Owner-manager businesses and youth employee perceptions

Abstract

Purpose

The purpose of this paper is to empirically examine the perspective of youth employees about owner manager businesses. The owner-manager business (a one-man business) is the most common in Lagos. Hence, an inquiry into their management style and how it impacts youth employees within the context of decent work is important to explore.

Design/methodology/approach

The study used the convenience sample technique to obtain data from 382 owner-managers and youth employees who work in owner-managed businesses across various sectors. They were administered a questionnaire with carefully structured questions, with an 81% return rate. The exploratory factor analysis (EFA) technique was used to identify the prominent parameters, and the hypothesis tested and validated accordingly.

Findings

The study identified three prominent factors that youth consider when working for an owner-manager business, i.e. the workplace factor, geographical factors and employee benefit. Consequently, issues regarding sustainable employment, conducive working conditions, job security and pension are paramount in the youths' view. Many owner-managers do not respect labour laws, and job security is low in owner-managed businesses; hence, they experience high turnover as most youth work in one-man businesses to gain experience.

Originality/value

The owner-manager business is the most predominant in the country and yet is under-researched. Furthermore, the perception of youth employees regarding owner-manager businesses provides a better understanding of performance and expected satisfactory outcome required from youth employees and how they can be met through proper channelling of their energies to the right tasks.

Citation

Adeosun, O.T. and Owolabi, T. (2023), "Owner-manager businesses and youth employee perceptions", Journal of Business and Socio-economic Development, Vol. 3 No. 2, pp. 97-117. https://doi.org/10.1108/JBSED-03-2021-0032

1. Introduction

The drive to achieve sustainable economic growth, full and productive employment, and decent work for all (Sustainable Development Goal 8) is still a formidable challenge throughout Sub-Saharan Africa, including Nigeria. With respect to the youth segment of the labour market, challenges are especially acute. In developing countries, achievement of sustainable growth mandates that the economic value creation potential of youths be harnessed and actualised; while striving towards this objective, all stakeholders in the economy must work in unison and collaborate so that youth can seamlessly access decent work linked to liveable wages, job security and productive work settings, amongst other metrics (Tatsiramos and Van-Ours, 2014; Cazes et al., 2015). Globally, Nigeria has the highest percentage of the population, at 39.9% of 18- to 64-year-olds, who are either entrepreneurs or owner-managers (Global Entrepreneurship Monitor, 2015). However, the value they are creating as agents of accretion of human capital is debatable. The capacity to expand and create value may depend on their ability to incentivise prospective employees, with offers of decent employment, to deter job turnover sufficiently that serves to add long-term decent value to the business.

For the youth segment of the labour market, decent work is important for a cascade of cogent reasons; economically unengaged youth exhibit a propensity, as a manifestation of frustration, to channel their energies into societally counter-productive criminal activities. Such disaffected youth subtracts from, rather than adds to, national income while increasing the governance costs by raising law enforcement costs whose stretched budgets could otherwise have been allocated to more economically productive uses (Turanovic et al., 2015; Wardhaugh, 2017). During the fourth quarter of 2020, youth unemployment (among 18- to 24-year-olds) stood at 38.5% (as opposed to 17.5% for the overall workforce); adding youth underemployment levels to that of the youth unemployment levels yields a combined 53.4%. Indicative of the scale of the problem is that more than 53.9% of the population is 35 years of age or younger in Nigeria. Lagos has the largest percentage of youth of any Nigerian state National Bureau of Statistics (NBS, 2020a, b).

Early career experience serves as an important predictor of the future value to the economy that youths will generate, whether as future employees or entrepreneurs (Adegoke, 2015; Akanle and Omotayo, 2019). That new businesses, many of which are organised as proprietorships run by owner-managers, achieve survival rates of less than 20% (UNIDO, 2017), demonstrates the precariousness of employment reservoirs into which youth employment are primarily channelled. However, owner-managed businesses retain the hope of providing employment based on their sheer numbers. Innovative management is key if they can generate career tracks sufficient to attract and retain talented youths. Given acute financial constraints, it is unclear how owner-managers can meet these expectations that seem unrealistic in practice. Initiatives and programmes that can be developed by a collaboration between the private sector and government in the areas of compensation and benefits, work environment and culture, and job security are at a nascent stage.

