LV Thạc sĩ_Retaining employees at Grant Thornton vietnam company

SOLVAY-BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT NATIONAL ECONOMICS UNIVERSITY Vietnam – Belgium Master Programmes MASTERS IN BUSINESS MANAGEMENT THESIS RETAINING EMPLOYEES AT GRANT THORNTON VIETNAM COMPANY LIMITED Prepared by: Nguyen Hai Ha Supervised by: Dr Phan Thuy Chi Hanoi 2010 ACKNOWLEDGEMENT First of all, I would like to extend my gratitude and sincere thanks to Doctor Phan Thuy Chi…, my academic supervisor for her instructions, guidance and inspiration which are very meaningful and valuable for the completion of my thesis A big thank to all our interviewees who took the time from their busy schedules to take part in my thesis Finally, I would like to thank my friends and family for their support and encouragement during my work on this thesis and also throughout my education Hanoi, 2010 Nguyen Hai Ha Executive summary Grant Thornton Vietnam Company limited is a 100% foreign invested company It has been in Vietnam since 1993 The main business activities of the company is auditing, consulting service The company has gained high growth rate in term of revenue and number of clients Up to now, the company has 110 staff and partners However, there are still matter related to high turnover rate existed In addition, the staff turnover are mainly experience staff with the in charge role above, therefore, this is the big failure for the firm With desire to support the firm to find out the cause of high turnover staff and solve this personnel problem, the author designs this thesis to research about the practices of retaining high skilled employees at Grant Thornton Vietnam Literature framework used is theory of motivation, expectancy, and retaining factors Research questions are as follows: • What are the current practices of retaining high skilled employees at Grant Thornton Vietnam? • What are critical issues of Grant Thornton Vietnam regarding high skilled employee retention? • What are solutions for Grant Thornton Vietnam to improve the retaining high skilled employees? After conducting interviews and performing survey, collecting information and analyzing data, the author identifies the main reasons of high turnover as follows: - The working is challenging and attractive but too pressure, imbalance between work and life - Not competitive salary, overtime did not settle in cash - Lack of career development Based on the above reasons, the thesis also proposes solution for changing in the reward system of the company (financial reward and non financial reward) and creates the program to balance the work and life for staff This research aims to help the management level of GT to recognize and consider the factors of retaining high skilled employees Thus, Grant Thornton Vietnam Ltd can decrease their employee turnover and thereby saving both money and time The thesis can be of assistance to the auditing industry and work as a guide in how to work with retaining Contents Page ACKNOWLEDGEMENT Figure 2-1: Organization chart of Grant Thornton Vietnam Co, Ltd 25 Figure 2-2: Research process 27 List of tables Table 1-1: Possible de-motivation consequences Error: Reference source not found Table1-2: Retaining factors Error: Reference source not found Table 2-1: Annual revenue from 2004 - 2009 Error: Reference source not found Table 2-2: Client segmentation Error: Reference source not found Table 2-3: Structure of GT’s workforce Error: Reference source not found Table2-4: Professional salary comparison GT vs big four Error: Reference source not found Table2-5: Professional salary comparison GT vs other industries Error: Reference source not found Table 2-6: Expectation of GT for each career path Error: Reference source not found Table2-7: Employee motivators at GT Error: Reference source not found Table 2-8: Reasons for leaving of formal high skilled employees Error: Reference source not found Table 2-9: Employee demotivators at GT Error: Reference source not found Table 1-1: Possible de-motivation consequences Error: Reference source not found Table1-2: Retaining factors Error: Reference source not found Table 2-1: Annual revenue from 2004 - 2009 Error: Reference source not found Table 2-2: Client segmentation Error: Reference source not found Table 2-3: Structure of GT’s workforce Error: Reference source not found Table2-4: Professional salary comparison GT vs big four Error: Reference source not found Table2-5: Professional salary comparison GT vs other industries Error: Reference source not found Table 2-6: Expectation of GT for each career path Error: Reference source not found Table2-7: Employee motivators at GT Error: Reference source not found Table 2-8: Reasons for leaving of formal high skilled employees Error: Reference source not found Table 2-9: Employee demotivators at GT Error: Reference source not found List of figures Figure 1-1: The Maslow’s hierarchy of needs Error: Reference source not found Figure 1-2: Expanded model of Porter’s and Lawler’s expectancy model Error: Reference source not found Figure 2-1: Organization chart of Grant Thornton Vietnam Co, Ltd Error: Reference source not found Figure 2-2: Research process Error: Reference source not found Figure 2-3: Motivators at GT Error: Reference source not found Figure 2-4: Demotivators at GT Error: Reference source not found Figure 1-1: The Maslow’s hierarchy of needs Error: Reference source not found Figure 1-2: Expanded model of Porter’s and Lawler’s expectancy model found Error: Reference source not Figure 2-1: Organization chart of Grant Thornton Vietnam Co, Ltd Error: Reference source not found Figure 2-2: Research process Error: Reference source not found Figure 2-3: Motivators at GT Error: Reference source not found Figure 2-4: Demotivators at GT Error: Reference source not found List of abbreviations GT HRM Grant Thornton Vietnam Company Limited Human resource management Introduction I Rationale Today in the fast changing world, employees not want