The shift from a production-based to a knowledge-based economy has been
widely discussed (Drucker, 1993; Stevens, 1996; and Switzer, 2008). Like other developed
and developing nations, Malaysia has targeted this shift as an opportunity for
economic expansion (Cheng, 2001; and Abdulai, 2004). Today, the services sector is the
largest sector in the Malaysian economy, having grown steadily for a thirty-year period and
now surpassing the manufacturing sector as the largest single component of the
GDP. Although current world economic pressures have deflated earlier growth projections,
it is still estimated that the services sector may contribute up to 59.7% to the
country's GDP by 2020.
The Malaysian service industry, in addition to contributing the largest portion of
the country's GDP, is also the major generator of jobs, accounting for more than 50% of
total employment for the year 2007 (Bank Negara Malaysia, 2007). The success of the
service industry, in Malaysia and elsewhere, is largely reliant on the recruitment and
retention of service industry professionals who have the right mix of skills and attributes.
Presently, however, service companies face a looming `talent crunch', caused by both
shortages and deficiencies within the world-wide workforce (Doherty et al., 2007; Harris, 2008; and Manpower, 2008a). High employee attrition rates have been recorded widely within
the service industry and compound difficulties in establishing a sustainable
competitive advantage (Khatri et al., 2001; Anderson, 2005; and McCabe and Savery, 2007).
Attracting the right service professionals, training them and motivating them to stay long
enough in a company to recoup recruitment and training costs is an escalating challenge
for managers of service industry firms (Brooker, 2008; and Manpower, 2008b).
Employee attrition can be attributed to both push and pull factors. Push factors
involve employee intentions to switch jobs as a result of situational elements, and are
usually related to job dissatisfaction. Pull factors, on the other hand, act as driving forces
that attract an individual toward alternative work placements. The purpose of this study is
to identify push and pull factors influencing attrition among young,
well-educated professionals in the context of the Malaysian service industry. Since push and pull
factors are within the control of employers (Capelli and Hamori, 2006), suggestions for
reducing employee attrition in service organizations are also provided. The remaining of this
paper is structured as follows: First, the literature relevant to the human resources
practices in the service industry particularly related to attrition intention was reviewed.
The methodology section provides the details concerning the research design, variables
and measurement for the study. Finally, the results are discussed, followed by
conclusion, implications and recommendation for future research.