An exploratory investigation into voluntary employee turnover and retention in small businesses

Abstract

Given the scant research on turnover and retention in small businesses, this study addresses the questions: What factors influence voluntary employee turnover in small businesses and how do owner-managers retain key employees? Data were collected via semi-structured interviews with eight owner-managers and seven employees from ten Perth-based small businesses. The findings suggest that relationship conflict, limited career prospects, and unsolicited work roles and responsibilities were amongst the common reasons for intended and actual turnover of key employees. In contrast, flat management structures, egalitarian work environments, and varied work roles were some of the small business characteristics thought to enhance employee retention. Owner-managers reported using a suite of remuneration-based (e.g., providing pay increases and paid training) and positive emotion-based (e.g., maintaining pleasant group dynamics) retention strategies. Two generalisations that emerged from these findings are discussed in the context of extant literature and their implications for future research and management practice are explained.

Keywords:

• small business
• human resource management
• voluntary turnover
• retention
• Australia