Low Salary and Employee Turnover: An Empirical Study of the Telecom Sector in Pakistan

Abstract

Closely related to service quality and company profit, employee turnover poses organizations with continuous challenges. Especially, in the telecommunication industry in Pakistan, the problem has led to the loss of qualified employees and increased expenses of hiring new employees. This study seeks to research the growing employee turnover problem in Pakistan’s telecom industry on account of employees earning low salaries. Following Herzberg's Motivation-Hygiene Theory and Adam's Equity Theory, the research study seeks to examine the factor of employees leaving the organization on account of dissatisfaction with compensation. A quantitative approach was adopted to collect primary data involving 200 employees of Pakistan's four leading telecommunication companies, namely, Ufone, Jazz, Zong, and Telenor. The study found that there is a strong positive correlation between perceptions of low salaries and increased turnover intentions. This means that employees who perceive that their salaries are lower than the market average are more likely to quit their jobs. The study recommends that in order to mitigate turnover in the sector under study, there needs to be more competitive salary structures, more regular salary updates, and better system compensation Transparency.