Anaysis of Human Resource Challenges Facing Entrepreneurs in Kenya: a Case of ICT SMES in Nairobi

Abstract

The purpose of this study was to analyze the human resource challenges that are experienced by the business entrepreneurs. The study focused on recruitment and selection and on the training and development of employees in the I C T sector. The specific study questions for this research were: what recruitment and selection challenges are facing I C T firms; what are the training and development challenges facing I C T firms and what challenges are I C T firms facing under employee retention and what measures can be taken to curb high employee turnover. The research design used for this study was the descriptive research design. The study targeted the 216 I C T firms in Nairobi and each of the targeted companies had to have a minimum of 6 and a maximum of 50 employees. To select the representative sample of the required 112 I C T companies fi-om the 216, a list was prepared under each strata. Every second (2"'') company in each stratum was selected to constitute the required sample size. An 81.1 per cent response rate was achieved; the questionnaires with full response were sixty-four and these were used for the study findings. The primary data was collected by means of a questionnaire while secondary data, aimed at reviewing the previous studies done, was drawn from the existing literature. As the raw data was both qualitative and quantitative in nature, the measure of central tendency that was used for the quantitative data was the mean; while for the qualitative data, the coding technique was used. Tables were used to interpret, summarize and present the main characteristics and findings of the study. The study showed that only 40 per cent of the interviewed had a full-fledged HR department while the remaining percentage had the HR duties being carried under another unit. Seventy-six point six per cent of the firms under study did perform HR planning with these plans being reviewed either quarterly or half-yearly. The most important HR duty as ranked by the firms was recruitment & selection while employee retention was the least important. The study found that the job analysis and screening was critical to identifying and matching the individual skills in the recruitment and selection process. It also showed that job analysis helps design a detailed job description for existing or new roles. The main recruitment challenges identified were prohibitive recruitment costs and changing labor market conditions. The study also confirmed that training and development, coupled with V high staff motivation is a major contributor to employee retention, as well as improves efficiency and productivity of employees. The main training and development challenges as highlighted are high & restrictive costs of training, change resistance brought about by the training and difficulty in applying the new skills. The study also confirmed that the employee retention challenges faced by the SME-ICT firms are customer dissatisfaction, loss of valuable knowledge, reduced employee productivity and high cost of replacing employees. The conclusion drawn is that the highest challenge of recruitment and selection is matching the required skill of the company with the skills of potential employees. The labor market conditions, recruitment costs and brand visibility are other challenges that impact the SME-ICT firms' success. Training and development was ranked second most important HR role but when it came to budgeting, it is allocated the least financial resources. There is a clear conflict between realizing the importance of training and development, and actually assigning resources to implement these training programs. Change management as a result of training is a threat to the culture of SME-ICT firms, thus presenting a big challenge. Though employee retention was ranked as the least important H R duty, it has become a huge challenge for H R practitioners with employees leaving for better opportunities every day. For effective business processes and customer satisfaction, the firms have to ensure high employee retention. The recommendation is for every firm to design a recruitment and selection process that will manage the talent from inception. Together with this process, comes the training and development plan for the firm. The main idea is to ensure effective employee retention. Clear processes will help alleviate the H R challenges the firms face, with the recruitment and selection. In order to achieve a deeper appreciation of training and development, the recommendation is to have in-house training to curb the costs, involve the employee in gap identification for training and to assign trained employees to projects where they can apply their newly acquired skills. To manage employee retention challenges, the recommendation is to ensure performance-based compensation and promotions and the implementation of applicable coaching and mentoring programs.