The Impact of Labour Turnover on Survival of Small and Medium Scale Enterprises: Evidence from Nigeria

Abstract

Small and medium scale enterprises all over the world are now looked upon as the engine room of the economy. Governments especially in developing countries are becoming aware of the importance of this sector in the growth of their economies, hence attention are been given to this sector especially in the provision of funds, reduction of legal and bureaucratic bottlenecks involved in incorporation of small scale businesses, provision of manpower training to small scale business owner and other ancillary services that not only will enhance survival but assist in alleviating the level of poverty prevalent to the lower class and  the poor in their economies. It is against this background that this study empirically investigated the impact of labour turnover on survival of small and medium scale enterprises in Nigeria. Samples of fifty SMEs were used for the study and survival proxies such as profit after tax, age and size as dependent variables. The study adopted the two-variable regression models to test the study propositions. The results obtained indicate that labour turnover has positive and significant impact on age and size but was positive and non-significant on profitability of SMEs in Nigeria. The study therefore recommends that, business owners should ensure that workers are not turned over but should be retained. This will ensure their survival in business.

Keywords: Labour Turnover, SMEs, Survival