Intention to Hire Older Workers: A Predictive Model

Abstract

Malaysia is currently facing a serious labour shortage as a result of declining employment participation rate from its ageing population. Nevertheless, the utilisation of skilful and experienced older workers requires the willingness of business organizations to hire them. Therefore, this paper examines managers’ intention to hire older workers by using an extended model of the Theory of Planned Behaviour (TPB). Past experience is an additional variable used beside attitude, subjective norm and perceived behavioural control in the TPB. A quantitative method of research is adopted through 55 well-prepared questionnaires. The model and hypotheses are tested using partial least square - structural equation modelling analysis. The result of the survey involved 468 hiring managers from 11 industries and 9 states in Malaysia. The research model accounted for a moderate portion of the variance in future hiring intention ( R 2 =0.392). The findings suggest that the predictive component of attitude, subjective norm, and perceived behavioural control are related to the future hiring intention whereas the past experience predictor found no relation. This study's result makes a valuable theoretical contribution as it positioned at age discrimination on the employment of older workers, and serves to future research with reasonable modification on the areas. This study has practical implication at two-levels: bring awareness to business organizations on ageing workforce and preparatory actions on good workplace practices to eliminate inequalities in the age-diversified workforce.

Keywords: Intention to hireolder workersageing populationtheory of planned behaviourpast experience

Introduction

Malaysia's realization of becoming a developed and high-income nation is confronted by a realistic issue of labour and talents shortages. The gradual increased in the ageing population against declining total population growth, and a rise in the 15-year-old and above age groups indicates a continually ageing population growth is to be expected in the coming years. It is estimated that by 2035, 15% of Malaysian population will be aged 60 and above (Tenth Malaysia Plan, 2011-2015). Demographic ageing brought with it shortage in labour supply, higher expenses on Government's spending such as in medication and medical services, amenities and other welfare services. At the same time, due to retired workers either have no income or little income insufficient to qualify them for taxation; all these affect the overall economic well-being.

Older labour force participation is much needed as part of the solution to the nation’s labour shortage. As such, the older population emerges as an important labour market segment since they are much healthier, better educated and lived longer compared to their predecessors. Demographic changes created an older workforce and age-related issues which concerned older workers' employment which could only be overcome with employers’ understanding of these workers’ workplace attributes. Hence, this valuable older human resource could be of great utilization with the willingness of employers to hire them. Therefore, the question as to whether a substantial part of the nation’s labour shortage can be solved is very much dependent on hiring managers in business organizations who played a crucial role in the recruitment and selection of their workforce.

Within this paper, background on the labour shortage faced by business organizations, continual reliance on foreign labour, employers’ unawareness of ageing population’s issues, and the impact on the nation overall economic are provided. The study framework is shown in Figure 01 . Further, evidence on test results such as reliability, validity, relationships of the studied variables, implication, contribution, future research directions are explained accordingly.

Research background

This research investigated the relationships between managers’ attitude towards older workers, their subjective norm and perceived behavioural control towards hiring older workers, and their past experience with older workers; and whether, all these will in turn influence managers’ intention to hire older workers. The targeted respondents are hiring managers from 11 industries located in Perlis, Kedah, Pulau Pinang, Perak, Kuala Lumpur, Selangor, Melaka, Negeri Sembilan and Johor of West Malaysia. The older workers referred to a group of workers currently under non-managerial employment status or active job seekers aged 50 and above, this group included both Malaysian males and females, of all ethnicity in the country. Managers' future hiring intention referred to the 12 months from their participation in the survey.

Problem Statement

Against the background of acute labour shortage, low birth rate, ageing population, undesirable labour force participation rate of older workers; one potential labour source expected to ease the labour problem should be skilful and experienced older workers. However, as labour shortage persisted, employers are expected to continue to fill vacancies with foreign labour. In 2016, Bank Negara's report confirmed an increased reliance on foreign workers in the labour-intensive sectors (King, 2017). The low-cost unskilled foreign labour also delayed employers' move to invest in mechanization. The long term goal should be to utilize available internal talents effectively which include the re-employment of an experienced older workforce. As such, the Eleventh Malaysia Plan (2016-2020) made a deliberated point on the gradual reduction on reliance of foreign labour by limiting the ratio of foreign labour in a company to no more than 15% to the total workforce (Jabatan Penerangan Malaysia, 2016). Hence, the above justified this present study on the hiring intention of managers in business organizations.

