Factors Affecting Employee Retention: Singapore Freight Forwarder

This dissertation investigates the factors affecting employee retention within the Singapore freight forwarder industry. It begins with an introduction outlining the industry's importance to Singapore's economy and the challenges of high employee turnover. The study reviews existing literature on employee retention, focusing on factors such as management practices, lack of training, quality of work environment, and career progression. The research aims to identify the key reasons behind employee turnover in the Singapore freight forwarder industry and provides recommendations to improve employee retention strategies. The dissertation also highlights the industry's competitive landscape and the need for companies to attract and retain skilled talent in a tight labor market. The study uses questionnaires to gather primary data, and it provides recommendations to help companies combat high turnover rates and improve their overall performance in the global market. This work aims to address the critical issue of retaining skilled employees in this sector.

RUNNING HEAD: Dissertation
A Study on the Factors affecting Employee retention
within the Singapore freight forwarder industry

Dissertation 1
Table of Contents
Chapter 1 Introduction..........................................................................................................................2
Background........................................................................................................................................2
Aim of the study................................................................................................................................4
Objectives of the study......................................................................................................................4
Chapter 2: Literature Review.................................................................................................................5
Employee Retention..........................................................................................................................5
Freight Forwarder Industry................................................................................................................6
Management practices......................................................................................................................7
Personality for the job...................................................................................................................8
Lack of training and opportunities.....................................................................................................8
Lack of supervisory figure..................................................................................................................9
Appraisal........................................................................................................................................9
Quality of Work environment..........................................................................................................10
Atmosphere.................................................................................................................................10
Lack of career progression and remuneration.................................................................................11
References...........................................................................................................................................29

Dissertation 2
Chapter 1 Introduction
Background
The focus of the study is on the freight forwarders in Singapore and how this industry is
facing the problem of high employee turnover. The factors which create problem in retaining
the employees will be discussed in detail by going through the primary as well as secondary
sources. The aims and objectives of the study will be achieved by the end of the study.
Freight forwarders are also known as the agents which organises the shipments for the
individuals or the companies for transferring it to the markets or final distribution point. The
forwarders have contracts with the multiple carriers which move goods from place to another.
It acts as an expert in the network of logistics. They carry goods through different modes of
shipping like railways, roadways, airways or any other. Freight forwarding is done for
providing efficient and cost effective transfer of goods in a good condition for the individuals
or the companies. They handle the negotiations, regulations of customs and use latest
advances in the technology to make the processes better (Marder, 2016).
Asia is rising as the new economic powerhouse in the world and the organisations
from across the world are expanding their businesses in Singapore. Singapore is in the heart
of Southeast Asia and it is with the connection to the major shipping lanes which makes it an
important logistics hub for the world trade. It is the prime location for major logistics firms.
The freight forwarders in Singapore are secure and trusted and are developing because
Singapore is developing a trusted supply chain. Singapore is friendly with the import/ export
requirements and procedures. The companies have efficiencies in obtaining the permit for the
goods. The country provides a platform to the freight forwarders which simplifies the
documentation, saves time and improves the efficiency of the freight forwarders. The freight
forwarders receive the trade permits easily and it is a growing industry. Despite having such
facilities and qualities, there is a huge problem of employee retention which the industry is
facing in Singapore. There may be many reasons behind it. These factors will be discussed in
the study to know the real reasons behind the high employee turnover in the freight forwarder
industry of Singapore (Banker, 2015).
Employee turnover can be referred to the percentage of workers who leave one
organisation and then they are replaced by the other employees. It is very important measure

