Dynamics of Employee Retention Among SMEs in a Developing Economy

Abstract

The purpose of this study was to understand the challenges SME managers in a developing economy such as Ghana face in retaining their employees and how the situation could be mediated. This is because Ghanaian small and mediumsize enterprises are overwhelmed with the issue of how to retain their employees. Using a quantitative approach, data was collected from a sample of 300 SME managers and employees in fifteen small and medium firms in the manufacturing, financial, hospitality, IT, retail and service industries, it was found that the firms’ HR practices significantly impact negatively employee retention. It is therefore concluded that the best retention strategies available to SMEs in Ghana is the need to adopt a flexible workplace practices and work family support policies as well as focusing on good reward management practices.