Given the lack of awareness of employers and employees on an ageing population, the impact on labour shortages and the nation’s overall economic well-being, these posed significant gaps in understanding the attributes of older workers and the impending direction of future workforce diversification trends. Therefore, it is crucial to investigate whether the identified predictors of managers’ attitude towards older workers, their subjective norm, perceived behavioural control and past experience with older persons are related to their intention to hire older workers. Managers’ positive hiring intention could impact not just older workers’ work lives, but also organizational performance, the economy and society as a whole. Hence, this further justified the present study on managers’ hiring intention. The research gap is filled by applying an extended Theory of Planned Behaviour (TPB) which draws on 55 structured questionnaires collected from a total of 468 respondents of 11 industries in 9 locations.

Research Questions

The questions addressed are:

Q1: Whether managers’ attitude towards older workers, their subjective norm and perceived behavioural control are related to their future intention to hire older workers?

Q2: Whether managers’ past experience with older persons is related to their future intention to hire older workers?

Development of Hypotheses

Attitude towards behaviour is on the degree of favourable or unfavourable evaluation of a particular behaviour (Ajzen, 1991). From the various extensive studies on the causal relationship between attitude and behavioural intention indicated that attitude is the best predictor of a behavioural intention (e.g. Earl et al., 2017; Karpinska et al., 2013; Lau et al., 2018; Lu et al., 2011; Ng & Feldman, 2013). The present study defined attitude as favourable or unfavourable consequences of managers in their hiring of older workers. The hypothesis is formulated: H1a: There is a relationship between attitude and managers’ future intention to hire older workers.

Subjective norm is defined as a person's perception of most people who are important to him thought he should or should not perform the behaviour in question (Ajzen, 1991). The expectation of such important persons closed to that individual often added pressure onto the desired behaviour, hence, high subjective norm often resulted in his high willingness to perform the action desired (Vansteenkiste et al., 2015). In Lau et al. (2018) and Lu et al. (2011), subjective norm was found to be strongly related to managers' intention to hire older workers. Therefore, the present formulated hypothesis predicts that a manager who perceived these important reference groups agree to his performance to hire older workers. Hence, Hypothesis H1b is: There is a relationship between subjective norm and managers’ future intention to hire older workers.

Prior researches confirmed that perceived behavioural control is related to behavioural intention and that the correlation is significant (Fraser et al., 2011). The present study defined perceived behavioural control as the perception of managers on how easy or difficult for them based on their organizations’ available resources to intend the hiring of older workers. The hypothesis is formulated as H1c: There is a relationship between perceived behavioural control and managers’ future intention to hire older workers.

Previous researchers included past experience in TPB to give extra weight to prove its powerful effect as a predictor of behavioural intention and the results indicated that inclusion had significantly improved the behavioural intention (e.g. Lu et al., 2011; Mohmed et al., 2013). The hypothesis is formulated as H2a: There is a relationship between past experience and managers’ future intention to hire older workers.

Purpose of the Study

Generally, the knowledge of what factors affect managers' hiring intentions in building up their additional manpower pool to ease a labour shortage problem is still very much lacking at the moment. With that, this study attempts to predict managers' future hiring intention of older workers by applying the Theory of Planned Behaviour (TPB) (Ajzen, 1991). This present study model used intention-based human behaviour with the original variables of attitude (ATT), subjective norm (SN), perceived behavioural control (PBC) from TPB, and extended it to include a new variable – past experience (PE) as an investigative determinant of future intention (FINT). Managers’ future intention referred to the 12 months from the day the respondents participated in the present survey.

Research Methods

The study is of quantitative survey and that the questionnaires were personally administrated to respondents in 11 industries and 9 locations in West Malaysia. There are 3 sections in the survey questionnaires format which consist of 55 questions on general information, study variables and respondent’s profiles.