An owner-manager enterprise, popularly called a “one-man business” in the Nigerian labour market, is often associated with precarious terms and conditions (Pitan, 2015; Nzewi et al., 2017). Undoubtedly, the average graduate employee regards the phrase “decent employment in owner-managed business” as oxymoronic. For such employees, the situation is exacerbated under conditions in which owner-managers operate family businesses in which spouses, siblings or relatives dominate management. In addition, there are large one-man businesses that exercise an overweening influence on management. Dysfunction is especially prevalent under conditions in which the board is just one person with minimal regard for corporate governance, processes, procedures and best practices. Having often been established more out of necessity than out of opportunity or innate desire to be entrepreneurs, the typical owner-manager cannot run their business relying on any best practice or personal experience (Bass, 2015; Jaouen and Lasch, 2015), mainly placing short-term gains ahead of long-term sustainability as a corporate objective; as such, they often struggle to separate the management function from ownership interests.

With over 500,000 graduates churned out annually, Nigeria acutely suffers a high ratio of young people demanding jobs in relation to job supply, which is responsible for creating and sustaining a youth employment gap (Adebakin et al., 2015; Olayiwola et al., 2016). The disparity between graduates and quality jobs, and the fear of unemployment, pushes the average jobseeker to grab the first opportunity irrespective of perceptions of job quality. Given that owner-manager businesses abound in Lagos, many youths inexorably gravitate there to start their career journey, forfeiting more coveted employment with multi-national corporations (MNCs), limited liability companies or privately held firms with multi-stakeholder ownership. Increasingly, the hiring trends of MNCs, vis-à-vis newly minted graduates, are flat due to the adoption of capital-intensive techniques dampening the rate at which new entry-level jobs are created, hence reducing the probability of youths securing employment with them (Mitra and Jha, 2016; Aydalot and Keeble, 2018).

Many researchers have exhibited a keen interest in examining owner-managed enterprises from a variety of perspectives (Adeosun and Shittu, 2021; Centeno et al., 2019; Steinerowska-Streb and Wziątek- Staśko, 2019; Ghobakhloo and Tang, 2013). Ghobakhloo and Tang (2013) reviewed the role of owner-managers in the adoption of electronic commerce in small business, while Centeno et al. (2019) examined the interplay between owner-managed small and medium-sized enterprises (SMEs) and brands. In addition, Steinerowska-Streb and Wziątek-Staśko (2019) investigated owner-managers' knowledge development and innovation in family firms. By contrast, however, the perception of the owner-managers held by employees, especially the youth, has received comparatively little attention, a gap that this paper intended to fill from the current research; the core common characteristics of owner-manager businesses in Sub-Saharan Africa, especially in Lagos, Nigeria, are to be analytically presented with a view, in particular, to ascertain whether there are consistent patterns in youth employee perceptions with respect to these characteristics.

Projecting from this analytical edifice while contributing to the literature gap, it is expected that new insights and policy recommendations from a developing country perspective will be gained. Four key levels have been identified for which this paper would be useful to: the government (national, state and local), the business community, youth development organisations and educational institutions. It would assist the government to formulate and improve the policy frameworks for youths and their engagement as employees in businesses. With this framework, it would be possible to monitor the involvement and participation of youths and business managers in the labour market, hence ensuring that labour laws are expressly followed by owner-managers. To the business community, the understanding of youth perception of owner-manager businesses would enable them to mentor young people better about understanding the dynamics of their respective businesses. Youth development organisations could utilise this to promote values and the essence of entrepreneurship development among youths. In addition to informing the educational institutions, the study will enable the empowerment of youths with regard to entrepreneurial skills, as well as a programme for internship in SMEs.

