MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY LE TIEN THANH FACTORS IMPACT EMPLOYER ATTRACTIVENESS AMONG IT ENGINEERS IN HO CHI MINH CITY MASTER OF BUSINESS ADMINISTRATION THESIS HO CHI MINH CITY- 2011 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY LE TIEN THANH FACTORS IMPACT EMPLOYER ATTRACTIVENESS AMONG IT ENGINEERS IN HO CHI MINH CITY MAJOR: BUSINESS ADMINISTRATION MAJOR CODE: 60.05 MASTER OF BUSINESS ADMINISTRATION THESIS SUPERVISOR: DR. HO TIEN DUNG MSc. TA THI BICH THUY HO CHI MINH CITY- 2011 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com i ACKNOWLEDGEMENT I would like to thank my supervisors Dr. Ho Tien Dung and MSc.
Ta Thi Bich Thuy for their intensive guidance and encouragement during the course of my study. I would like to express my sincere thanks to Dr. Pham Quoc Hung and Dr. Nguyen Thi Nguyet Que for their reviews and constructive suggestions.
I would like to extend my sincere thanks to Professor Nguyen Dinh Tho, Dr. Tran Ha Minh Quan, Dr. Nguyen Thi Mai Trang, members of the proposal examination committee, for their valuable comments and feedbacks. I would like to express my sincere gratitude to all of my teachers at Faculty of Business Administration and Postgraduate Faculty, University of Economics Ho Chi Minh City for their teaching and guidance during my MBA course.
Finally, I would like to specially express my thanks to my wife, my family, all of my classmates and my friends and for their support and encouragement. Ho Chi Minh City, 10th December 2011. Le Tien Thanh LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ii Abstract Master Thesis in Business Administration, Summer 2011 Economics University Ho Chi Minh City Attracting and selecting the right types of employees, especially high quality resources have always been a challenge for organization. But recruiting qualified applicants may become increasingly difficult over the next 15 years as demographic and economic factors are expected to create a “war for talent”.
A recent global survey from McKinsey in 2006 revealed that managers ranked “finding talented people” as the single most important managerial preoccupation for the rest of the century. Therefore, talented and skilled person will become rare and precious in the labor market. Thus, knowing what these candidates value in an organization and what attracts them to a company is an important prerequisite for successful recruitment activities. Both qualitative and quantitative approaches were considered in this research.
First, the qualitative research is conducted through making in-depth interview with eight managers of IT/Telecommunication companies to check the content and meanings of words using in the measurement scales. Then the main research is quantitative with 258 engineers who currently work in IT sector. The Cronbach’s alpha is used to measure reliability, the Exploratory Factor Analysis attempts to identify underlying variables and regression analysis is used to test the research model and hypotheses. The result confirms that Interest value, Social value, Economic factors, Development value, and Application value have positive impacts on Employer Attractiveness among IT engineers in Ho Chi Minh City.
Therefore, the benefit of this study will help IT companies to prioritize these critical factors when they want to enhance their attraction and attract talented IT engineers. Key words: Employer Attractiveness, interest value, social value, development value, economic value. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii Contents Page CHAPTER 1: INTRODUCTION .1 The problem statement .5 Scope and delimitations of the study .6 Structure of the study. 4 CHAPTER 2: REVIEW OF RELEVANT LITERATURE .1 Job choice and uncertainty .2 Job choice determinants .4 Instrumental and Symbolic attributes .5 Employer Attractiveness from employee perspective .1 Variables and Hypotheses.
12 CHAPTER 3: RESEARCH METHODOLOGY .2 The pilot research .3 The main research .5 Population and sampling. 19 CHAPTER 4: RESULTS AND DISCUSSION OF THE FINDINGS. 20 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.2 Cronbach’s Alpha Analysis. 31 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS.1 Conclusions of the research .2 Implications of the research.3 Limitations and suggestion for further researches.
i LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com v LIST OF TABLES & FIGURES Table 4.1: Demographic statistics of the respondents .3: Cronbach’s Alpha of all variables.4: Cronbach’s Alpha of Employer Attractiveness after removing variable V53 .5: KMO and Bartlett’s Test .6: Total Variance Explained .7: Rotated Component Matrix .8: The final measurement scale .9: Mean, Standard Deviation and Correlation Coefficient .10: Regression analysis on data of 258 responses. 36 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 CHAPTER 1: INTRODUCTION 1.1 The problem statement Organizations have always been concerned with attracting and selecting the right types of employees, Schneider (1987). Yet, recruiting qualified applicants may become increasingly difficult over the next 15 years as demographic and economic factors are expected to create a “war for talent”, Axelrod et al. Two recent global surveys from McKinsey Quarterly strongly support this view.
While the first, in 2006, found that managers ranked “finding talented people” as the single most important managerial preoccupation for the rest of the century, the second, in 2007, revealed that nearly half of the respondents expect intensifying competition for talent to have a major effect on their companies over the next five years, Guthridge, Komm & Lawson (2008). Therefore, talented and skilled person will become rare and precious in the labor market. Consequently, knowing what these candidates value in an organization and what attracts them to a company is an important prerequisite for successful recruitment activities. Due to the above mentioned cause, it has become increasingly important for organizations to make themselves stand out from their competitors so that they are seen as attractive employers for prospective applicants.