to stay in one particular company for their whole life They want to expand themselves by involving their work in various positions of many industries, acquiring new skill sets and new work experiences Their adaptability, which has become an essential part in any job, is shown in the way they adjust to different positions held As businesses flourish and competition getting fiercer than ever, the market for talents is no less competitive Companies increasingly have recognized the importance of human resources and hence are vigorously trying to recruit talented people from other companies by providing better compensation packages and working environment Based on the above reason, keeping employees for longer periods is an important challenge for firms and retaining your high skilled staff is the real issue of the 21 st century Grant Thornton Vietnam operates in auditing industry where retention is really important because in this field, human resources are the key success of the Company At the first 14 years being in Vietnam, the Company grows day by day Currently, to achieve the new vision, to become the leading auditing firm in the world, Grant Thornton Vietnam, a part of Grant Thornton International must significantly focus on development and retention of high skilled employees However, the Company is facing with the following challenges: - Valuable auditors have practical experience and solid background in financial, auditing and accounting and a lot of other fields; they often change their careers to other fields with higher salaries and benefits Sometimes, they leave the Company to work for other direct competitors of the Company - A lot of employees only work in short time in auditing industry when they are very young to get experience and then after or years, they resign - Most of employees in the Company are women, however, they often leave the job when they get married or have babies Turnover rate at Grant Thornton Vietnam is increased as nearly 20 percent per year Many current staff is de-motivated and looking for new opportunities In addition, the staff turnovers are mainly semi – senior level above that is the big loss with the firm This situation requires Grant Thornton Vietnam to review its retaining of high skilled employees for necessary adjustment in order to maintain the good growth and steadily expand its market share And that is my purpose to choose the topic “Retaining employees at Grant Thornton Vietnam Company Limited” for this thesis II Objectives and research questions Objectives: The research has main objectives: • Review retaining factors • Understanding the practices of retaining high skilled employees at Grant Thornton Vietnam (GT) • Propose solutions to improve the retaining high skilled employees in Grant Thornton Vietnam Research questions This research will answer the following questions: • What are the current practices of retaining high skilled employees at Grant Thornton Vietnam? • What are critical issues of Grant Thornton Vietnam regarding high skilled employee retention? • What are solutions for Grant Thornton Vietnam to improve the retaining high skilled employees? III Scope and Limitation The thesis will only focus on resolving the reason of high turnover rate and demotivation of professional staff (from audit and assurance division, corporate finance division and in tax division) in Grant Thornton Vietnam According to the survey and the interview of current staff and former staff in GT, for both Hanoi office and Ho Chi Minh head office The thesis will focus on the high skilled employees who are from semi-senior level above with minimum years experiences IV Methodology and theoretical background The thesis will review some theories related to retaining as following: - Theory of Maslow - Herzberg’s two-factor theory - Expectancy theory - Retaining factors Based on the theoretical framework, the author of the thesis will compare the theoretical framework with the current practices in Grant Thornton, evaluate and propose suggestions to improve the practices In addition, the author will design the interview guideline and survey to collect date for the research subjects The data is collected from: Primary data: - Interview with the HR manager in Grant Thornton Vietnam Ltd - Surveys to some of key employees who had left the firm in the past years and some of current professional staff Secondary data Secondary data is collected from GT’s regulations and documents such as standard of operation, training policies, company brochure, audited report of GT… V Structure outline The thesis will be divided into chapters as followings: Introduction Chapter I: Retaining factors In this chapter, the thesis will review related theoretical tools, available discussion and research regarding retaining of high skilled employees Chapter II: The practices of retaining high skilled employees in Grant Thornton Vietnam Company Limited The company introduction: overview about history and fact sheet Practices of retaining high skilled employees in Grant Thornton Vietnam Ltd Chapter III: Solutions to improve the retaining high skilled employees in Grant Thornton Vietnam Company Limited training policy These courses can be conducted in-house or by external training institutions For professional education programs like MBA, at management discretion, full or partial financial aid may be granted to the employees However, whatever cases it may be, the firm should support the employees in terms of time, e.g granting some study and exam leave, sharing the workload with other colleagues during the peak study time etc Once the training policy is put in place, it should be communicated in details to all employees, including the courses available for employees' selection The employees will then consider the courses available against their needs and decide what courses are most suitable for them - Offer suitable training schedule Career opportunities As mentioned in chapter 2, many staff in GT feels