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.