Socio-economic Diversity and Employee Turnover in the Insurance Industry in Kenya

Abstract

Aim: The aim of this study was to examine the nexus between socio-economic diversity and employee turnover in the Insurance Industry in Kenya. The study also aimed to evaluate the moderating effect of firm characteristics on the relationship between socio-economic diversity and employee turnover in the insurance industry in Kenya. Methods: This study adopted a combination of descriptive and correlational research designs. The insurance companies from which data was collected were the top 5 insurance companies based on market share in general insurance. The employees of those companies were drawn from the following cadres: middle-level managers, heads of departments, supervisors, and operational staff. This study utilized multi-stage sampling technique involving deliberate sampling and stratified random sampling. A sample size of 338 employees was used in the study and data was collected using a semi structured questionnaire. Descriptive analysis entailed means and standard deviations while inferential analysis entailed regression analysis. Results: The study found a positive and significant relationship between socio-economic diversity and employee turnover in the insurance industry in Kenya. It was also found that firm characteristics have no significant moderating effect on the relationship between socio-economic diversity and employee turnover in the insurance industry in Kenya Conclusion: The study concluded that through effective and competitive salaries, rewarding and giving benefits and commissions to the employees without favoring others, the employees would not think of leaving their respective companies. Recommendations: The insurance companies through the management should ensure that they come up with competitive compensation structures for their workers, ensuring that varied pay is justified to mitigate employee turnover. The insurance companies should offer competitive salaries. Benefits, and commissions, should be given competitively to employees who are talented and who contribute much to the companies. This helps in steering employee productivity and retention thus enhancing firm performance. The Insurance Regulatory Authority and the Association of Kenya Insurers should put in place effective policies to ensure that the companies pay their employee's reasonable salaries.