding, these time lag studies have held the view that job hopping is similar to
intention to quit. The impact of job hopping on the intention to quit has received little attention for
436

generation Y workforce in Malaysia, as most of the time job hopping is described as no more than
turnover. Besides, many Gen Y employees begin their careers with the assumption that they
will change jobs frequently (Kim, Knight, & Crutsinger, 2009).
3. Methodology
The proposed framework below is adapted from Deery (2008) whose framework model is focused
on the hospital and tourism industry. However, based on the preceding literature review, the
proposed framework below is generated to be applicable to the BPO sector, as well as taking into
consideration factors contributed by Generation Y workforce and their attributes.
Figure 1: Proposed framework for identifying factors influencing employee turnover

intention among Gen-Y
4. Data Collection Procedures

In this case study, the types of data expected to be collected and how they are to be collected
include interview sessions involving selected management and employees, focus group discussions
involving employees, questionnaires distributed to employees and gathering information from
various documentations retrieved from selected organizations.
This study is expected to produce outcomes based on the content analysis and high-quality analysis.
The interview sessions as well as the focus group discussion will bring important insights as it will be
the backbone of understanding the issue at hand, which is, the Generation Y workforce and their
working attributes and how this influences their turnover intention.
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5. Expected Outcome
One of the major outcomes that are expected from this study would be answer to the main
objective which is to identify the factors that influence the employee turnover intention among the
Generation Y workforce. This study should be able to highlight important issues pertaining to the
focused workforce and their ability to work in a dynamic environment.
Another important outcome would be in contributing to a better understanding of the importance
of person-organization fit amongst the Generation Y workforce. Also, this study should have the
ability to identify the differences in working attitude of Generation Y compared to earlier generation
as well as to understand on the factors that affect the different generations in the organisation in
determining employee commitment and satisfaction.
Further, this study should have the ability to give important insights on how conducive the selected
industries are, especially for the Generation Y workforce. Overall, it is also hoped that this study will
also be able to produce organizational strategies in helping to manage the Generation Y workforce.
The research team hope to produce insightful suggestions based on the analyses on how this
organization can apply strategies in managing the workforce better.
An important outcome expected from this research would be linked to the respective sector, with
regards to generated strategies or solutions in retaining quality Generation Y workforce. It is hoped
that these strategies, based on the findings of this research will address the issue of intention to
leave as well as reduce the overall turnover rate for the said organization.
Lastly, it is hoped that this study concerning Generation Y workforce and their turnover intention will
be able to contribute to the ever growing body of knowledge in managing the workforce.
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GENERATION-Y TURNOVER INTENTION IN

Raja Rizal Iskandar Raja Hisham

Infrastructure University of Kuala Lumpur

All in-text references underlined in blue are linked to publications on ResearchGate,

Available from: Wan Fadzilah Wan Yusoff

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

GENERATION-Y TURNOVER INTENTION

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2.1 Controllable Factors

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2.2 Uncontrollable Factors

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

will change jobs frequently (Kim, Knight, & Crutsinger, 2009).

Figure 1: Proposed framework for identifying factors influencing employee turnover

4. Data Collection Procedures

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

Eisner, S. (2005). Managing Generation Y. Sam Advanced Management Journal , 4-15.

2nd INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS

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