The Factors Influencing Intention to Retire:

A Perspective on Working Women

Kan Wen Huey

1,2

and Rajendran Muthuveloo

Wawasan Open University, School of Business & Administration, 10050 Penang, Malaysia

Universiti Sains Malaysia, Graduate School of Business, 11800 Penang, Malaysia

Keywords: Working Women, Intention to Retire, Job Characteristics, Work-related Factors, Non–work-Related

Factors.

Abstract: This paper illustrates factors influencing the intention to retire amongst women employees. It adopts

correlational type research that utilises quantitative research method to collect data to address the research

objectives. This paper highlights the work and non–work related factors that influence the women

employee’s intention to retire. In addition, this paper also provides information on the moderating effect of

employee’s personal and job characteristics on the relationship between work and non –work related factors

and intention to retire. The outcome of this study will be useful for practitioners to formulate more effective

strategies in managing retirement among women, which crucial for their individual and organisational

performance. In addition, it also enhances further the knowledge of academicians in the field of retirement,

because serious attention is needed on this area due to tremendous increment of women proportion in the

labour force worldwide.

1 INTRODUCTION

Retirement is a stage of life where involvement in

certain social activities and desirable conducts

become less or narrow. Retirement life without

planning requires continuous employment or

working while life style remains the same in the

young age although the individual have reached the

retirement age. Lack of proper retirement planning

preparation will generally bring some

disappointment during retirement. Thus, having a

proper retirement planning is extremely important.

Many surveys and data are available on the pre and

post retirement plans. The growing of life

expectancy worldwide will experience longer

retirement life. People are worried about the life

after retirement so most articles have discussed this

issue.

As a limited study within Malaysia conducted on

factors influencing the intention to retire, this study

will focus on identifying the factors that will

influence on the intention to retire based on work

related and non–work related factors. Malaysia

needs to focus on retaining women in the workplace

to address the relatively low level of female workers

participating in the labour force. This is because a

significant portion of working women in the country

leaves their job after starting a family, and thereafter

they do not return to the workforce.

Labor force participation of women has

increased considerably from 54.3% in 2016 to

54.7% in 2017 in Malaysia by Labour Force Survey

Report, Malaysia, 2017. This trend reflects the rising

labor participation rates in successive cohorts of

women, who increasingly stayed in the labor market

after having children or returned to the labor market

after a period of caring for their children.

Malaysia has made significant progress in the

past six years since 2011 to increase the number of

women in the workforce and in decision-making

roles in the corporate sector due to Government

initiatives that sought to enhance the contribution of

women to the economy and to promote greater

inclusiveness in the workforce. In addition, due to

lots of focus on working women, this research

becomes very important for the country. Thus, this

article explores the possible factors that influence

woman employees for retirement.

2 LITERATURE REVIEW

The literature conducted on the key variables

comprises of Intention to Retire, Factors lead to

220

Huey, K. and Muthuveloo, R.

The Factors Inﬂuencing Intention to Retire: A Perspective on Working Women.

DOI: 10.5220/0008490902200226

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 220-226

ISBN: 978-989-758-363-6

Intention to Retire, Job Characteristics and Personal

Characteristics which are as follows:

2.1 Intention to Retire

Retirement is no longer an abrupt transition from a

working to a non-working life style. Most of the

retirement planning of individuals is important for

many reasons. Intentions to retire may affect not

only confined to the effective retirement age of a

worker but also their actual job requirement at work.

According to some researchers, planning of

retirement is not a unitary concept but can be

described as a set of cognition and behaviors that

relates to different dimensions. Planning of

retirement can be represented as an intention

regarding the form that it takes. It can be defined as

“personal designs or intentions towards the

conclusion of the work career and the initiation of

retirement life”.

Several studies have examined the distraction

intention to retire but without clear distinction

among the various types of intentions (Keni et al.,

2015). Indeed, one of the main criticisms made on

retirement intentions is that they have only

considered the extremes of the “work/retirement”

continuum.

2.2 Factors Leading to Intention to

Retire

Many studies shown that retirement decisions are

influenced by financial-economic constraints, health,

job characteristics such as monotony or a lack of

challenge, career prospects, autonomy and the

relationship with one’s partner.

Researchers showed that from a life course

perspective, retirement intentions may be affected by

non-work and work-related factors. The effect of the

health status on retirement intentions has also been

widely studied. However, the evaluation of the

impact of health on retirement intentions is not so

straightforward, given the justification bias raised by

subjective health measures (Muthuveloo, 2013).