that they are lack of career opportunities because of the slow promotion and a lot of job grades in GT The follow actions would able to improve this situation of GT: - Maximize opportunities for individual employees to develop their skills and move on in their careers Where promotions are not feasible, the firm should look for sideways moves that vary experience and make the work more interesting - Use the fixed job grades, we noted that a lot of job grades but lack of promotion cause de-motivation in the firm - Merge the supervisor grade and assistant manager into one position - Conduct career planning counseling with senior employees The firm can engage an external HR consultant to conduct special testing and interview of identified potential senior employees to determine their potential and possibility to grow into future manager Feedback on the results of the testing and interview will be used as a source of reference for the management to decide who to develop into future manager - Consult employees about their slow promotion Line manager need to perform individual talks with staff which have slow promotion (but in the performance indicators are still good) The employees 47 need know the reason of and understand the difficulties of the firm - International secondment Many GT employees identify a secondment as a key part of their career development, although this program is not suitable for everyone (e.g female employees who are married with children will find it difficult, due to family constraint) More secondment opportunities are needed to meet the employees' career aspiration The management therefore needs to actively work with GT offices across the world to identify possible secondment opportunities, either long term or short term The management should make public the selection criteria and give advice about the process And procedures for secondment application, how to succeed in the selection process Available secondment opportunities should also be communicated to employees –of relevant divisions The management may identify potential candidates for secondment and communicate necessary information to these employees only instead of all employees to shorten the process and make it less cumbersome However, this may lead to a possibility of injustice potential and the risk of arbitrary III.4 Balancing between work and life One of the reasons of high staff turnover in audit firms in general and GT in particular, as discussed in chapter 2, is the high pressure work leading to the inability of employees to balance their work-life As the consequence, some employees choose to leave the firm and move to positions in other organizations that create less work-life stress Work-life recognizes that employees at every level in an organization, whether parents or non-parents, face personal or family issues that can affect their performance on the job A work-life program includes any employersponsored benefit or working condition that helps an employee to balance work and non-work demands Today, work-life programs are regarded as strategic responses to competitive environment and as one of competitive advantage for an organization They can help to attract, retain and motivate employees to work up to their full potential Particularly, attracting and retaining talented professionals is more 48 difficult because of their scarcity and their skills that are general and valued by other employers If the firm offers good work-life benefits, it may be able to retain the topperforming professionals against efforts by competitors to bid them away On the other hand, by making employees understand that the firm is investing in their well-being, the firm will have employees reciprocate by contributing extra efforts beyond their formal job requirements, by developing a concern for the overall success of the organization beyond their individual advancement, and by embracing the goals of the organization The result will be a culture of committed employees, which is desired by most organizations - Staff outing Every year, the firm organizes a company trip to a certain place in the country Currently, this activity is carried out once a year and in a short time (3 days) because the company often uses the luxurious hotels and services It would be better to organize such kind of trip twice a year instead of one and choose the suitable tours for lower fee Besides, the firm should encourage and support staff to organize, maybe in small groups, picnic during weekends when the workload is not so heavy This is a kind of teambuilding activity that enhances the team spirit and makes staff relaxed and refreshed after a stressful working week - Membership/sports and leisure activities The firm should encourage employees to participate in wellness programs, such as being members of soccer, swimming, aerobic, table tennis or tennis teams The firm will reimburse the membership fee for such activities Dancing would be a good sugesstion - Leisure facilities at work The firm can equip the office with some leisure facilities and equipment such as a TV or CD player, so that employees can enjoy some entertainment programs during the breaks This is a good way to relieve the stress at work - Flexible working time and leave In some circumstances, employees may be allowed to work from home, come to work late, take leave during the weekdays, work on weekends and go for a long holiday during the down-time period This flexibility gives the employees the 49 confidence and freedom in handling their work - Annual staff party Currently, GT held annual staff party within employees but not family It would be better if their family members including spouse and children invited to the party The event can make husband and wife understand each other better through interacting with other colleagues and their family members People can share the empathy with their live partners and colleagues through this big gathering - Health insurance for family At present, GT