Employment relations in small- and medium-sized enterprises: insights from Ghana

Abstract

This study examines employment relations in small- and medium-sized enterprises (SMEs) in Ghana. This is done through in-depth case studies of three private firms in the service sector. A review of the extant literature on SMEs revealed a dearth of knowledge on employment relations in SMEs in Africa. Previous research into SMEs in developing countries – and Africa in particular – has focused on economic policy initiatives, problems in raising capital and obstacles to the development of SMEs. In an attempt to fill the gap in the literature, this study uses recruitment, selection and retention, remuneration, discipline and welfare practices to explore the nature of employment relations, the factors that influence and shape them, and the extent of informality involved. The findings cast doubt on the stereotype: small implies/equals informal employment relations in SMEs in Ghana. The study also identifies the factors that influence employment relations and, in addition, reveals that under competitive pressures, SMEs have developed employment relations systems that enable them to have a competitive advantage in their product market/service delivery.

Keywords:

• economic development
• employment relations
• Ghana
• human resource management
• informality
• Small- and medium-sized enterprises
• sub-Saharan Africa
• trade unions and labour law

Acknowledgements

We would like to thank Nicholas Bacon, University of Nottingham for providing us with valuable insights and comments on an earlier draft of this paper.

Notes

1. Following Kayanula and Quartey's (2000) review of the characteristics of SMEs, we define SMEs in terms of number of employees; in this case, 10 to 99 employees.