2. Literature review

Studies into owner-managed enterprises have expanded greatly in recent times, and a greater knowledge of related concepts is being revealed. As creators of SMEs, owner-managers are seen as entrepreneurs (Campopiano and De Massis, 2015), who, through risk-taking, manifest a drive at the microeconomic level for revenue growth and profit maximisation, and these SMEs stimulate employment and economic growth at the macroeconomic level (Hasle et al., 2011; Litau, 2018). Control wielded by single individuals, who serve invariably as the chief executive officers and/or chairmen of the board, by definition characterises a one-man business, the archetypical description of an owner-managed enterprise in Nigeria (Erdem and Erdem, 2011; Mazzarol and Reboud, 2017). Despite all the odds faced in relation to the instability in the Nigerian business environment, the entrepreneurs possessing this “can do” spirit that permits navigation through a morass of challenges to chase prospects despite the harsh business climate, have proliferated and prospered (Etebefia and Akinkumi, 2013; Chinonso and Zhen, 2016). On this basis, accordingly, the Global Entrepreneurship Monitor (2018) has adjudged Nigeria as the ninth highest ranking county in terms of entrepreneurial activities.

In entrepreneurial endeavours, autonomy, independence and an aspiration to provide goods and services represent the important drivers. However, with this autonomy and independence, some Nigerian owner-managers exhibit an unwillingness to grow their businesses beyond a certain threshold out of fear of losing managerial control (Hasle et al., 2011; Lobontiu et al., 2017). Apart from this psychological barrier, these businesses, while simply structured organisations, are often complicated by a web of interrelationships between business and family (Powell and Eddleston, 2017). In addition, a daily struggle for survival (Onaolapo et al., 2011; Julien, 2018) stems from a high level of uncertainty from the outside world (Mukherji and Mukherji, 2017). Owner-managers generally position their entire life around their business and often delegate to family members active managerial roles in running all aspects of the business enterprise (Mattson and Hass, 2014), spanning the creating, repairing, maintaining and sustaining it (Hasle et al., 2011).

Against this backdrop, understanding youths' perception of this type of business structure is important to researchers and business scholars alike (Adeosun et al., 2021; Warrick et al., 2010). Upward trends in revenues generated by owner-manager businesses fuel demand for talented youths (as previously mentioned, target careers where attainable at MNCs) and consider these small businesses simply as fallback options (Chua et al., 2015). From both a micro and macro perspective, it is imperative to identify which key factors drive these preferences adverse to employment in owner-managed enterprises in relation to all stakeholders. To this end, researchers have adduced owner-manager perspectives from data drawn from youth employees. Several common characteristics of these owner-managers can be highlighted.

In owner-managed businesses, transactions are more personalised and casual than those carried out in bigger organisations (Kotlar and De Massis, 2013; Bozer et al., 2017). Owner-managers and youth employee engagement occur every day in close quarters. In larger organisations, contact between senior management and youth rank-in-file is low because of the intercession of gatekeepers whose role is to maintain significant space between senior managers of larger organisations and the lower-level employees (Mazzola et al., 2013; Burns, 2016). As a result of this proximity, owner-managers have vested the responsibility to modify delinquent youth employees to conform to owner-manager-set workplace norms. From their perspective, youth employees perceive the behaviour of the owner-manager in the workspace as overbearing and unfair, and, in extreme circumstances, unlawful (Hasle et al., 2011). The findings by Adeyemi (2014) document frequent interference in daily operations as another facet of owner-manager businesses with youth employees on the payroll; exerting and monopolising power, business owners routinely meddle in business operations to such an extent that it is logical to infer they have little, if any, trust in their employees. Alaye-Ogun (2012) attributes this interference to a lack of good management structure in owner-manager businesses. Even when this structure exists, it is not strictly adhered to; this gives rise to owner-managers contravening established rules that they previously ordained (Hatten, 2012). Olatunji (2013) stated another element of inefficiencies inherent in owner-managed enterprises is succession planning. As a recourse to secure the business within the family, designated successors of an owner-manager business are commonly family members, often sidestepping more experienced and competent non-family personnel the late owner-manager had employed to manage the business day-to-day (Okeke et al., 2013; Kevill et al., 2017).

