Since the late 1990s, small and medium enterprises(SMEs) in the information technology(IT) industry have played signigicant roles in Korean economic development, with increasing sales revenues and the number of employees. However they have suffered fr...
Since the late 1990s, small and medium enterprises(SMEs) in the information technology(IT) industry have played signigicant roles in Korean economic development, with increasing sales revenues and the number of employees. However they have suffered from the shortage and turnover of skilled IT personnel. Therefore, the main aim of this study is to identify the strategies for reducing the turnover of skilled labour in IT SMEs, by investigating human resource practices and the turnover intention of IT professionals.
Job embeddedness is a newly emerging concept in the turnover research. It should be better than the traditional attitude variables such as job satisfaction in terms of predicting turnover. Also, it can be developed by human resource practices. Therefore, this study has attempts to test the way in which human resource practices influence on job embeddedness in the IT industry. And it also has tried to investigate how job embeddedness influences on the turnover intention of IT personnel.
To set up the hypotheses of the research which identify the relationships between human resource practices and job embeddedness, six independent variables, which are compensation, recognition, empowerment, information sharing, technical competency development and work-life balance, have been selected through literature reviews.
The hypotheses are as follows. First, compensation will have a positive influence on job embeddedness. Second, recognition will have a positive influence on job embeddedness. Third, empowerment will have a positive influence on job embeddedness. Fourth, information sharing will have a positive influence on job embeddedness. Fifth, technical competency development will have a positive influence on job embeddedness. Sixth, work-life balance will have a positive influence on job embeddedness.
Also, this study set up a hypothesis which identifies the relationship between job embeddedness and the turnover intention. The hypothesis is that job embeddedness will have a negative influence on the turnover intention of IT personnel.
To test these hypotheses empirically, a questionnaire is given to IT personnel in IT SMEs asking their attitudes to their company and the job. The results of this questionnaire are analyzed through utilizing the PLS(Partial Least Squares).
The analysis of 193 respondents shows that compensation, technical competency development, recognition, work-life balance and empowerment practice have significant effects statistically on job embeddedness and that job embeddedness has a negative effect on the turnover intention of IT personnel.
The detailed results of statistical analysis are as follows.
First, it is likely to show that job embeddedness influenced by links dimension and sacrifice dimension has a negative influence on the turnover intention of IT personnel. Therefore, in order to lower the turnover intention of IT personnel, IT SMEs need to develop these dimensions of job embeddedness.
Second, it is shown that technical competency development has the highest influence on the job embeddedness of IT personnel. This result would stem from the technology-oriented nature of IT personnel. In order to build up the job embeddedness of IT personnel, therefore, IT SMEs need to provide related various practices for IT personnel. In particular, government funded training programs, on job training(OJT), and mentoring are helpful to IT SMEs.
Third, it is willing likely that compensation has a significant influence on the job embeddedness of IT personnel. IT personnel has regarded compensation as one of the most important factors in deciding to leave the job since the late 1990s. Thus, to build up the job embeddedness of IT personnel, IT SMEs need to provide a reasonable compensation policy for IT personnel. Considering the relatively poor financial situation of IT SMEs, stock option and profit sharing should be helpful to them. Also, they need to provide the fair reward system.
Fourth, it is shown that recognition has a positive influence on the job embeddedness of IT personnel. Turnover is often determined by human relations, as human relations should be very important in SMEs in general. Therefore, to build up the job embeddedness of IT personnel, IT SMEs need to recognize and value their employees' contributions. Also, it is necessary for IT SMEs to listen to the suggestion of IT personnel. As recognition practice with empowerment can be executed at minimum cost, it should be a good alternative for SMEs.
Fifth, it is shown that work-life balance has a positive influence on the job embeddedness of IT personnel. As IT personnel has been suffering from work-life conflict, it would drive IT personnel to leave the company. Hence, to build up the job embeddedness of IT personnel, IT SMEs need to provide work-life balancing practices for IT personnel. The flexible time system, telecommuting and refreshing vacation should be helpful to work-life balancing.
Lastly, it seems that empowerment has a positive influence on the job embeddedness of IT personnel. Empowerment is able to make an employee feel that the company supports employees. Empowerment can strengthen employee's affective commitment and intention to stay at the company. Therefore, to build up the job embeddedness of IT personnel, IT SMEs need to provide empowerment practices for IT personnel.
To sum up, in order to effectively manage turnover issues in small and medium IT enterprises, they have to develop the job embeddedness of IT personnel through compensation, technical competency development, recognition, work-life balance and empowerment practices.
However, the hypothesis that information sharing will have a positive influence on the job embeddedness is not accepted. Therefore, the research represents that information sharing is not helpful to develop the job embeddedness of IT personnel.