Factors Influencing Employee Turnover in Singapore Freight Forwarders

This dissertation investigates the significant issue of high employee turnover within the freight forwarding industry in Singapore, which is a critical contributor to the nation's economy. The study explores the reasons behind employee attrition, such as inadequate compensation, limited career advancement opportunities, and the absence of recognition, which are compelling employees to seek employment elsewhere. The research utilizes a survey methodology to critically analyze these factors, aiming to provide actionable recommendations to mitigate high turnover rates. The research delves into the impact of turnover on training costs, employee productivity, morale, and brand reputation. The dissertation includes a comprehensive literature review, detailed research methodology, findings, analysis, and conclusions. The findings are presented with figures and tables. The study concludes with recommendations for industry stakeholders, limitations, and suggestions for future research to improve employee retention and industry sustainability.

RUNNING HEAD: Dissertation
Dissertation
Name of the Student:
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Abstract:
The freight forwarder industry is one of the most significant industries in Singapore,
actively contributing to the growth of its economy. However, companies have been
experiencing employee turnover issues, whereby factors such as low wages or lack
of career progression have compelled the workers to look for other companies. The
high rate of employee turnover is indeed a problem, as it affects the revenue growth
of the company, while also leading to stalling productivity growth amongst the
workers. Hence, it has become imperative to conduct a research and investigate the
factors leading to such high employee turnover rates in the industry. The absence of
employee growth and training opportunities or absence of employee recognition
might be the common reasons behind this. Hence, the present research intends to
conduct a survey and critically analyse the factors and provide recommendations
which contribute to the problem of high employee turnover rate in the industry. It is a
well-known fact that high rate of employee turnover entails increased expenditure on
fresh training and induction, as well as a reduced rate in employee productivity.
Further, this can also affect employee motivation and brand reputation of the
company at large. Hence, the research will help in exploring the real reasons behind
the high employee turnover in the freight forwarder industry of Singapore and solving
the problem of employee turnover to a considerable extent.
Table of Contents

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Chapter 1: Introduction................................................................................................4
1.1 Background........................................................................................................4
1.2 Aim of the study.................................................................................................6
1.3 Objectives of the study.......................................................................................7
Chapter 2: Literature Review......................................................................................8
2.1 Employee Retention...........................................................................................8
2.2 Freight Forwarder Industry.................................................................................9
2.3 Management practices.....................................................................................10
2.3.1 Personality for the job................................................................................11
2.4 Lack of training and opportunities....................................................................11
2.5 Lack of supervisory figure................................................................................12
2.5.1 Appraisal....................................................................................................13
2.6 Quality of Work environment............................................................................13
2.6.1 Atmosphere............................................................................................... 13
2.7 Lack of career progression and remuneration.................................................14
Chapter 3: Research Methodology............................................................................16
3.1 Research Question............................................................................................. 16
3.2 Research Choice.................................................................................................16
3.2.1 Research Approach......................................................................................16
3.2.2 Research Design.......................................................................................... 17
3.3 Types of data...................................................................................................... 18
3.4 Data Collection Method.......................................................................................19
3.5 Sampling and Data Access.................................................................................19
3.6 Ethical and Data Protection Issues.....................................................................19
3.7 Data Analysis Method.........................................................................................20
3.8 Limitations...........................................................................................................20
Ch 4: Findings & Discussion.....................................................................................21
4.1 Response rate..................................................................................................21
4.2 Profile of respondents......................................................................................21
4.3.1 Findings (Section B)......................................................................................23
4.3.2 Findings (Section C)..................................................................................... 35
4.4 Analysis........................................................................................................... 36
Chapter 5 – Conclusion.............................................................................................38

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5.1 Review of objectives........................................................................................38
5.2 Theoretical review............................................................................................38
5.3 Recommendations...........................................................................................39
5.4 Limitations........................................................................................................39
5.5 Suggestions for future research.......................................................................40
References................................................................................................................41

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LIST OF FIGURES
Figure 4. 1: Frequency distribution of Gender...........................................................25
Figure 4. 2: Frequency distribution of Age Group.....................................................26
Figure 4. 3: Frequency distribution of Nationality......................................................27
Figure 4. 4Figure 4: Length of Service......................................................................27
Figure 4. 5: Response to assignment of mentor as guide.........................................28
Figure 4. 6: Response to whether the employees would like to spend the career with
the company..............................................................................................................29
Figure 4. 7: Response to whether Enjoy discussing the company with outside people
.................................................................................................................................. 30
Figure 4. 8: Response to how much the employee has learned from the present
company....................................................................................................................31
Figure 4. 9: Response to how well the employees bonded with colleagues.............31
Figure 4. 10: Response to present salary.................................................................32
Figure 4. 11: Response to encouraging friends to work in the present company......33
Figure 4. 12: Response to I feel motivated to go to work every day..........................33
Figure 4. 13: Response to It is normal to have high turnover in freight forwarding
industry......................................................................................................................34
Figure 4. 14: Response to High employee turnover is costly and impacts the
organization negatively............................................................................................. 35
Figure 4. 15: Cause of High turnover........................................................................36
Figure 4. 16: There is a high rate of Turnover in your company................................36
Figure 4. 17: Reason for high Turnover....................................................................37
Figure 4. 18: Your experience in the present company is up to your expectation.....38
Figure 4. 19: If did not meet your expection, why?....................................................38
Figure 4. 20: What factors are most important in a job.............................................39

