Employee Turnover Reduction Strategies and Performance of Insurance Firms in Kenya

Abstract

The objective of the study was to determine the employee turnover reduction strategies and performance of the insurance firms in Kenya. The study was necessary due to the fact that human capital is one of the basic factors of production. Therefore, any effect on human capital will affect its production causing a change on the firm performance. When employee turnover increases the performance is adversely affected as the business will have to incur extra cost in the process of employing new staffs and training them to a level where they can work enfficiently. If this process keeps recurring then the business may not meet optimum level of production and therefore its financial performance will decrease. This study endevours to enlighten the insurance companies in Kenya on the reduction strategies of employee turnover in order to enhance firm performance. The study collected descriptive data through questionnaring method for the study variables which include; employee recruitment strategies, skills allocation strategies, training and development strategies and team building strategies. The study then calculated the central tendency of the frequency of the data to get the mean, mode and medium. Multiple linear ligression analysis and correlation analysis were applied to the data using SPSS software packages. Regression analysis model was adopted and tested to determine the effect of the independent variable on the dependent variable. The model proved to be strong model as it explained 77% of the changes in firm performance and only 23% of the change was found to be caused by other factors outside the model. The correlation analysis finding indicated that there was a strong positive significant correlation between all the independent variables and the firm performance. The regression analysis results indicated that there was positive statistical significant effect of employee recruitment strategies, skills allocation strategies, training and development strategies and team building strategies on firm performance. The p- value of the F distribution was below 0.05 which led to the rejection of the null hypothesis. The study recommends that the insurance companies in Kenya should develop strategies that that would reduce employee turnover in order to enhance firm performance. they should formulate employee recruitment strategies that are effective and efficient, enhace strategies of skill allocation. Invest more in training and development of employees and team building.