Challenges and main reasons for employee departures from SMEs: a case study of a Moroccan SME

Abstract

In the field of HR Management, the employee turnover rate is widely recognized as a key performance indicator. The metric quantifies the number of employees who depart from and subsequently join a company within a given period. If the rate is high, the company is operating at a loss. Conversely, a relatively low rate can be indicative of low employee turnover, which can be beneficial for a company. The concept of employee retention, which is defined as the number of employees retained by a company during a given year, is generally opposed to the concept of employee turnover. While initially within the purview of human resources, the importance of employee retention has grown significantly for business leaders, particularly within the context of SMEs. The primary focus of this research is on internal company dysfunctions. One case study is presented, in a Moroccan context where small and medium-sized enterprises play a predominant role.

The SME studies have a problem of employee retention. We examine the employer-employee relationship to identify the deficiencies that result in frequent employee departures. Data is collected through observation and interviews. Our analysis indicates that the management style employed by the employer, particularly the social dynamics within the company, plays a pivotal role in employee retention. The proposal includes a focus on socio-economic approach to management as a potential solution.

JEL Classification: M12

Paper type: Empirical research