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Chapter 1: Introduction
1.1 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 a 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 organizes 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 organizations
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.

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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
organization and then they are replaced by the other employees. It is the very
important to measure to control the budgets of the organization 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 employees. The labor requirements in Singapore are strict which
have an impact on the cost of labor 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
organizations 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

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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 labor
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 are not available to 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 a minimum.
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 in
Singapore are struggling to attract and retain the right talent. 45% of Asia Pacific
employers admitted that hiring has increased over the last few years which show that
people are leaving the organizations 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 organization. The reasons and factors of the high
turnover of employees are 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).
Problem Statement:
As Asia has merged to be the new economic powerhouse, the Asian market is
experiencing a huge business investment pouring in from the West in the Asian
markets, and needless to state, the brilliant infrastructure of Singapore has made it
the number logistic hub of Asian market. There is no gain stating that Singapore has

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emerged to emerge as the most reliable and trusted supply chain hub, offering global
connectivity to business organizations, investing across the Asian continent.
Although the freight industry is able to contribute an enormous amount of revenue to
the Singaporean economy, the long-term sustenance of the industry is at stakes.
Despite the presence of a developed infrastructure, striking presence of and wide
access and connectivity to the trading and manufacturing hubs, the freight industry is
experiencing a major threat- high rate of employee turnover. Many freight forwarding
companies of Singapore are experiencing a turnover of more than S$5m, and this
high rate of employee turnover is a serious problem, that is also indicative of a
serious condition underlying the apparent problem. Lack of good organizational
culture, absence of career progression opportunities and poor pay scale are some of
most common factors leading to the problem of employee turnover. The freight
industry is still in the growth phase, and though it does have huge prospects in the
coming years, the industry is encountering great challenges in developing. As an
emerging industry, most of the companies still have limited revenue, out of which a
huge amount of revenue is getting spent in the talent acquisition and development of
new employees. As Tara Blythe has pointed out, employee turnover is a huge loss
for any organization, as it would require incurring a huge expense to either acquire
new talent or develop that talent. Most importantly, as those employees go to a rival
company, those losses further get multiplied. The organization not only loses its
valuable knowledge and skills its old employees had, but also loses it to its own
competitors. Further, it has been observed that owing to high rate of employee
turnover, the existent employees have also become unproductive, as it has affected
their efficiency rate in a negative way as well. In such a situation, apart from low
loyalty towards the organizations, most of the employees are unable to deliver high
quality customer satisfaction as well. This is exactly the reason why it has become
imperative to consider and critically assess the factors that are leading to high
employee turnover rates to the organization. The problem statement of the research
is highly significant as it intends to evaluate the exploring the real reasons behind the
high employee turnover in the freight forwarder industry of Singapore and solve the
problem of employee turnover to a considerable extent. By identifying the factors
leading to low employee retention in this industry, the research project will not only
help in reducing the huge talent acquisition expenses incurred by the freight
forwarding companies, but also will help in shedding light on some of the serious

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problems infesting these companies. Such problems may include poor organizational
culture, ineffective management, lack of training opportunities and inability to meet
employee expectations.
1.2 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 a freight
forwarder.
1.3 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
organization
 To make recommendations to the freight forwarders for improving the employee
retention

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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
discusses various factors like lack of supervisory figure, quality of work salary and
benefits, etc. which forces the labor 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.
2.1 Employee Retention
Employee Retention can be understood as the ability of the business or the
organization to hold the talent or employees in the organization and stop them from
leaving their jobs. The retention of employees has been a major issue in the recent
years in the organizations. There are many reasons behind it (Liang, et al., 2015).
The organizations have to put many efforts to encourage employees so that they can
be loyal to the organization 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
issues 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 organization 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 organization and also builds competitive advantage over others in
the industry. The employees in the organization or industry create a culture. If the
employees keep on leaving the organizations consistently, the culture will get

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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 organization.
2.2 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
constitutes 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 are World class infrastructure, global connectivity, and center 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