Researchers have put factors that could play a

role in the decision to retire in a model in which a

difference between personal and environmental

factors was made. Environmental factors encompass

work features (work characteristics) and non-work

factors (family, marriage, leisure time and health).

Health is traditionally one of the most important

determinants of early retirement and it turns out that

older employees have a stronger intention to leave

the labour market prematurely as health diminishes.

Most researchers focused on general health as a

predictor for retirement. Few researchers have

addressed the extent to which psychological

complaints play a role.

As retirement intentions are not only driven by

financial incentives, result also form a trade-off

between consumption and leisure, the quality of the

work environment is expected to affect the planned

retirement age (Wen et al., 2017). In almost all

studies, this quality is measured by asking

individuals about their thoughts and attitudes about

work. Studies have shown that the workers that are

likely to retire are those who reports about being

tired to work, or that their work has a lack of

challenge, a lack of ascendance in the workplace or

a lack of autonomy.

2.2.1 Work-related Factors

Work-related factors include changes in workplace

technology, age discrimination and work and job

performance, interaction with colleagues, workforce

reductions, and organisational retirement packages

(Fowlie, 2016).

2.2.2 Non-work-Related Factors

Non-work-related factors include financial

circumstances, the individual’s health and age, and

the goals for retirement (Fowlie, 2016).

2.3 Personal Characteristics

Personal characteristics are a description of the

personal characteristics that designed to get known

on perceptions of own characteristics. It covers five

core job dimensions which are: openness to

experience, conscientiousness, extraversion,

agreeableness, and emotional stability. (Seng et al.,

2013).

Openness to experience refers to the dimension

of cognitive style that distinguishes imaginative,

creative, and conventional people (Barrick and

Mount, 1993). It is also a measure of depth, breadth

and variability in a person’s imaginations and urge

for experiences (Saade et al., 2006). People who are

open to experience are always perceived as healthier

or more matured, and may serve as an educator in

terms of performance criteria (Griffin et al., 2004).

People who have high conscientiousness are

reliable and responsible people (Barrick and Mount,

1993). They have good self-control, act dutifully and

always aim for achievement. They like to follow a

plan rather than act spontaneously. This makes them

good at formulating long-term goals, organizing and

The Factors Inﬂuencing Intention to Retire: A Perspective on Working Women

221

planning routes towards achievement and working

persistently to achieve goals.

Extraversion is correlated with the enjoyment of

being with people, being energetic and often

experiencing positive emotions (Barrick and Mount,

1993). Extravert people tend to be enthusiastic and

action-oriented towards opportunities for excitement

and they like to be the center of attention in groups.

Extraversion can predict effective functioning and

well-being across a wide variety of domains (Ozer

and Benet-Martinez, 2006).

A person with high level of agreeableness is

usually warm, friendly, tactful, and is negatively

associated with interpersonal arguments, aggression

and anger (Jensen-Campbell and Graziano, 2001;

Meier and Robinson, 2004). They have a positive

view of human nature and believe that people are

decent, honest, and trustworthy. They get along well

with others because for them, social harmony is

important.

Emotional stability is defined as self-confident,

self-possessed, resilient, tolerant of stress and well-

adjusted. People with high level of emotional

stability or low level of neuroticism are the person

that is able to control their own self to remain stable

(Barrick and Mount, 1993). They tend to be

emotionally stable and calm.

2.4 Job Characteristics

The job characteristics model (JCM) is a widely

studied model of motivational job design that

explains the important work outcomes (e.g.

satisfaction and tenure) for workers in a wide variety

of blue- and white-collar jobs. The model states that

there are five core job characteristics comprising of

skill variety, task identity, task significance,

autonomy and feedback.

As defined by Hackman and Oldham (1976),

skill variety is referred to as the extent to which a job

requires the worker to perform a number of different

activities while carrying out the work. It other

words, the worker is required to possess a variety of

skills and talents in performing the job. On the

contrary, high SV exists when the owner of a high-

end hairdressing salon is required to perform well.

Task identity (TI) represents the degree to which

the job requires the worker to complete an entire

piece of work. This means, performing a job from

the beginning till the end with a visible outcome

(Hackman and Oldham, 1976).

Task significance refers to the extent of which

the job has a considerable impact on the physical or

psychological well-being of others, whether in the

immediate organization or in the external

environment (Hackman and Oldham, 1976).

Autonomy is referred to as the degree to which

the job provides employees with considerable

freedom, independence, and discretion in scheduling

the work and in determining the procedures to be

used in carrying out the work (Hackman and

Oldham, 1976).