offers life insurance for all staff The firm should provide life insurance for the top and high potential employee’s family (such as their parents, child or husband/wife) III.4 Others Make line managers accountable - for staff turnover in their teams Reward managers with a good record for keeping people by including the subject in appraisals Train line managers in people management and development skills before appointing or promoting them Offer re-training opportunities to existing managers who have a high level of turnover in their team Consult employees - ensure wherever possible that employees have a 'voice' through consultative bodies, regular appraisals, attitude surveys and grievance systems This will provide dissatisfied employees with a number of mechanisms to sort out problems before resigning Where there is no opportunity to voice dissatisfaction, resigning is the only option Be flexible - wherever possible accommodate individual preferences on working hours and times Where people are forced to work hours that not suit their domestic responsibilities they will invariably be looking for another job which can offer such hours Job security - provide as much job security as possible Employees who are made to feel that their jobs are precarious may put a great deal of effort in to impress, but they are also likely to be looking for more secured employment at the same time Security and stability are greatly valued by most employees 50 Conclusion Human resources are valuable assets to GT Highly skilled human resources give the company a competitive edge over its competitors Undoubtedly, GT focus on the recruitment and training processes However, the ultimate challenge that it must face with is how to retain their valuable current employees This thesis attempts to help partly GT to keep talents, to control turnover rate and demotivation of the staff However, the thesis has some limitation: - There is not best method to keep talents, it depends on the firm’s characteristic and environment - This is only the case of GT regarding retaining in the year 2010, therefore, in the future with the changes and adaptation with the firm, GT needs to have another research to find out this matter - The action plan should be made based on the recommendation, however, in the reality, when carrying out the action plan, there will have some feedback (if any), the firm should recognize and revise action plan In the one side, currently, at the current status of GT, by researching retaining factors, having mix-plan, the author believe that recommendations in the thesis will be applied in reality for reducing the turnover rate of GT and making an appropriate retention strategies 51 Reference 1) Stephen P Robins, "Organizational International, 10th edition, 2003 Behavior Pearson Education 2) Cynthia D Fisher, Lyle F Schroenfeldt, James B Shaw, "Human Resource, Management, 4th edition, Houghton Mifflin Company, 1999 3) Sherman, A.W.Jr, Bohlander, G.W Chruden, H.J, Managing Human Resource, SouthWesten Publishing Co., Cincinnati, 1988 4) Hunt, James G and Richard N Osborn and John R Schermerhom , Jr., "Organizational Behavior", New York, John Wiley & Sons Inc., 2000 5) John Ivancevick, "Human Resource Management", Multimedia Business Library, McGraw-Hill Companies, Inc 6) Wayne V Cascio, "Costing Human Resources- the financial impact of behavior in organizations", South Western College Publishing, 4`h edition, 2000 8) Prof Philippe Debroux, "Human Resource Management" lecture notes, Vietnam-Belgium Master in Management program, 7th intake, 2009 9) Derek Torrington, Laura Hall & Stephen Taylor, Leadership and motivation, Fifth Editon 10) Richard M Steers, Lyman W Porter, Gregory A Bigley, "Motivation and leadership at work", 6h edition, the McGraw-Hill Companies, Inc 11) Website: www.accel-team.com www.geocities.com 52 Appendix Questionnaire for current staff QUESTIONARE This questionnaire is designed to help Grant Thornton Vietnam Co.,Ltd to select the right retention strategies to reduce the employee turnover rate and to enhance the staff motivation in the firm It is highly appreciate if you would take part in our survey by completing this questionnaire Your answers will be confidential Thank you for your participation Please place a signal in to the appropriate box or circle  the number for your answer What motivators attract you apply into Grant Thornton Vietnam? Reputation of Grant Thornton  Vietnam Attractive and interesting job  Good working environment  Training development  Career opportunities  Competitive rewards  Corporate culture  Others (please specific)  ………………………………………………………………………………………… …………… Can you give the evaluation of encouraging factors in Grant Thornton Vietnam shown below? Encouraging factors Bad Acceptable Good 53 Attractive and interesting job    Good working environment    Training development    Career opportunities    Competitive rewards    Corporate culture    Balance between work and life    Others    (a) How you comment about the salary package at GT? Not good Good Very good (b) How you comment about the benefit and bonus system at GT? Not good Good Very good (c) Do you think that it is competitive enough to retain high skilled employees?  Yes  No (d) Do you have any suggestion to improve the current situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (a) How you comment about the work itself (in term of nature of work) at GT? Not good Good Very good (b) Do you think that it is one factor that attracts you to work for a longer time in GT?  Yes  No (c) Do you have any suggestion to improve the current situation? 54 …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (a) How you comment about the training policies offered by GT? Not good Good Very good (b) Do you think that they are sufficient for your career development?  Yes  No (c) Do you have any suggestion to improve the current situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (a) How you comment about career opportunities offered by GT? Not good Good Very good (b) Do you think that the career paths are clear to GT’s employees?  