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Retention of skilled employees in SME's sector of textile weaving mills in Pakistan.

Byline: Allah Dad


How an organization manages its human resources is increasingly seen as a source of sustainable competitive advantage (SCA) Small and Medium Enterprises (SME's) face particular challenges in their efforts to develop Human Resource (HR) systems that lead to SCA. Small and medium enterprises (SME's) play a vital role in the economy and are considered to be the backbone of industrial development in the country. The motive is to investigate and explore how Small Medium Enterprises (SME's) can create a viable and conductive environment in this competitive free market economy to maximize its profits by retaining its skilled employees.


A skilled labor force can produce high quality product at a faster rate and therefore it is very important for and organization to retain its employees. This paper looks into the factors that might motivate a skilled labor to leave a company, and how we can curb or try to reduce those de motivating factors and enhance employee contribution towards company success.

Facts and realities

Employee retention brings repeat business and helps a lot a firm to grow its business and profit i.e. employee retention enhances profitability. (Reich Held, 1996) explains that building retention of employees is one of the principal hard-nosed methods by which small business grow big and business grow greater.

According to David Sirota, chairman Sirota Survey Intelligence, whenever an employee quits, it represents a failure of organizations to create an environment of genuine partnership. Employees' needs for achievement plays a critical role in whether an employee will stay at job for any length of time. In this competitive and changing environment resources are limited or fixed. In other words number of customers are limited. The companies need to enhance their market share and profit. The business organization tries to enhance their customer base as well as their skilled employee retention.

Labor in textile can be divided into two categories of skilled labor and unskilled labor. The unskilled labor is non permanent in nature and their hiring / firing process is on make shift arrangements. Thus dealing with unskilled labor is generally hassle free. However, when it comes down to skilled labor, this category of labor is crucial for production efficiencies and quality based products. An organization invests a lot of time and money to train and transform unskilled labor into a skilled one. The benefits of this investment are reaped over the period of the service an employee offers to the company. However there has been a growing trend of switching jobs, which has led to increased cost of production as well as delayed shipments and missing out the deadlines.

The weaving mills of Pakistan comprised of many un-skilled labor, most of them working from many years and it is in their tendency that to shift the job frequently due to many reasons, which are not managed and controlled by the weaving mills owners. It is necessary that to retain the employees in the organization for profitability and success in the business sector.

Two major types of the variables which have effects on the retention of skilled labor in textile weaving mills have been a studied and analyzed. The independent variables include employer obligations, organization image and working environment. The depended variable is retention of employees.

The extensive analysis of these variables have shown that the competitive advantage could only be gained if quality products are offered at competitive prices. However, the highly geared capital structure of the textile industry in Pakistan, poses a great threat to long term sustainability of a company. The broad areas in which skilled labor is employed are, looms operators, quality control, maintenance, industrial engineers, textile engineers, etc. The performance is directly proportional to level of motivation. But this is a genuine example of internal locus of control theory and can be challenged by the followers of external locus of control theory.


It is big challenge for SME textile units to retain the skilled employees. There are multiple factors, which influence the employees to switch jobs. There is no single reason, but a combination of factors could force an employee to sacrifice his loyalty for the employer. The main factors for switching the job are competitive salary packages, organizations brand image and conductive working environment. Meanwhile, the opportunities of higher labor rates offered by MNCs also give threat to SMEs. Their structure threats the structure of SMEs in terms of "loyalty". Similarly perception about sustainability of the organization and practices such as dependent care leave, childcare subsidies, elderly care programs, counseling, flexible working hours, and limiting split shifts are really helpful in retaining the employees in the organization.


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Author:Dad, Allah
Publication:Pakistan Textile Journal
Geographic Code:9PAKI
Date:Jun 30, 2011
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