Feedback represents the degree to which

carrying out the work activities required by the job

results in the individual obtaining direct and clear

information from the job about the effectiveness of

the individual’s performance (Hackman and

Oldham, 1976). FB can be divided into “feedback

directly from the job” and “feedback from agents”.

Feedback directly from the job refers to direct

knowledge of the results of one’s work. On the other

hand, feedback from agents refers to knowledge of

results deriving from some other people. Regardless

of the types of Feedback, the focus is on the

feedback mechanisms that are designed into the

work itself (Hackman and Oldham, 1980).

In short, JCM proposed that when workers

perceive their job as meaningful and know that they

have carried out their work well based on their own

effort, they gain intrinsic rewards that will enhance

the workers’ motivation, performance, satisfaction,

and commitment.

3 UNDERPINNING THEORY

Based on Abel Duarte Alonso and Vlad Krajsic,

(2015) pioneering works, the theory of planned

behaviour (TPB) is chosen to develop the research

theoretical framework. Behavioural intention can

translate into actual behaviour only if such behavior

“is under volitional control”; in other words, when

individuals can decide to perform or not certain

behavior on their own terms, or whether it is in line

with their choice to do so or not.

Ajzen (1991) proposed a framework based on

three determinants or predictors of intention called

attitude towards the behavior, subjective norm and

perceived behavioural control. In addition, he also

propagated that the performance of most behaviours

may depend upon several non-motivational factors,

including resources (e.g. skills, money, time and

cooperation of other individuals), or on the

“availability of requisite opportunities”.

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4 RESEARCH THEORETICAL

FRAMEWORK

Figure 1: Research Theoretical Framework.

Based on the research gap identified and

underpinning theory, the theoretical framework

shown above in Figure 1 was developed. The

Dependent Variable is Intention to Retire and the

Independent Variables are Work Related Factors and

Non-Work Related Factors. In addition, the

Moderating Variables are Personal Characteristics

and Job Characteristics.

5 HYPOTHESES

Based on the theoretical framework shown above in

Figure 1, six (6) main hypotheses were developed to

address the research questions and objectives. The

hypotheses are elaborated below:

5.1 Work-related Factors versus

Intention to Retire

Work-related factors that can impact older workers’

retirement preferences can include changes in

workplace technology, age discrimination (Jex and

Grosch, 2012), and work and job characteristics. The

following hypothesis is formed.

Hypothesis 1: Work related factors have a positive

significant influence on the intention to retire.

5.2 Non-work Related Factors versus

Intention to Retire

There are many factors that may contribute towards

an older worker making the decision to retire. These

predictors of retirement-related decisions can be

classified into non-work related factors. The age of

the individual is an obvious factor that influences the

decision to retire. The older the individual is, the

more likely they are to make the decision to retire

(Jex and Grosch, 2012; von Bonsdorff and

Ilmarinen, 2013). But this is not the only factor to

influence the intention to retire among working

women. By looking at all the non-work related

factors, the following hypothesis is formed

Hypothesis 2: Non-work related factors have

positive and significant influence on the intention to

retire.

5.3 Personal Characteristics versus

Work-related Factors in Relation to

Intention to Retire

Personality variables are indicated as important in

terms of the job characteristics or job attitudes and

rewards as determinants of job performance

(Cappelli, 1995). The question of whether

personality measures are valid predictors of

occupational performance has been answered by

previous researchers as well. It is important because

there is always room for better improvement

(Hogan, 1998). The following hypothesis is formed:

Hypothesis 3: Personal characteristics positively

moderate the relationship between works related

factors and intention to retire.

5.4 Personal Characteristics versus

Non-work-Related Factors and

Intention to Retire

According to Rothmann and Coetzer (2003),

personality questionnaires are not useful in the

prediction of individual intention, and they should

not be used in selection decisions unless their

validity has been specifically and competently

determined for the specific situation. There is little

study available to be used as the references for the

review of the criterion-related validity of personality

assessment for individual intention as moderating

variable to look in to the relationship between non-

work related factors and intention to retire. The

following hypothesis is formed

Hypothesis 4: Personal characteristics positively

moderate the relationship between non-works

related factors and intention to retire.

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5.5 Job Characteristics versus

Work-related Factors and

Intention to Retire

In some instances, certain at risk individuals may

feel they are being pushed out of the labour market

when there is a mismatch between the characteristics

of available jobs and the characteristics of the labour

force. This can be the result of advances in

technology and increased competition (Stattin,

2005). The following hypothesis is formed

Hypothesis 5: Job characteristics moderate

positively the relationship between works related

factors and intention to retire.

