The Root Causes of Employee Turnover in Social Enterprises: The Case of a Microfinance Organization

Numerous social enterprises tend to have difficulties retaining staff members. This paper aims to understand the root causes of staff turnover in social enterprises, with a specific focus on microfinance organizations, namely organizations that provide financial services to people excluded from the traditional banking system. Based on 36 semi-structured interviews conducted in a microfinance organization active in Latin America, our findings show that the reasons explaining staff turnover in those specific organizations may be sorted into six main categories, namely wage policy, recruitment policy, training and improvement, career planning, leadership, and working conditions. Our study contributes to the literature on staff turnover by highlighting the breach of the psychological contract as one of the main causes of turnover. It also contributes to the literature on social enterprises by showing that, despite the social mission they pursue, such organizations do not necessarily develop socially responsible practices for their employees.