Employee Retention Strategies in Informal MSMEs: The Role of Compensation, Work Flexibility, and the Work Environment

Abstract

Employee retention is an important issue for the sustainability of informal MSMEs because job characteristics, compensation systems, time flexibility, and work environment conditions can affect businesses' ability to retain their workforce. This study aims to analyze employee retention strategies in informal MSMEs by focusing on compensation, work flexibility, and work environment. The research uses a descriptive qualitative approach through re-analysis of previous research data on wage and employee turnover policies in broiler chicken trader MSMEs in Sumber Bendo Hamlet, Pule Village, Kandat District, Kediri Regency. Previous research data was obtained through in-depth interviews, direct observations, and document analysis, which were then re-analyzed with the perspective of employee retention. The results of the analysis show that the ability to retain workers in informal MSMEs is not only determined by compensation, but also by work flexibility, work environment, and sustainability of workforce skills. Production-based compensation systems provide opportunities for increased revenue as the volume of work increases, while bonuses can be an additional reward strategy. The flexibility of work that arises from the night work pattern provides value for some workers because it allows for other activities during the day, although these conditions also have the potential to cause fatigue. The work environment can be strengthened through clearer division of tasks and mentoring new workers, while workers' multitasking skills are an asset that needs to be maintained through skill transfer. Based on these findings, employee retention strategies in informal MSMEs need to be built through a combination of adaptive compensation, work flexibility, a supportive work environment, and the sustainability of workforce skills