Dissertation 3
to control the budgets of the organisation or industry and to identify the reasons of low talent
in the industry. It can also be referred to the rate at which the employers lose its employees.
As per the report of Logistics (2014), Singapore is a mature market and here, the businesses
need to manage their cost of employment. People are facing the work Visa challenges which
is also creating frustration for the employers. The labour requirements in Singapore are strict
which have an impact on the cost of labour because the cost of wages for the domestic and
local employees increases. The employees get choosy about the requirements and needs like
distances of travel, payments, job roles, facilities and more. To gain better salaries and wages,
the employees often leave the employers and join another one which has now become a trend
in the country (Aguenza & Som, 2012).
There are several studies conducted on the employee satisfaction and retention in the
industry and it is found that 95% of the human resource leaders admit that when the
employees are exhausted physically or mentally, they tend to leave their jobs which are
increasing the employee turnover rate. The prolonged stress and frustration in the job
contribute a lot to the burnout of employees. As per Garton (2017), employee burnout is a
reason why the companies are bearing so much of costs. Not only costs but low productivity,
loss of talent and high turnover of employees are some of the evils which affect the overall
performance of the organisations and the industry.
Some of the challenges which the freight forwarder industry of today is facing include
competition, volatility of the rates and the most important high turnover of employees.
According to Marder (2016), the industry is moving with fast pace and they are facing
competition because of which they need to manage their internal costs and management so
that they can fight the external challenges in the industry and global market. All the logistics
companies are facing the problem of attracting and retaining the right talent. In Singapore, it
is becoming the greatest challenge nowadays. The unemployment rate of Singapore is as low
as 2.2% but still acquiring n retaining the developed candidates is becoming tough. It is
because the labour market of Singapore is tight. 67% of the employees in Singapore are
looking to change their roles in coming years. It is obviously because of their dissatisfaction
with the current roles and many other reasons like salary hikes, cost of living, promotion,
recognition, etc. The logistics or the freight forwarder industry requires certain skills and
talents which is not available with everyone. The companies working in this industry are
needed to adopt some programs and methods which nurture the employees and help them in
creating their interests in their jobs. It will help in keeping the turnover rates to minimum.

Dissertation 4
The overall attrition rates in Singapore are growing and this could lead to the overall
increasing hiring costs and talent gaps will be created among employees (Hay Group, 2017).
The highest turnover in employees is recorded in Food and Beverage industry and then in
Freight forwarding industry in Singapore i.e. 19% and 14.7% respectively. As per the survey
conducted by Wills Towers Watson 2016 Global Talent Management and rewards, more than
65 per cent of the employees of Singapore are struggling to attract and retain right talent.
45% of Asia Pacific employers admitted that hiring has increased over the last few years
which show that people are leaving the organisations and joining other ones. The top drivers
of attraction are salaries, security in jobs, work environment, and challenging work. It is
found that only 4 out of 10 employees in Asia Pacific reason are highly engaged with the
employers. This clearly shows that how Freight forwarding industry is facing the problems in
retaining the employees. There is a room for improvement which should be adopted by the
industry. They could adopt certain measures which could help in retaining the best talents for
the organisation. The reasons and factors of the high turnover of employees is discussed in
the further study and the recommendations are given through which the industry could sort
out the problem and improve its productivity and performance to compete in the global
market (Farrow, 2017).
Aim of the study
The main aim of the study is to find out the factors which are leading to the high employee
turnover in the freight forwarder industry of Singapore. This will be achieved by conducting
questionnaires with employees working in freight forwarder. The aim is also to make
recommendations for employee retention for freight forwarder.
Objectives of the study
The objectives of the study are:
 To review the literature for the purpose of identifying the factors affecting the employee
retention in the Singapore Freight forwarder industry.
 To analyse the factors which contribute to the decision of employees leaving the
organisation

Dissertation 5
 To make recommendations to the freight forwarders for improving the employee
retention

Dissertation 6
Chapter 2: Literature Review
This chapter will provide a detailed information and data about the factors which are
affecting the employee retention in the freight forwarder industry of Singapore. It discuss
about various factors like lack of supervisory figure, quality of work salary and benefits, etc.
which forces the labour to leave their present job and join the better available opportunity.
This literature review has been developed to accomplish the aims and objectives of the paper
and to find out the real factors behind the problem.
Employee Retention
Employee Retention can be understood as the ability of the business or the organisation to
hold the talent or employees in the organisation and stop them from leaving their jobs. The
retention of employees has been a major issue in the recent years in the organisations. There
are many reasons behind it (Liang, et al., 2015).
The organisations have to put many efforts to encourage employees so that they can
be loyal to the organisation and work dedicatedly. Hiring of new employees every now and
then involves a lots of cost for the company and is also one of the biggest issue for the
sustainability of the company but on the other hand, if the organisation retains the best and
valuable employees it is cost effective for the company and also increases its performance
because with the experience of the employees, the performance of the company increases.
The industries are going through the war of talent in which they have to manage the burnout
of employees, their competency and their interest in the organisation to work (Anis, et al.,
2011).
To this Rono & Kiptum (2017), further adds that the retention of employees is very
significant for the development of employees. It helps in achieving the goals and objectives
of the organisation and also builds competitive advantage over others in the industry. The
employees in the organisation or industry create a culture. If the employees keep on leaving
the organisations consistently, the culture will get affected. Also, if the employee turnover is
very high it will increase the costs of the business which could ultimately reduce the profits
of the organisation.