Theoretical Framework

Currently, most past studies on older persons are mainly on challenges and issues (e.g. Tengku Abdul Hamid, 2015); on retirement age policy (e.g. Tung & Comeau, 2012); on workplace discrimination (e.g. Fisher et al., 2017); on age stereotypes (e.g. Karpinska et al., 2013); on the influences of age on evaluative workplace outcomes (e.g. Wanberg et al., 2016). For the benefits of future research, this study endeavours to provide an additional variable such as past experience to the existing TPB theoretical model to explain hiring intention. As such to add value to the body of knowledge of Malaysian research literature on the ageing workforce.

More specifically, the study's result can bring awareness to organizations on the benefits of a diversified workforce. Understanding of the above significantly helps private business decision-makers to strategize their current employment policies and practices. Public policymakers can enhance business organizations' recruitment and retention policies of the older workforce through the enactment of discrimination-free employment legislations. All the above-listed benefits could ultimately greatly relief the Government from financial burden due to unemployed older workers. Based on the above and the hypotheses developed, Figure 01 below is the theoretical framework indicates the correspondent relationships between the variables and managers’ intention to hire older workers.

Figure 1: Theoretical Framework Showing Hypothesized Relationships
Theoretical Framework Showing Hypothesized Relationships
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Sample and Response Rate

The focused population are hiring decision-maker or supervisor in a project team. For the study, they are collectively referred to as managers. In this present study, there was no prior name list available for managers responsible for hiring workers in any organizations, furthermore, the actual number of such managers could not be calculated; hence a non-probability sampling was employed to obtain respondents’ information (Zikmund et al., 2010). Personal-administered survey questionnaires were distributed to targetted respondents at their workplaces. The response rate was 78% (Male=59.6%; Female=40.4%). The breakdown of responses from individual region were Johor (10.7%); Kedah (10.7%); Kuala Lumpur (15%); Melaka (10.9%); Negeri Sembilan (10.7%); Perak (11.3%); Perlis (8.1%); Pulau Pinang (10.9%) and Selangor (11.8%).

Respondents between 31 to 50 years’ category formed the largest group. On educational levels, 82.5% had between secondary school, diploma and bachelor degrees levels. Among the 9 categories of job titles; the highest number of respondents came from human resource, administration, company director, production and operation. Majority of them had year of service from 1 to 5 years (32.1%), 6 to 10 years (27.4%), 11 to 15 years (14.3%), and 21 years and above (10.9%), followed by the group who worked from 16 to 20 years (9.8%), and the lowest (5.6%) were managers who worked for less than 1 year.

On the types of industry, the wholesale/retail trade and repair of vehicles/household goods had the highest number of respondents at 124 (26.5%), followed by accommodation/food service activities at 62 (13.2%), manufacturing at 56 (12%), financial and insurance/Takaful activities at 54 (11.5%), education at 41 (8.8%), transportation at 33 (7.1%), human health at 29 (6.2%), construction at 27 (5.8%). Among the lowest were administration and support service activities, agricultural, forestry/fishing, professional, and scientific/technical activities at 42 (8.9%).

Data Processing

There was no missing data from the returned questionnaires. Post coding was developed which specified all the variables in the study, the columns they occupied and their possible values. Measurement scales used in the questionnaire were nominal scales, ordinal scales, semantic differential scales and Likert scales. For each of the Likert scales’ questions, there were 7 responses for selection. The numerical code was assigned to each of the Likert scales in each question where the values ranged from Strongly Disagree=1, Somewhat Disagree=2, Disagree=3, Neutral=4, Agree=5, Somewhat Agree=6, and Strongly Agree=7.

Data Analytical Technique

A statistical technique of variance-based Partial Least Squares-Structural Equation model (PLS-SEM) analysis was preferred due to its ability to account for measurement errors of latent constructs and to examine the significance of structural model simultaneously. Furthermore, Partial Least Squares (PLS) can be used for theory confirmation or theory development. In theory development, PLS is used to develop propositions by exploring the relationships between variables (Chin, 1998a). SmartPLS3 was used to perform the data analysis (Ringle et al., 2015).

Item Loadings

An initial factor loading by way of SmartPLS3 was conducted to examine the indicator's reliability. Table 01 below is the factor loadings and reliability test results. Reliability will be explained subsequently.

