Selected Human Resource Development Practices and Employee Retention: A Case of Deposit Taking Microfinance Institutions in Nairobi County, Kenya

Abstract

Retention of employees is becoming a real challenge in today‟s operating environment as employers begin to realize the value of people that make up the organization. While past studies have demonstrated the importance of employee retention in organizations, few have empirically examined the effect of human resource development practices on employee retention. The overall objective of this study was to examine the effect of selected human resource development practices namely: career development and learning and development on employee retention in Deposit Taking Microfinance Institutions in Nairobi County, Kenya. The specific objectives of this study were to determine the effect of career development on employee retention; to establish the effect of learning and development on employee retention and to establish the joint effect of career development, and learning and development on employee retention. The study adopted explanatory research design. The target population comprised of 320 employees from licensed deposit taking microfinance institutions in Nairobi County. A census of twelve (12) licensed deposit taking microfinance institutions was used in the study. The sample size comprised of 177 employees. 131 respondents filled and returned the questionnaires making a response rate of 74%. A structured questionnaire was used to collect primary data. The data that was obtained was analysed using Statistical Package for Social Sciences (SPSS). Data were analysed using descriptive and inferential statistics. Descriptive statistical tools were used to summarize data using means and standard deviation. Inferential statistical tools, namely, Pearson‟s correlation analysis, Simple and multiple regression analysis were used to test the study hypotheses at a 0.05 significance level. The results of Pearsons Correlation analysis showed that career development (r = 0.684, p < 0.05) and learning and development (r = 0.672, p < 0.05) had significant, positive relationships with employee retention. Further, the results of Hypotheses One, the ANOVA F statistic (F = 13.975, p < 0.05) indicates career development has a significant effect on employee retention. The results of Hypotheses Two of ANOVA F Statistic shows that learning and development has a significant positive effect on employee retention (F = 11.264, p < 0.05). Finally, Hypotheses Three results of ANOVA F statistics shows that the model was significant (F = 2.534, p < 0.05) which means that the selected career development and learning and development jointly have a significant effect on employee retention. The study recommends that organizations integrate career development and learning opportunities to enhance employee retention. Future research should explore other HR practices like recognition and flexible work arrangements