Factors Affecting Employee Retention in Small and Medium Enterprises in Babati Town, Tanzania.

Mokiwa, Ally Salehe (2025) Factors Affecting Employee Retention in Small and Medium Enterprises in Babati Town, Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

The study assessed the factors affecting employee retention in small and medium enterprises in Babati town in Tanzania. The specific objectives that guided this study included: To determine the effect of remuneration on employee retention in SMEs in Babati town, to assess the relationship between organizational performance and employee retention in SMEs in Babati town and to examine the effect of working conditions on employee retention in SMEs in Babati town. The study employed positivist philosophy, the deductive approach, the explanatory design and simple random sampling design. The survey strategy and the structured questionnaires were utilized to collect the data from 326 SME employees. The data were cleaned, coded and entered into IBM SPSS software version 27 for analysis. The analysis employed the descriptive and ordinary least squares multiple regression techniques. The study revealed that the remuneration packages, the working conditions and SME’s performance significantly and positively influenced the SME employees’ retention in the Babati town. The study concludes that the remuneration packages, the working conditions and SME’s performance were essential determinants for employees’ retention in the Babati town. The study recommends that SMEs continue improving the remuneration packages, the working conditions and their performance so as to have sustainable employee retention practices. The policy makers should devise policies that enforce better remuneration packages, working conditions and SMEs’ performance. Keywords: Factors, Employee Retention, Small and Medium Enterprises (SMEs), Babati Town in Tanzania

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