Table 1 -
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In Table 01 , all the loadings for Attitude and Future Intention were above 0.9 levels. For Past Experience, 4 items were above 0.7, except for PE5 (0.531). PE5 was not removed due to Past Experience’s composite reliability was recorded at 0.889. For Perceived Behavioural Control, 3 loadings were above 0.7 levels, however, 2 items were at 0.6 levels; as per Hair et al. (2014), loading from 0.6 to 0.7 is acceptable and should be retained for further analysis. For Subjective Norm, all 5 items were above 0.7 levels.

Reliability and Validity

Both tests on Cronbach’s alpha and composite reliability were carried out and the results indicated high internal consistency of the measurement instrument. Although in PLS, it is recommended best not to rely solely on Cronbach’s alpha for internal consistency reliability due to its limitation (Bagozzi & Yi, 1988; Hair et al., 2014), however, from both sets of tested values as in the above Table 01 , there was no big difference between the results. Therefore, it is concluded that all values were of a high-reliability level.

Outer Model’s Validity

To check convergent validity, the average variance extracted (AVE) values on all latent variables were examined. Table 02 presents the validity test results.

Table 2 -
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From Table 02 , all values are within the acceptable level. As such, the variables highly correlated and this indicates a sufficient degree of convergence validity. On the discriminant validity, none of the square root value is above the value of 1. In this situation, the square root values for all latent variables indicate that discriminant validity is well established between all the constructs. At the same time, all AVE values are within the acceptability level (Bagozzi & Yi, 1988). As presented in Table 02 , the values are evidence of distinctive, unidimensional scales of constructs from each other, and that internal convergent validity is satisfied.

Evaluation of the Structural Model

R2 for future intention to hire (FINT=0.392) and subjective norm (SN=0.339) were considered as moderate, whereas attitude (ATT=0.050) and perceived behavioural control (PBC=0.046) were weak. This effectively meant that the 4 latent variables (ATT, SN, PBC and PE) had substantially explained 39.2% in FINT. Based on the results, the future intention to hire (FINT) and subjective norm (SN) demonstrated moderate predictive accuracy. As the study was to predict managers’ future hiring intention and that it was always hard to predict human’s intention, this posed difficulty for the R2 value to be very high. For the predictive impact, followed the 2 rule of thumb for effect size; SN (0.151) had a moderate predictive impact on FINT, while ATT (0.094), PBC (0.033) and PE (0.021) had small predictive impacts on FINT.

Findings

The summary of the test results for research questions 1 and 2 are presented in Table 03 .

Testing Hypotheses for Research Question 1

All the 3 alternate hypotheses were found to be supportive.

Table 3 -
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On the hypothesized path relations between ATT and FINT (H1a), the β value (-0.426) was above the -0.30 threshold. The relationship was strong (Chin, 1998b). For a negative path coefficient, ATT effects negatively to FINT such that when ATT increased 1 SD, FINT decreased 0.426 in SD. A negative path coefficient was interpreted in the same way as a positive standardized regression coefficient. The std. error (0.044), and that the empirical t-value (9.730) was larger than the theoretical value of 2.58, therefore the relationship between ATT and FINT was significant @p<.01 confidence level (Hair et al., 2014). Hence, there was significant evidence that ATT has a negative relationship with FINT. H1a was supported.

On the hypothesized path relations between SN and FINT (H1b), the path coefficient β value (0.253) was above the 0.20 threshold indicated a moderate relationship, hence it was accepted and statistically significant (Chin, 1998b). The std. (0.051) and the empirical t-value (4.975) suggested the relationship between SN and FINT was significant @p<.01 confidence level (Hair et al., 2014). Hence, there was significant evidence that SN has a positive relationship with FINT. H1b was supported.

The β value for hypothesized path relations between PBC and FINT=0.101 (H1c) was below the 0.20 threshold (Chin, 1998b). This resulted in a weak relationship. However, the std. (0.059) and the empirical t-value (1.721) was larger than the theoretical value of 1.65, therefore the relation between PBC and FINT was significant @p<.10 confidence level (Hair et al., 2014). Hence, there was significant evidence that PBC has a positive relationship with FINT. H1c was supported.

