The impact of open management on employee turnover in small information technology firms in South Africa

Abstract

The purpose of this research is to ascertain whether open management (OM) significantly reduces employee turnover in small South African Information Technology (IT) firms. Human Resource Management literature widely predicts that OM increases employee performance, commitment and retention. By 2010 there will be more than one-hundred-thousand unfilled IT jobs due to the skills shortage. The high labour demand and short supply introduces a counter force to the OM predictions, namely market-pull. This research tests the relative strengths of market-pull and loyalty created by OM practices by means of five hypothesis tests. The tests include OM awareness, historic turnover comparisons and turnover intention comparisons. Interviews were held with the owners of twelve small IT firms. Fifty-three employee surveys were collected. Most firm owners were not formally aware of OM. Historic turnover and future turnover intentions were lower in open managed firms, thus affirming current literature. The practical implications are that small South African IT firm owners should endeavour to understand OM and also adopt it, first to remain competitive and second to retain key employees. A possible model to predict turnover candidates based on open or closed rating is also proposed.