Effective Leadership as a catalyst for enhancing employee retention in SMEs in Zimbabwe

Abstract

Most managers agree that employees are the greatest asset that any organisation may have. However, retaining them is one of the toughest challenges experienced by these managers. While Small and Medium Enterprises (SMEs) are fundamental to the sustainable growth and development of developing economies, they have witnessed high levels of employee turnover which has paralysed operations and negatively affected viability. The paper argues that effective leadership acts as a catalyst for enhancing employee retention in Zimbabwean SMEs. Guided by the positivism research philosophy and the deductive approach, the study adopted a quantitative research design where a survey strategy was used to collect primary data from 197 participants from Bulawayo’s Central Business Area (CBA) who had been chosen using proportional stratified sampling. The study found that having and communicating
a clear vision, effective communication, employee development, fairness, transparency, and accountability were related and positively contributed to employee retention. The study concluded that effective leadership is a catalyst for enhancing employee retention in SMEs in Zimbabwe. Leaders were recommended to communicate in a timely manner and provide feedback in a humane way. They should also ensure that organisational processes such as performance appraisal, disciplinary and grievance handling procedures are not only fair but are seen to be fair