Testing Hypothesis for Research Question 2

The result is presented in the above Table 03 . The path coefficient β value for PE and FINT (H2a)=-0.049, which was below the 0.20 threshold. As such, it is unacceptable and statistically insignificant (Hair et al., 2014). From the findings, the β value indicated a weak effect size, and that PE did not directly predict FINT. For a negative path coefficient, this indicated that PE effect negatively to FINT where when PE increased 1 SD, FINT decreased 0.049 in SD. Although the β values of PE1(0.836), PE2(0.898), PE3(0.834), and PE4(0.794) were all above the 0.70 level, but with PE5(0.531), the std. error µ (0.044) and the t-value (1.116) failed to meet the minimum threshold of 1.65; therefore, it was insignificant (Hair et al.). The low t-value was due to individual indicators of PE1(27.993), PE2(56.453), PE3(29.935), PE4(14.178) and PE5(7.584), especially the low PE5, which rendered the mean t-value to fall below the critical acceptable threshold. It can be seen that the 3 questions (PE1, PE2 and PE3) adopted from Lu et al. (2011) received higher values. As PE is not originally within the TPB, but was an additional predictor, as such it had not been tested often. Such being the case, the null hypothesis of no relationship in the population (r = 0) could not be rejected.

Conclusion

The Study Outcomes

In the search for a better understanding of whether managers’ attitude towards older workers, subjective norm, perceived behavioural control and past experience are related to their hiring intention; this study attempts to uncover the lesser-studied field of older workers in the workplace. The term older workers are often associated with the negative connotation of being weak, poor performance, lesser learning ability, resistance to change, job hop and higher recruitment cost, and they are ready for labour to exist (Lu et al., 2011). This study offers an insight into whether the labour shortage in business organizations could be overcome with managers' hiring intention to fill the labour gap. This is an exploratory and a quantitative study where data was collected via a personal administration followed the positivist philosophy. Data was collected from 468 managers with hiring-authority in 11 industries from 9 locations. The response rate was 78% (M=59.6%; F=40.4%). SmartPLS3 was used to analyse the data. The predictive model explained 39.2% of the variance in managers' future intention.

The empirical result suggests one important point, i.e. TPB is an appropriate model to predict managers’ future intention to hire older workers (Ajzen, 1991). The research findings corroborated with Ang et al. (2015) in those managers’ attitudes, subjective norm and perceived behavioural control are strong predictors and significant contributors to the prediction of hiring. Additionally, the subjective norm in this present study also supported Lau et al. (2018) and Lu et al. (2011) where subjective norm was found to be of greatest importance to the intention prediction.

Past experience (H2a) was not supported (β=-0.049; t=1.116; p=0.265). The non-relationship between managers’ past experience and their future intention explained that even though managers generally have good experience with older persons in their communities and families, or at workplaces, but that does not translate into their future intention to hire older workers. As was seen from a short term hiring strategy question provided in the survey questionnaire, managers were more prepared to adopt other strategies to fill job vacancies such as to hire part-time workers, to offer higher wages, to utilize foreign labour and substitute with technology instead of hiring older workers. As such, to hire older workers was not the managers’ first preference.

Implication and Contribution

The present study expanded and tested the TPB on hiring intention theoretically. The overall quantitative findings added value to the knowledge of Malaysian research literature on the ageing workforce. The answers to the 2 research questions from the quantitative evidence provided real meaning in terms of the hiring of older workers and the future utilization of the ageing workforce. Additionally, this study provides an even stronger basis for the hiring intention by tying it more directly with the TPB. It is clear, based on the investigation of the empirical data, 3 hypotheses (H1a, H1b and H1c) were supported while hypothesis 2Ha was otherwise. Overall, 39.2% of future intention was explained by the 4 predictors.

This study contributes to extending the TPB model to provide a multi-component construct model in understanding the various determinants of the hiring intention of older workers. The extended model can be used as a starting point for future research on the issues on or related to the employment of older workers and its impact on Malaysian employment practices. Therefore, this present study has also provided a new avenue of research surrounds the hiring intention in the local scene. Furthermore, this study calls for the attention of psychological factors of managers’ attitude, subjective norm, perceived behavioural control, and including past experience.

