The Effect Of Human Capital Management Practices On Employee Retention In Large Manufacturing Companies In Kenya

Abstract

Employee retention is vital as it brings implications for organizational competitiveness in an increasingly global landscape. “Retaining key employee is a vital source of competitive advantage for any organization. The general objective of this study was to establish the effect of human capital management practices on employee retention in manufacturing companies in Kenya. The study research objectives was to determine the influence recruitment on employee retention, training, job design and compensation on employee retention in manufacturing companies in Kenya. The theories that inform the study are Resource-based theory, Job characteristics theory and Expectancy theory. The population was 181 large manufacturing firms and the sample size of 124. A Human resource manager was purposively selected from each of the 124 manufacturing firms. The study adopted a descriptive research design. Primary data was collected using questionnaire. The data was analyzed using descriptive and inferential statistics. The study conducted normality test, multicollinearity and heteroscedasticity. A regression model was used to test the effect of human capital management practices on employee retention performance of manufacturing firms. The results indicated that recruitment and employee retention is positively and significantly related. The results further indicated that training and employee retention is positively and significantly related. The results further indicated that job design and employee retention is positively and significantly related. Lastly, results showed that compensation and employee retention is positively and significantly related. The study concluded that human capital management practices on employee retention in large manufacturing companies in Kenya. The study recommends that HR managers should endeavor that their recruitment, selection and retention process always focuses businesses objectives. The study recommends that HR managers should design specific training programmes that target this group of employee with the aim of enhancing their readiness in taking up tasks and accepting changes in the sector. Remuneration of employees who have upgraded should be reviewed according to human resources policy.