Summary of article:
The article titled ‘Finding Employees and Keeping Them: Predicting Loyalty in the Small Business’ accounts for various factors that determine employee loyalty in small businesses.
The authors assert that employees in small businesses are expected to be more versatile and dynamic. This makes hiring the right people a little challenging. In larger businesses, each employee is a specialist in a particular facet of business. To this extent, job descriptions can be sharply defined and employees hired in numbers. (Dyer and Reda 2010)
Indeed, as the study identifies, small businesses which adopt a formalized hiring process tend to perform better than their less structured counterparts. For example, parameters such as financial performance, revenue growth, as well as owners’ success perception, all point to this correlation. More importantly, selection of personnel inadequately skilled for the role has a detrimental effect on retention. Not only do such employees let the performance of the business slip, but they themselves feel dissatisfied at work and are likely to quit. Herein is a key insight – professionalism and mastery over skills is a win-win situation for the recruiter and the employee.
The findings of the research point out that employees’ perception of owner commitment is vital to their loyalty toward the business. Likewise, usage of formal recruitment processes increases credibility in the eyes of the employee. These factors have a bearing on how long and with how much involvement employees deliver their duties for the business. On account of limited need for personnel, small firm owners are also inexperienced in using robust selection processes. Even otherwise, conventional recruitment practices are not very effective for small firms. (Dyer and Reda 2010)
Often potential candidates fear the possibility of exploitation by proprietors. They believe, not without reason, that the limited finances of the company would necessitate maximal usage of hired personnel. Due to modest financial resources of the business, candidates are also doubtful of receiving employment benefits, including health insurance, incentives, paid leaves, etc. This has a detrimental effect on loyalty, especially when during the course of employment, some of these promises are not met.