On managerial implication, this research demonstrates that the 4 predictors of TPB played important roles in predicting managers’ hiring intention despite the traditional human resource management where policies were of lesser encouragement to older workers to remain in employment (Karpinska et al., 2013; Truxillo et al., 2017). Employers perceived older workers to be of high cost, hence, preference is to hire low or unskilled foreign labour on low wages; however, unskilled foreign labour should merely be hired to substitute unskilled local labour, since foreign labour who could really contribute to the long term growth of Malaysia should be those educated and highly skilled foreign labour (Cheong, 2017). Managers perceived that by increasingly hiring older workers to fill the labour gap can create expected management challenges for themselves, such as to implement and manage the recruitment and training of older workforce (Rudolph et al., 2017). Radford, Chapman, Bainbridge and Halvorsen (2018) advised organisations to take proactive responsibility for their policies regarding the attraction and retention of both young and old workers. Such should include a holistic approach to suitable job descriptions (Perera, 2016).

On the significant contribution to business organizations, this knowledge gives organizations opportunities to support managers' intention to accomplishing the organization's goals with vacancies be filled by able and willing older workers. This is evident from responding managers indicated the lack of support from their management, peers and the lacked resources caused them the inability to connect to their hiring intention. Such insufficiency requires organizations and management’s continual support to help realize hiring managers' intention, so as to render such intention effectively transformed into actual hiring behaviour.

The empirical result of this predictive research model implicates policymakers to urgently review immigration policy to prohibit the entrance of illegal labour and to restrict business organizations from hiring unskilled illegal labour. Policymakers responsible for national productivity, human resource development, migration issues, inland revenue and financial planning, social security system and health care are not only required to consider and plan for the ageing population, but they have to ensure that employers, in general, are willing to hire older workers so that Government could relief itself from the heavy financial burden in having to take care of unemployed older persons. As suggested by Fisher et al. (2017), public policy and lawmakers should pay more attention to age issues by keeping adverse impact related to age in mind in enhancing strategic human resource management practice.

Research Limitation and Future Research Directions

This is a cross-sectional quantitative study carried out only to predict managers on their future intention to hire older workers; the study did not measure respondents' actual hiring behaviour due to the complexity associated with the collection of data within organizations and the difficulty of preserving anonymity. Wherever possible, longitudinal research to study the specific hiring intention into actual hiring behaviour would be most recommended. Therefore, future research should be longitudinal and measure managers' hiring behaviour. Ideally, results should be computed for the overall sample and every individual company for comparative study. Also, this study surveyed hiring managers of 9 locations may have over generalised the hiring intention. Since the east coastal region of Peninsular Malaysia and East Malaysia were not included in the study. As such, this study could be replicated to test the validity of the findings to those omitted locations.

Conclusion

This study suggests that TPB is an appropriate theory to predict hiring intention. This study’s empirical results and the application of the extended TPB model were well supported by data, and the results further confirmed the relationships of the predictors and the hiring intention. The data reported may be further taken to encourage managers to eliminate any negative attitude, subjective norm and perceived behavioural control on workers’ age. An extended TPB has explicated a better understanding of managers’ intention to hire older workers.

The present study has potential to make a considerable contribution in Malaysian literature on older workers and managers' future hiring intention; in business organizations and public policymakers to the determinants such as attitude, subjective norm, perceived behavioural control and past experience. Nevertheless, the empirical results can be further enhanced by examining the gender of older workers, health status, and their academic and skill levels on managers' hiring intention. As the population continues to age, and the baby boomer generation continues to retire early, labour is expected to persistently run short. Hence, business organizations will be compelled to develop new policies and practices aim specifically to increase the employment of older workers.

Malaysia, being a developing nation, the Government took cognizance of the labour force issues and the increased number of experienced older workers progressively leaving labour force; as such emphasis is placed on the importance of human capital development. Such being the case, business organizations will be able to contribute to help the fast realization of the Government's aspiration of a high-income nation; one way is through organizations' recruitment and retention of their human talents include skilful and experienced older workforce for faster economic growth. Therefore, this current research has in a way bridged the literature gaps in the prediction of hiring older workers. It is hoped that the findings in this study will inform all parties concerned to provide supportive policies and practices to older workers to improve their employment prospects, and not forgetting all younger workers today will eventually become older workers tomorrow.

References

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Publisher

European Publisher

First Online

12.10.2020

Doi

10.15405/epsbs.2020.10.02.3

Online ISSN

2357-1330