Date of Award


Degree Type


Degree Name

Bachelor of Business Honours


School of Management


Business and Law

First Advisor

Dr Alan Coetzer


This study addresses the question, what factors influence voluntary employee turnover in small businesses and how do owner-managers retain key employees? More specifically the study explores four research objectives: 1) the negative effects of voluntary turnover of key employees on small businesses; 2) common reasons why employees voluntarily leave small businesses; 3) characteristics of the small business that might enhance retention of employees; and 4) strategies that are employed to retain key employees. The current study employed an exploratory qualitative research design. Data was collected via semi-structured interviews with nine owner-managers and seven key employees from eleven Australian small businesses. A variant of the critical incident technique (CIT) was incorporated into the interviews with owner-managers with the aim of retrieving actual accounts of voluntary employee turnover and retention. The findings revealed that voluntary turnover of key employees have a number of adverse consequences for small businesses, including, but not limited to, lowered productivity and disrupted business continuity. A lack of financial resources to retain staff and limited long term career prospects, amongst other factors, were identified as common reasons for actual and intended turnover amongst key employees. In contrast, flat management structures and egalitarian work environments were some of the small business characteristics claimed to enhance employee retention. Owner-managers reported on a suite of remuneration based (e.g. providing pay rises and paid training) and positive emotion based (e.g. maintaining pleasant group dynamics) retention strategies. Some of the findings in the current study have been widely discussed in the literature whilst others cast light on relatively under-explored causes and consequences of voluntary employee turnover and employee retention strategies. Implications of the findings for management practice are explained. Limitations of the current study and their implications for future research as well as other areas that warrant further research are also discussed.