Investigating the influence of employer branding on employee turnover intentions in the Malaysian manufacturing industry

Post Covid-19, the global job market has been disrupted by the Great
Resignation, where millions of employees are leaving their positions in search of
something more meaningful and better. The manufacturing industry in Malaysia
continuously face the challenge of recruiting, retaining and retraining the right person
for the right job, amidst the ever-demanding and evolving business landscape. The issue
of high employee turnover has a severe negative impact on the manufacturing sector.
Companies are forced to rethink hiring practices and develop innovative strategies to
win in the war for talent.
The aim of this research is to explore the influence of employer branding on
employee turnover intentions in the manufacturing industry in Malaysia. Through the
mediating factor of psychological contract, the study aims to investigate how employers,
utilizing the science of marketing in human resource management, can develop their
employer attractiveness and value propositions to reduce turnover intentions. Through
a quantitative research design, this study collected survey responses from 409
employees in the manufacturing sector and utilizes Partial Least Square approach to
Structural Equation Modelling via SmartPLS to test 11 hypotheses. Results from the
analysis indicated that while economic, social and development value do not have a
direct significant impact on turnover intentions compared to application and interest
value, the psychological contract mediates the relationship between these employer
value propositions and turnover intentions.
A major theoretical contribution of this study is the validation of an integrated
framework for employer attractiveness, turnover intentions and psychological contract
based on the Stimulus-Organism-Response Theory. Practically, this study has
developed recommendations for manufacturing companies, human resource
practitioners and policy makers in transiting from the traditionalist approach to a more
contemporary employer value composition, adopting new technologies and creative
work methods besides moving towards building a relational psychological contract.
Human resource practitioners should focus on more empowerment and engagement
strategies, training and development besides devising more creative talent retention
package. Manufacturing companies must strike a balance between the intangible and
tangible benefits offered by their organizations to effectively and efficiently manage the
psychological contract of their employees, towards an integration of corporate and
employer branding.