Retaining employees in a Small Business Organization

Essay by robertdUniversity, Master'sA, February 2007

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Retaining employees is a huge dilemma for small business organizations. Large corporations have resources specifically aimed at retaining their employees while smaller companies do not. Using various resources, I will examine the issue of employee retention in small business. I found that the problem stems from different areas: lack of organizational resources, few employees in the workforce and minimal direction from management. While these issues are a problem, they are not insurmountable. Small businesses need to be innovative and creative in developing ways to keep their employees.


Why would a small business see higher turnover than a larger company? In general, small companies have less official company documentation and standardization with regard to job descriptions and responsibilities. Because there is a smaller employee roster, there is less opportunity for specialization. Small business employees often have to be versatile. It is for this reason that small businesses often refrain from being specific in outlining an employee's job description.

The employers themselves may not know ultimately what the expectations are of their own employees. Writes Kickul, "Instead of having explicit job assignments, job description, and training programs that are traditionally seen within large organizations (Aldrich and Auster1986; Aldrich and Langton 1997), small firms and their founders may rely on informal techniques to communicate their organizational benefits and rewards to guide and assist employees in understanding their psychological contract with the small business. (Kickul, Jill)" Employees often want specific descriptions of their roles and responsibilities. This means having written job roles and responsibilities, and having this available to the employee. When an employee has a specific understanding of what is expected of them, they will tend to have an increased sense of job security. As mentioned in the above quote, this scenario is traditionally found in large companies. An individual...