Yes  No (c) Do you have any suggestion to improve the current situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (a) Are you satisfy with the working environment and firm’s culture? Not satisfied Satisfied Very satisfied (b) Is there any area need improvement? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (a) What kind of pressures facing you when working in GT? …………………………………………………………………………………………… …………………………………………………………………………………………… 55 …………………………………………………………………………………………… ……………………………………………… (b) Do you have any suggestion for the firm to balance the employee’s work and life? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (a) Are you satisfy with the current performance appraisal process? Not satisfied Satisfied Very satisfied (b) Do you have any suggestion to improve the current situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 10 (a) Are you satisfy with the current management style at GT? Not satisfied Satisfied Very satisfied (b) Do you have any suggestion to improve the current situation? ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………… 56 Appendix Questionnaire for formal staff QUESTIONARE This questionnaire is designed to help Grant Thornton Vietnam Co.,Ltd to select the right retention strategies to reduce the employee turnover rate and to enhance the staff motivation in the firm It is highly appreciate if you would take part in our survey by completing this questionnaire Your answers will be confidential Thank you for your participation Please place a signal in to the appropriate box or circle  the number for your answer 11 What motivators attract you apply into Grant Thornton Vietnam?  Reputation of Grant Thornton Vietnam Attractive and interesting job  Good working environment  Training development  Career opportunities  Competitive rewards  Corporate culture  Others (please specific)  ………………………………………………………………………………………… …………… 12 Which following factors are the reasons of your leaving? Individual matters  57 New job with higher benefit and salary and new  challenges Dissatisfaction of Working environment  Lack of career development  High pressure work, lack of time for family and own life  Uncompetitive remuneration  Others (please specific)  ………………………………………………………………………………………… ……………… 13 Can you give the evaluation of encouraging factors in Grant Thornton Vietnam shown below? Encouraging factors Bad Acceptable Good Attractive and interesting job    Good working environment    Training development    Career opportunities    Competitive rewards    Corporate culture    Balance between work and life    Others    14 (a) How you comment about the salary package at GT? Not good Good Very good (b) How you comment about the benefit and bonus system at GT? Not good Good Very good 58 (c) Do you think that it is competitive enough to retain high skilled employees?  Yes  No (d) Do you have any suggestion to improve this situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 15 (a) How you comment about the work itself (in term of nature of work) at GT? Not good Good Very good (b) Do you have any suggestion to improve this situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 16 (a) How you comment about the training policies offered by GT? Not good Good Very good (b) Do you think that they are sufficient for your career development?  Yes  No (c) Do you have any suggestion to improve this situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 17 (a) How you comment about career opportunities offered by GT? Not good Good Very good (b) Do you think that the career paths are clear to GT’s employees?  Yes  No (c) Do you have any suggestion to improve this situation? …………………………………………………………………………………………… …………………………………………………………………………………………… 59 …………………………………………………………………………………………… ……………………………………………… 18 (a) Are you satisfy with the working environment and firm’s culture? Not satisfied Satisfied Very satisfied (b) Is there any area need improvement? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 19 (a) What kind of pressures facing you when working in GT? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… (b) Do you have any suggestion for the firm to balance the employee’s work and life? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 20 (a) Are you satisfy with the performance appraisal process at GT? Not satisfied Satisfied Very satisfied (b) Do you have any suggestion to improve this situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 21 (a) Are you satisfy with the management style at GT? Not satisfied Satisfied Very satisfied (b) Do you have any suggestion to improve this situation? …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… ……………………………………………… 60 Appendix Guideline for Interview What are your views on employee turnover? Do you strive to identify key contributors? In what way? Do you use appraisals? How and why? Which strategies are used for retention? What is your reward system based on? Which employee demands you feel are of the greatest importance? Why? Please describe the corporate culture in your firm? What are the main reasons for employees staying in or leaving the firm? Which development opportunities are provided at your firm? 10 Please describe the training policies in your firm? 11 Have you notices any change in employee demand? 61 ... the following questions: • What are the current practices of retaining high skilled employees at Grant Thornton Vietnam? • What are critical issues of Grant Thornton Vietnam regarding high skilled... practices of retaining high skilled employees at Grant Thornton Vietnam (GT) • Propose solutions to improve the retaining high skilled employees in Grant Thornton Vietnam Research questions This... high skilled employees in Grant Thornton Vietnam Company Limited In this chapter, the thesis will go to solutions to improve the retaining high skilled employees in Grant Thornton Vietnam It will