Academic journal article Journal of Small Business Management

Formal Development Opportunities and Withdrawal Behaviors by Employees in Small and Medium-Sized Enterprises

Academic journal article Journal of Small Business Management

Formal Development Opportunities and Withdrawal Behaviors by Employees in Small and Medium-Sized Enterprises

Article excerpt

This study explores direct and indirect relationships between involvement in formal training and development events, employee attitudes and withdrawal responses including turnover intentions and neglectful behavior for those employed in small and medium-sized enterprises (SMEs). Questionnaire data were obtained from 185 staff employed in a diverse range of SMEs. Our results suggest that employees that participate in more training and development events are less likely to be considering leaving their employer and less likely to engage in neglectful behavior. However, the analysis revealed that the effects of participation in formal training and development are fully mediated by perceptions of organizational support and job satisfaction. In contrast to results from studies in large organizations, affective commitment was not found to be an influential determinant of employee exit intentions or neglect.

Introduction

Despite the significant economic contribution of small and medium-sized enterprises (SMEs) to national economies, commentators have noted that we still do not know a great deal about human resource management in small firms (Mayson and Barrett 2006; Cardon and Stevens 2004; Baron 2003; Huselid 2003). Yet human resource issues are emerging as some of the most prominent concerns for owner/managers of small firms. A recent Australian Chamber of Commerce and Industry (2008) survey of 1,146 employers of all sizes found that the number one constraint on business investment was the availability of suitably qualified employees. In New Zealand, the most recent Quarterly Survey of Business Opinion (New Zealand Institute of Economic Research 2008) found that 36 percent of the businesses surveyed reported difficulty in finding skilled staff and for 23 percent a shortage of labor was the main impediment to growth. In a survey focused just on small businesses, Barrett and Mayson (2005) found that many of the significant issues challenging small firms were human resource related concerns including "... finding the right staff, finding skilled staff and retaining good staff" (p. 12).

Commentators have suggested that SMEs may have particular difficulty in retaining employees because SMEs are likely to have lower levels of perceived employer legitimacy than larger firms (Williamson 2000). In other words, SMEs are more likely to be seen by employees and job seekers as less desirable, proper, or appropriate employers. Undoubtedly, many SMEs lack the financial resources required to support remuneration packages that allow them to compete directly with large firms (Cardon and Stevens 2004), but it is also argued that limited scope for development and career advancement in SMEs may contribute to smaller firms being seen as less attractive employers (Marlow 2000; Patton, Marlow, and Hannon 2000; Williamson 2000). However, much of this is speculation as within the SME context little is known about factors influencing employee retention in general (Cardon and Stevens 2004), and the relationship between employee engagement in training and development and individual-level predictors of turnover in particular (Rowden and Ahmad 2000). In fact, after conducting an extensive review of the extant research on managing people within SMEs, Cardon and Stevens (2004) go on to conclude that "... hardly any studies look at factors influencing employee turnover or retention in small firms" (p. 316).

Though there is clearly a gap in our understanding of how training and development activity might impact employee retention in small businesses, studies in several countries have found that SMEs are less likely to provide formal training and development for employees than larger enterprises (Kotey and Folker 2007; Storey 2004; Johnson 2002; Kitching and Blackburn 2002; Curran et al. 1996; Bishop and Ritzen 1991). This discrepancy is attributable to several factors including the greater barriers to implementation of formal training and development faced by SMEs compared with their larger counterparts (Kotey and Folker 2007; Devins, Johnson, and Sutherland 2004; Kitching and Blackburn 2002). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.