Effects of human resource management practices on employee retention in deposit-taking microfinance institutions (MFIs) in Kenya
The most successful organizations are the ones attract, develop and retain individuals who have the ability to manage a global organization, that is responsive to customers and the opportunities being presented by technology. DTMs ability to provide credit facilities to low income earners who lack the desired securities and collaterals demanded by the well-established financing institutions, makes them vulnerable and exposed to higher risk. However, the growing interest to tap on the wider base of these low earners has made the existing financial institutions encroach into the DTMs customer base. A closer look at the operations of many DTMs reveals that they all face challenges related to human resources management. The study sought to determine the effect of human resource management practices on employee retention in Deposit-taking Microfinance Institutions in Kenya. Secondary data was obtained from published accounts of the DTMs. The data collected was coded, edited and tabulated to ensure consistency and completeness. This was done by entering data into a computer through an excel spreadsheet to enable manipulation of the data before entering the data into the statistical package for social sciences software (SPSS) after which analysis was done. Descriptive statistics were used to describe the basic features of the data gathered from study. The descriptive statistics were presented in simple tabular and graph analysis, which formed the basis of quantitative analysis of the data collected. Arithmetic means, standard deviations were calculated that and used to draw up observations and make conclusions. Mean scores showed the ranking of the human resource management practices and employee retention by respondents organizations. The study concluded that the deposit taking microfinance institutions are able to achieve the intended organizational goals as measures have been put in place to ensure that quality of life and a balanced worklife for all employees and managers. Employee engagement entails creating opportunities for employees to connect with their colleagues, managers and the wider organization. The DTMs are able to offer creative career development opportunities that are woven into the fabric of the organization and present mentoring programs and overall retention results from a mix of rewards rather than any single reward. The study recommended that Human resource practices should be highly regarded in every organization. The deposit taking microfinance institutions for that matter should not be left out. Organizations should establish and review their human resource practices as this contributes greatly to employee retention leading to the inward success and outward success of the organization.