1.

2 Problem Statement

At the present time, retail is crucial and important to the economies of most countries, mainly
because of its large impact to the local and international businesses. The retailing sector in
Malaysia has encounter continuous and compelling changes over the last few decades
(Waheed, January 2011). The Malaysia Retailer-Chain Association (MRCA) claims that there
are approximately more than 200 retail chain stores in Malaysia that are made up of at least
6500 outlets in total (Tong et al., 2012).

The retail industry in Malaysia not only represents 20% of the working force
employed in this sector but is also the second contributor to the GDP of the country (Teck
Hong & Waheed, 2011). High turnover rate, lack of competence and skills have let the retail
industry to drops its important role to Malaysias GDP. High employee turnover rate has
increasingly been an issue of interest not just in developed countries, but also in the
developing countries (Rohani Salleh, 2012). High employee turnover rate in Malaysias retail
industry has become an extensive issue that needs to be addressed (Salleh, Nair & Harun,
2012). The retail sector also is consider as a major element of economic growth and stability
in the country. Which means that this industry cannot be underlooked by the government as if
the competency increasing, so does the GDP of our nation. However, limited number of
talented people with high competence level, performance and set of skills, have let the
industry slowly drop its productivity of their mainly income to attract the attention of
consumers and create new ideas for the organizations.

In Malaysia, the average yearly turnover rate of retail employees particularly was
18% from 2010 to June 2011 (Malaysian Employers Federation, 2004). Similar to other
industries, the retail industry is often faced with high turnover rate in both management and
sales employees which, in return, influenced company profit (Saleh, Nair & Harun, 2012).
Retail companies need committed employees to increase productivity or pursue growth
opportunities. Shortage of employees may affect operations and the profitability of retail
businesses. This issue in the retail industry warrants attention from the practitioner in the
hypermarket company. Despite the retail industry being the lead of domestic consumption
that contributes about 60-70% of the Gross Domestic Product (GDP), the annual retail
industry employees turnover rate was 18% from July 2010 to June 2011 (MEF, 2004;
Department of Statistics Malaysia, 2013; Inside Malaysia, July 2012).

From the perspective of human resource management, high turnover rate is a serious
issue due to several reasons. First, high turnover rate has financial consequences. When
employees leave, recruiting, selecting, and training of new employees are necessary. Second,
employee turnover may disrupt companys productivity and thus performance, especially
when it involves critical positions in organizations. Companies that are not able to reduce
their employee turnover rate will likely lose their competitiveness in the long period of time
(Saleh, Nair & Harun, 2012). Besides that, high employee turnover rate will damage the
organizations image, reduce chances of improvement, delaying implementation of new
programmes, and degrades productivity (Abbasi and Hollman, 2000; Ghosh et al., 2013).
High turnover also fosters a sense of discontinuity in the workplace hence unsettling
managers and employees.

Retention of talented employees has become an even greater challenge confronting

human resource practitioners because talented applicants in the worldwide job skills market
have a luxury of choice. Although many have been done to look into the issue of talent
management implementation in order to complement the abilities and capabilities of the
organizations, where there is a limited study on the role of talent management towards
employee retention (Baharin et al., 2017).

There are particular human resource (HR) practices employed by the organization to
increase the retention level (Khan et al., 2014). For example, talent management that can
develop variety of traits, skills and abilities. The HR manager must know how to attract and
retain good employees because these employees can make or break the organizations
goodwill and image (Wisnefski, 2008; Rasli et al., 2014). Therefore, there is a need to study
on this industry since this industry is one of the main contributors to Malaysias GDP.
Throughout the implementation of talent management, values, skills and traits such as
competency can be develop on employees and retain them on the organizations as well as
avoid and reduce the high turnover rate.