Dissertation 7
Freight Forwarder Industry
In 2012, the freight forwarder industry of Singapore was ranked as No. 1 amongst the 155
countries across the world as per the Logistics Performance Index 2012. This is because
Singapore is at the heart of South East Asia and it is a hub of trade at the global level. It also
has good expertise and knowledge in international shipping and transportation. There are
more than 7000 companies working in this industry in Singapore which provides employment
to around 180000 people. This number constitute to around 9% of the total workforce in the
country. The major companies ruling over the market includes DHL, FedEx, UPS, Nippon
Express and Toll Logistics. The industry is the pillar to the economy of Singapore and it
accounts a good percentage of GDP of the country which makes it important. As already
discussed, the industry is ranked among the top logistics industries of the world, the reasons
behind this is World class infrastructure, global connectivity and centre of the shipping lanes
(Parvin & Kabir, 2011).
Figure 1: Rankings of countries in Logistics Performance Index
Source: Yuling (2014)
As per Banker (2015), the freight forwarder industry is changing with the time. The
industry operates on the basis of demand and negotiations. Despite enjoying such a good
position across the world, the industry is facing the challenge of employee retention. Modern
freight forwarding in Singapore is facing a tough challenge of keeping their talent engaged in
the business. According to Brown (2014), the employee turnover in Singapore has increased
in 2015 than 2014. The economic growth is good but the turnover of employees is increasing

Dissertation 8
and this has become a critical issue for some of the industries like freight forwarding because
with employee turnover, the industry loses its talent, experience and knowledge management.
The five factor that will be discuss in the literature review are as the conceptual framework as
shown below. This five factor are what the author thinks that contribute to employees leaving
the organisation and organisation should pay more attention on.
This five factors will be incorporated in the questionnaire survey to find the accuracy of the
findings.
Management practices
The management practices include the methods or all those tactics which the managers or
leaders involve in their daily practices to improve the work effectiveness of employees or to
develop them. Theses practise may include the training and development activities of staff,
introducing technology and innovations, empowering the staff and more. Kusluvan (2003)
mentioned that organisations with good management practices are more likely in retaining
employees. Hence, it is very important that the management design and setup systems which
aid in employees retention. The management should have the quality to select the best match

Dissertation 9
for the selected job so that the work can be done properly and the efficiency can be improved
(Ozolina- Ozola, 2014).
Personality for the job
Arvey, Bourhcard, Segal and Abraham (1989, cited in Deaux and Synder, 2012) mentioned
that just one level of Personality clash in the organisation with colleagues or employees might
be the reason which lead to job dissatisfaction (Taylor, 2002). The Freight forwarder industry
lacks in hiring the best employees for the job and they also lack in providing them the
development activities which makes them exhausted mentally and physically. This is
employee burnout which ultimately leads to their loss of interest from the job. If the
organisations in the industry will be able to manage their management practices, they will be
able to retain employees in the business and industry. The lack of good management practices
leads to the increasing employee turnover. Various studies have shown that if the
organisation is committed for their employees, they are able to keep their employees for a
longer period of time. Also, high commitments from both the sides have positive impact on
the job performance of the employees. This shows that how poor management practices may
lead to high employee turnover in freight forwarder industry (Muir & Li, 2014).
Lack of training and opportunities
The freight forwarder industry needs training and development activities for its employees so
that they could understand the terms of shipping, negotiations and other skills. They also need
to understand the interpersonal and communication skills to build relationships with different
agencies in order to keep the business on. Timmermann (1998, cited in Rauner and Maclean,
2008) mentioned that training produce benefits both for employers and the society.
Employees who undergo training usually produce positive economic effects for the company
they work in. People work without any training which lowers down the performance and also
the confidence of people. This is due to the lack of training might cause employees to be less
confident in the job they do (Ward and Daniel, 2012) This motivates them to leave the
industry to join some other industry where they could work with efficiency (Janjhua,
Chaudhary & Sharma, 2016).
Training and development activities could be beneficial to the employees and also to
the societies. It has been found and researched that when the employees are provided with
training and development processes, their job satisfaction level increases and the job turnover

