Employee retention as a strategy for gaining competitive advantage among hotels in Nairobi

Abstract

The last five years have witnessed a phenomenal growth in the number of hotels entering the Nairobi market. Seventeen hotels have opened in the last one and a half years, and currently eight more hotels are under construction with thirteen more hotel projects having been committed. Expansion of such a massive scale is likely to result in both intensified competition for customers and for recruitment and retention of employees. This study was anchored on the resource based theory and the human capital theory to develop employee retention as an organizational capability in hotels and other service intensive organizations, and empirically examined the relationship between retention and competitive advantage. Data was sought from human resource managers of 53 hotels in Nairobi. 34 of them filled the questionnaires giving a response rate of 64%. Data was analyzed using simple regression analysis. The results of the analysis revealed that the coefficient of correlation was 45%, coefficient of determination was 20% and the coefficient of the predictor variable (employee retention) was 46%.These results confirmed that employee retention had a high positive impact on the competitive advantage in the hotels. It was therefore concluded that employee retention has a strong positive contribution to competitive advantage in Nairobi hotels and by extension to other service intensive organizations. Following these findings, it was recommended that there was need for hotels to develop employee retention capabilities that have the effect of encouraging and motivating employees to stay with the organization for longer tenures as a strategy to enhance sustainable competitive advantage.