Effect of Human Resource Recruitment and Selection Practices on Employees’ Retention in Microfinance Banks in Lagos State, Nigeria
Dr. Odunayo & Henry Adewale
Abstract
Organizations primarily exist to accomplish specific objectives and goals. For organizations to achieve these, Human Resource Management (HRM) practices need to be embraced. The Microfinance bank subsector is challenged by inability to adopt HRM practices which may affect its performance at all levels. This study examined the interaction between HRM practices and performance of Microfinance banks in Lagos State, Nigeria.The study adopted survey research design. The target population comprised 9,708 employees of national, state and unit micro finance banks located across Lagos State, Nigeria. The study used stratified random sampling technique to select the sample of 1,548. A validated questionnaire was used for collection of data. The Cronbach’s Alpha coefficients for the constructs ranged from 0.75 to 0.97 with response rate of 86.9%. Data were analyzed using descriptive and inferential (Pearson Product Moment Correlation and regression) statistics. Findings revealed that Human Resource Management practices components had significant combined effects on Microfinance bank performance (Adj. R2 = 0.678, F(5,1340) = 568.330). Recruitment and selection had significant effects on employee retention (β = 0.723, t(1345) = 132.569, R2 = 0.929, p<0.05). The study concluded that Human Resource Management practices influenced the performance of Microfinance banks in Lagos State, Nigeria. The study recommended that Microfinance banks should implement effective recruitment and selection, and restructure of the operations of Microfinance banks to keep their failing business alive and increase their competition.