Undoubtedly, this is a challenge because jobs and organizations within the same industry are often very similar, Maurer, Howe, & Lee (1992); Taylor & Collins (2000); Thomas & Wise (1999). According to Barber (1998), early recruitment stages are characterized by an extensive search and screening, the gathering of rudimentary information about multiple opportunities, and little or no personal contact between the parties involved. Considering the importance of applicants’ early impressions of organizations as employers, research by Barber (1998); Cable & Graham (2000); Cable & Turban (2001); Highhouse & Hoffman (2001); Rynes (1991); Lievens, Highhouse, (2003); Lievens at al. (2005) were exploring the content or basis of these impressions.
As in LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 Lievens, Highhouse (2003), organizational attraction was influenced by applicants' perceptions of job and organizational characteristics such as pay, opportunities for advancement, location, career programs, or organizational structure (Cable & Graham, 2000; Highhouse, Zickar, Thorsteinson, Stierwalt, & Slaughter, 1999; Honeycutt & Rosen, 1997; Lievens, Decaesteker, Coetsier, & Geirnaert, 2001; Turban & Keon, 1993). Besides that, in the early stages of the recruitment process, prospective applicants ascribed traits to organizations (Slaughter, Zickar, Highhouse, Mohr, Steinbrenner, & O'Connor, 2001). For example, people referred to some employing organizations as trendy, whereas other employing organizations were seen as prestigious. These studies also discovered that these trait inferences about organizations were related to the image of organizations as employers, with applicants being more attracted to employing organizations having traits similar to their own personality.
For a better refinement from employee perspective, Berthon, Ewing and Hah (2005) suggest five items of Interest value, Social value, Economic value, Development value and Application value to evaluate how an organization is attractive as an employer to potential employees. Vietnam is now one of the 10 most attractive global services locations in the world (A.T Kearney, 2009) and the IT (Information Technology) industry is estimated to grow at a compound annual growth rate of 16% over the period of 2011-2015. With around 10,000 licensed firms to provide services, with around 2000,000 resources (Ministry of Information and Communication, 2011). On May 2011, German-based Bosch Group, a leading global supplier of IT services, opened a center focusing on embedded software and mechanical engineering services in Ho Chi Minh City.5-million center, located at the Saigon High-tech Park in District 9, is expected to employ around 500 local engineers by 2015.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 This recently setup, together with the rising presence of other big IT names like HP, Aricent, Sigma Designs, Texas Instruments, and Simax Global Services in Vietnam lead to competition with local entrepreneurs in terms of human resources. Although many researches in the field of employer attractiveness have been conducted so far, few researches are available in the local context, especially for IT industry. For this reason, it is necessary to conduct research on factors impacting employer attractiveness among IT engineers in Ho Chi Minh City, especially with factors such as Interest, Social, Development, Economic, Application. From this study, companies can make suitable plans in order to enhance themselves and become more attractive to qualified candidates.2 Research questions This paper attempts to determine “What major factors impact employer attractiveness among IT engineers in Ho Chi Minh City?” 1.3 Research objectives The objective of the research is to identify critical factors that affect Employer Attractiveness among IT engineers in Ho Chi Minh City.
The lessons learned from this study would be useful for IT companies in their efforts to attract the best candidates available in the market.4 Research methodology The purpose of this research is to identify the factors impacting employer attractiveness among IT engineers in Ho Chi Minh City by using the EFA method, hence both pilot research and quantitative research are considered. The pilot research is conducted by making an in-depth interview with eight managers of four IT companies in Ho Chi Minh City in order to get their ideas about employer attractiveness factors and meaning of words using in the questionnaires. The questionnaire is adapted from the literature as well as the comments gathered from the interviews. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 In the next step, the sample is collected by sending questionnaires to the relevant people in the industry, who currently working in information technology companies.
An internet based form is also published in Google Docs and share via social networking site of Facebook for additional respondent coverage. Individuals are asked to indicate the extent of agreement or disagreement with the questionnaire items concerning employer attractiveness on a five-point Likert-type scale ranging from 1 (strongly disagree) to 5 (strongly agree). After collecting data, the measurement scales will be verified by using the Cronbach’s alpha ratio and the Exploratory Factor Analysis (EFA) is used to refine the measurement scales. Finally, the hypotheses are tested by using regression analysis.5 Scope and delimitations of the study This research is conducted in Ho Chi Minh City.
The research subject is the IT engineers in multiple IT companies such as IBM, HP, CSC, GCS, Harvey Nash, TMA Solutions and other companies of the industry. The results of similar studies in other populations may differ, and thus the results should not be over generalized. Further, the study used a self-report measure via questionnaire and may have a self- reporting bias. Also, questionnaires do not offer the opportunity to probe deeply into feelings or opinions, nor can items be clarified if there is any confusion as to what an item is intended to mean.
Moreover, other factors not considered in this study may have influences on the respondents that are more important for employer attractiveness measurements. For example, word of mouth, corporate social responsibility (CSR) may have substantial or significant impacts on employer attractiveness.6 Structure of the study The structure of this study includes 5 chapters. Chapter 1 presents information about the problem statement, research question, research objectives, research LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 methodology and scope of the study. Chapter 2 discusses concepts of terms and literature review of Employer Attractiveness, after that research model is developed.
Chapter 3 explains research methodology and research model that are used in the study. Chapter 4 analyzes the result and discussion of the findings.