Job embeddedness of manufacturing SME employees in Indonesia

Date06 January 2020
DOIhttps://doi.org/10.1108/ER-01-2019-0087
Published date06 January 2020
Pages180-193
AuthorFanny Martdianty,Alan Coetzer,Pattanee Susomrith
Subject MatterHr & organizational behaviour,Industrial/labour relations,Employment law
Job embeddedness of
manufacturing SME employees
in Indonesia
Fanny Martdianty
Department of Management, University of Indonesia, Depok, Indonesia, and
Alan Coetzer and Pattanee Susomrith
School of Business and Law, Edith Cowan University, Joondalup, Australia
Abstract
Purpose The purpose of this paper is to explore the applicability of job embeddedness (JE) theory to
employees in manufacturing SMEs in Central Java, Indonesia, and to qualitatively assess the transferability
of the JE framework and its measure to these distinctive contexts.
Design/methodology/approach Data were collected using semi-structured interviews with 42 employees
from 13 SMEs. The JE framework informed development of the interview questions, which focussed on
participantslived experiences. Thematic analysis of the textual data was conducted.
Findings Distinctive characteristics of SMEs, such as resource constraints and managerial informality, and
cultural factors influenced employeesperceptions of the forces that embedded them in their jobs. For
example, participants perceived the psychological costs associated with severing ties with co-workers as a
more salient embedding force than the material costs associated with leaving a job. Additionally, lack of job
fit was not an important turnover determinant, because work was perceived as a duty or obligation, rather
than a personal choice.
Research limitations/implications The findings imply that the JE framework and its measure only
partially explain why employees stay in manufacturing SMEs in Central Java. Accordingly, the original JE
scale items would need to be significantly modified to accurately assess employeeslevels of embeddedness in
Indonesian manufacturing SMEs.
Originality/value Limited research has examined how SME owner-managers can retain key employees,
particularly in Indonesia. This study contributes to an understanding of factors that embed employees in the
cultural context of Indonesia and enhances our understanding of how JE theory operates in SMEs.
Keywords Retention, Indonesia, SMEs, Job embeddedness, Human resource management
Paper type Research paper
Introduction
Many researchers have studied voluntary employee turnover because of its serious
consequences for organisations (Lee et al., 2017). For example, the total costs associated with
turnover can range between 90 and 200 per cent of the annual salary for the position being
filled (Allen et al., 2010). Turnover causes work disruptions and results in loss of tacit
knowledge (Allen et al., 2010) and negatively affects customer service and work quality
(Hancock et al., 2013). Thus, it is not surprising that at least 2,000 articles on voluntary
employee turnover have been published in the past 100 years(Lee et al., 2017, p. 201). Many
organisations struggle to retain their key employees, including high performers and
employees with rare skills (George, 2015). SMEs in particular face many challenges in
attracting and retaining talented employees (Gialuisi and Coetzer, 2013). Compared to large
firms, SMEs invest less in formal training and development, and provide lower levels of
remuneration and limited opportunities for career progression (Pingle, 2014).
SMEs in Indonesia have achieved significant growth over past decades. According to
Indonesias Central Statistical Bureau (BPS, 2013), there were 57m SMEs (including micro
enterprises) that employed 114m people in 2013. In 2017, the number of SMEs grew to 62m
and they provided employment for 116m people (Depkop, 2017). Despite this significant
growth, the lifecycle of SMEs in Indonesia is often very short and the SMEs tend to be
Employee Relations: The
International Journal
Vol. 42 No. 1, 2020
pp. 180-193
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-01-2019-0087
Received 27 January 2019
Revised 12 June 2019
Accepted 17 June 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
180
ER
42,1

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