Leveraging Small Business Development Through Employment Contracts: The Mediation Effect of Job Insecurity

Abstract

Following enormous de-industrialisation and a series of industrial offshoring of big corporate entities over the past decade, Small Medium and Micro Enterprises have risen into prominence by their inert abilities of employment creation and poverty mitigation, particularly in the context of developing countries such as Zimbabwe. However, their continued failure has left the nation’s economy tottering at the brink of collapse, hence paling the vision 2030 of engineering the country’s economy towards attaining upper-middle income status beyond visibility and feasibility. High labour turnover is attributed as the chief cause of this phenomenon. In view of that, the current study sought to assess the moderating role of job insecurity on the nature of employment contracts and SMME development. The nature of the employment contract is deemed instrumental in promoting work commitment towards SMME development. This work commitment is anchored on an individual’s perceptions of job security. As such, for some, the nature of the employment contract becomes the sole driver to display extra effort at work in fear of losing a job. At times, such job loss fears are largely determined by one’s family needs and responsibilities. The hypotheses are tested using a sample size of 256 individuals working and owning SMMEs. The Raosoft sample size calculator was used for the sample size determination. SPSS Process was used to test if job insecurity mediates employment contracts and small business development. The empirical outcome suggests that employment contracts have a predictive effect on SMME development and that the turnover intention had a full mediation effect between employment contracts and small business development.