5.6 Job Characteristics versus

Non-work-Related Factors and

Intention to Retire

To examine the moderating relationship between job

characteristics and non-work related factors, this

theoretical framework serves as a guide to

investigate job characteristics such as skill variety,

task identity, task significance, autonomy, and

feedback (Hackman and Oldham’s, 1976). We

investigated whether these have influence on

intention to retire decision making. The following

hypothesis is formed

Hypothesis 6: Job characteristics positively

moderate the relationship between non-works

related factors and intention to retire.

6 RESEARCH METHODOLOGY

The research methodology that will be utilised to

collect and analyse the data has been elaborated. It

covers the research design, population, sample size,

sampling techniques, measurement and measures,

data collection method, and statistical tool and data

analysis to be carried as described below.

6.1 Research Design

The research design includes quantitative, cross-

sectional type and correlational basis respectively.

Quantitative research is all about exploring issues,

understanding phenomena, and answering questions.

This research is also a correlation study, which was

carried out with minimum interference by the

researcher, with normal work flow in the natural

setting of the organization (Sekaran, 2006). This

means that the respondents of this research are given

the freedom to answer the questionnaires with

minimal interference to their intention. A cross-

sectional type refers to a study conducted in a way

that data is collected and gathered just once in order

to answer the research questions. This is a suitable

method for this research as the researcher is

interested to find out the perceptions of the

respondents regarding factors leading to intention to

retire, job characteristics, personal characteristics

and intention to retire only at a certain time point.

6.2 Population and Sample Size

The target population of this study is women

employees (including full time, contract based, part

timer, freelances, self-employees) working in any

field or sector in Malaysia. Referring to the table

that determine the sample size from its population

by Krejcie and Morgan (1970) this amounted to a

total of 384 samples to be collected due to a

population of more than 100000 with Confidence

level at 95%.

6.3 Sampling Technique and Data

Collection Method

This study is conducted in a convenience non-

random sampling design. Convenience sampling is

probably the most common of all sampling

techniques. This survey questionnaire will be a

structured questionnaire consisting of five section

which are section A, B, C and D. Section A of the

questionnaire consists of questions and indicators on

dependent variables which is intention to retire.

Sections B indicate the measure for factors leading

to intention to retire that was influenced by work

related factors and non-work related factors.

Section C contains personal characteristics and

Section D contains job characteristics that indicate

and measure the relationship in between factors

leading to intention to retire and intention to retire

itself which are moderating variables. Section D is

designed to obtain the demographic data of the

respondents. The components in Section E will

encompass the details about respondents’

background.

Aside from that, this study focused on the

individual as the unit of analysis. This means that

instead of a group of individuals, a single individual

is surveyed and responds to the questionnaire

distributed to them. So the survey is conducted by

the implementation of web-based and personal self-

administered questionnaires.

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6.4 Data Analysis Techniques

In this study, the data will be analyze using

Statistical Package for Social Sciences (SPSS) and

Partial Least Squares Structural Equation Modeling

(PLS-SEM) using SmartPLS 3.0. For the purpose of

data analysis, a number of statistical test will be

carried out which includes descriptive analysis

factor analysis, reliability analysis, correlation

analysis and multiple regression analysis.

7 CONCLUSIONS

7.1 Limitations

Before offering some concluding comments, it is

important to draw attention to some potentially

critical methodological limitations of this study.

Firstly, it should be noted that the employees in the

sample are not representative of all working women

in Malaysia as most of the women are too busy to

the level that they do not have time to respond to the

survey of this research. Secondly, as this is a cross

sectional study, this study only covers working

women within a short time period. They could either

take up a job or resign immediately after this survey

is completed.

7.2 Conclusions

In this changing environment, retirement plans have

always been a common topic in both developed and

developing countries. Nowadays, many problems

arise in preparing the retirement plan such as natural

biological aging process, worker types, retirement

age policy, family cultural changes, unpredictable

macroeconomic events, medical cost increases and

so on. These facts highlight the rising concern and

awareness on the importance of pre-retirement

planning among working women in Malaysia as the

composition of women workforce is increasing

rapidly. In view of this, understanding the factors

influencing the intention to retire becomes critical as

the organisation need to formulate the appropriate

strategies for good management in order to optimize

the organisational performance that is crucial for

business sustainability.

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