This Company Managed to Reduce Resignations by Almost 50%

In its quest to keep its employees happy, a company came up with a few thoughtful incentives. Due to the pandemic, employers are having a hard time hiring foreign workers.

However, a US-based multinational corporation (MNC) in Penang has successfully decreased its first-month resignations of rank-and-file local employees from 52% to less than 7% via incentives. 

How Lumileds Malaysia retain its employees

Initially, Lumileds Malaysia Sdn Bhd would offer free lunches to newly hired factory operators during their first week. The company also gives RM200 in their e-wallets weekly on the first month, on top of their gross basic income of RM1,200. 

Lumileds Malaysia's senior talent acquisition executive Noorsafwan Ensah said that many new employees have no money when they come to work and they cannot wait for their first wage to come in. He added that the free housing, transport, and guaranteed overtime are a big help for the workers. 

In addition, new workers receive an extra RM300 if they stay for the first three months, another Rm300 after the next three months, and RM600 if they stay with the company for six more months. This incentive is on top of the "specialist bonus" that they receive every three months, a payout depending on the corporation's profits that range from RM350 to RM800.

There is also an RM16 allowance for the night shift, an RM5 allowance for the morning shift, and a permanent daily meal allowance of RM2.50 (RM3.50 on Wednesday as the canteen serves western food on that day).

With all these incentives, the rank-and-file workers receive a starting gross pay of RM2,400 per month. 

Lumileds Malaysia offers its employees numerous incentives to keep them satisfied. Source: Facebook

Turning from foreign workers to local ones

Lumileds Malaysia's talent acquisition global head Ramesh Manickam said that over a quarter of this corporation's manufacturing specialists used to be foreign workers, but they now make up only about 10% to 15% of overall staff. 

The MNC predicts foreign labour participation to keep declining as entry into Malaysia remains closed to prevent Covid-19 infections.

The managing director of Lumileds Malaysia, Loganathan Muniandy said that in the past, over half of the Malaysians who worked as manufacturing specialists would resign within three days. They now lose fewer than seven out of every 100 workers.

He explained that the manufacturing specialists would work in clean rooms that need them to wear jumpsuits, which included a long list of procedures. He also said that there's a lot of steps to follow when operating the machinery and most new workers could not cope and would quit after two or three days. 

Loganathan said that he owes it to their recruitment team who figured out just what it takes to keep them happy. 

A tough act to follow

However, local industrialists think it is not easy to follow the MNC's steps. Emico Holdings Berhad executive director Datuk Jimmy Ong said that even large hi-tech local firms are unable to match the pay packages of MNCs. He said that the government must allow companies to hire foreign workers again. 

He said that an MNC recently offered an RM4,500 monthly salary to fresh engineering graduates. He added that the demand for workers now is more than the supply and it is at a critical stage. 

Source: The Star

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