Dissertation 10
rates decreases to a significant level. It is considered as a key retention factor for employee at
every stage in the organisation. There are many courses in Singapore which are provided to
the employee to get a good knowledge about the industry so that once an employee enters the
industry does not think of leaving it (Miller, 2015).
Lack of supervisory figure
Fisher (1985, cited in Wanberg, 2012) believe that a supportive supervisor is important due to
their authority and power to provide rewards and job allocation will allow employee to
become more confident and comfortable in the things they do. Employees who receive
supervision from a mentor figure will more likely to remain in the organisation(McManus
and Russell, 1997 cited in Anis et al., 2011). As compared to employee who did not receive
supervision, where they will likely look elsewhere for job opportunities as they feel they
can’t relate to the job.
If the relationship between the superior and subordinate is not good and healthy, an
employee would feel neglected and dissatisfied and this becomes one of the main reasons to
leave the job. A lack of good and supportive supervisory figure can lead to high turnover
rates of employees in the industry or business. To access support from the senior
management, the employees have to be patient. The freight forwarder industry of Singapore
is wide and huge but it lacks a strong supervisory control over the employees which makes
the employees aimless and they also lack in achieving their career goals. It plays a big role in
the motivation of employees (Muir & Li, 2014).
Appraisal
An appraisal, yearly reviews or performance review (Sims, 2002) is the review of employees
based on their job performance. Appraisal not only help in rating the employees but also help
the management to find out which are the area where the employee can improve. An
appraisal also help in finding a suitable candidate for promotion.
It is vital for managers to conduct yearly appraisal as it is an opportunity for the manager and
employees to communicate. It will also help in pay and incentive adjustment for employees
whose hard work and effort justify the same (Bose, 2012).

Dissertation 11
Quality of Work environment
Studies shows that quality of work environment are one of the factors affecting recruitment
and retention in an organisation (Campbell and Dix, 1990). Work environment is very crucial
for the development of employees and for their retention of employees. If an organisation has
supporting and positive working environment, the employees would not be motivated to
leave the organisation. Freight forwarder industry of Singapore is huge and with this position
comes huge responsibilities. The employees are required to give longer working hours, hey
have to handle more pressure and have to take more challenges in the jobs. This shows that
the employees become exhausted when they work with their full potential all the time without
any learning and positive environment. The workers are only engaged with their own work
and have no time for doing extracurricular activities which builds up confidence and
positivity in the workers (Sinha & Sinha, 2012).
Atmosphere
Working atmosphere is a factor that can easily affect the working individual as well as the
whole organisation. It play an important role in the employees performance. The better the
working environment, the happier the employees will be and this will in turn bring positivity
to the company in turn of performance and morale (Desai, 2009). A positive work
environment will bring out employees full potential capacity. Also, they will also more likely
to stay with the organisation as they enjoy working there (Find Employment, 2013)
A negative work environment will cause communication breakdown and loss of trust between
employees. Thoughts and ideas will no longer be shared among co-workers and this will
affect their loyalty towards the organisation. A poor working environment will also result in
high absentees, inefficiency and contribute to employees turnover rate which may be a result
of communication breakdown among co-workers (Nichols and Davis, 2010).
Jack Hasson (Carson, 2004) mentioned that a working environment that is enjoyable will
have positive impact on employee retention as that is where the employee spend most of their
time. An enjoyable working environment will make employees feel at home and in turn,
employees will look forward to returning back to work and this will benefit the organisation
positively.