The importance of an amenable “secured” working environment in relation to the level of job satisfaction reported by youth employees working in SMEs owned by owner-managers cannot be underestimated. Specifically, organisations characterised as embedding a “secured” working environment generally evince good corporate governance process (Watkins, 2018), imbue career satisfaction in employees, treat employees with dignity and fairness, provide opportunities for employees to exercise initiative and creativity, and reward innovation and challenges to the status quo undertaken by employees (Wall and Bellamy, 2019). Under conditions in which they work according to a job schedule that suits them and through which they experience job fulfilment, as manifested by attainment of accomplishments and low absenteeism, youth employees are satisfied in the context of such a “secured” working environment spanning the physical, social and psychological dimensions (Agbozo et al., 2017).

As a result of the high unemployment rate in Nigeria, laying employees off or staffing them alternatively based on pre-conditions seems to be the norm in many workplaces undermining the “secured” work environment (Abolade, 2018). Moreover, given the widespread uncertainty among them concerning longevity of vocational tenure as a result of threats expressed and implied from their owner-managers, employees exhibit high anxiety with respect to the risk of job loss. By contrast, job security motivates employees to experience peace of mind and brings a sense of satisfaction and belonging when employees know their jobs are secured or safe and are afforded the opportunity of planning and taking decisions concerning their personal lives (Abolade, 2013).

Employee well-being is a merit unto itself. In asking an important question frequently facing top decision-makers with respect to how to best structure employee compensation in terms of the ideal mix between salary and benefits, Krekel et al. (2019) link employee benefits with the subjective well-being of workers and advises that employee benefits be prioritised, even though implementing policies that support worker well-being are highly resource-intensive. Their research demonstrates that employee benefits such as health insurance and pension schemes serve the interest of management by engendering improved job performance through enhanced employee motivation. Such benefits, serving as a kind of social safety net, impart to employees a feeling of security in the event of adversity and with benefits that kick in when they are no longer able to take care of themselves. However, it has been pointed out by Owolabi and Ajibose (2019) that health benefits transcend the provision of health insurance by encompassing the flexibility to accommodate work–life balance for employees. Regarding the hypothesis that will be tested in this study, it is important to define the following: secured environment simply means a process set to protect all employees from injury, workplace illness and intruders. It is necessary for all companies to have a workplace safety plan where their employees' environment, health and safety are of great concern. Provision of security systems such as CCTV, biometric scans and other devices also help enhance a secured environment for employees. On the other hand, a high probability of job security and there is absolutely no fear of being dismissed is another form of safety. According to James (2012), it simply means an assurance of job continuity for an employee in a tenuous environment, either due to low turnouts or economic recession, as the fear of being dismissed or laid off can significantly challenge an employee's commitment to their job.

2.1 Theoretical framework

This study draws on the insights on organisational behaviour imparted from the social exchange theory – amalgamating a mix of sociology, economics and psychology – as propounded by Blau (1964) and Antonucci et al. (2014). The social exchange theory involves investigating the social behaviour of two agents from the perspective of cost–benefit analysis with a view to determining costs and risks, on the one hand, and benefits, on the other, in any relationship. Blau compares human interactions within the marketplace (Cook and Rice, 2016), in that each individual attempt to maximise his or her successes. He opined that, once uncovered and rendered explicit, social exchanges are found to be ubiquitous in any relationship, including that between owner-managers and youth employees. The theory further posits that the employment relationship involves trade-offs between time, freedom and patience, on the one hand, and compensation, on the other, in the sense that almost every employee, at some time or another, questions the merit of continuing in the employment relationship. On the other hand, should they refrain from resigning, employees have determined that the benefits outweigh costs and risks despite what they perceive as being “bad” about their jobs. In effect, the psychological contract is formed between business owners and workers (Atkinson, 2008; Casidy and Nyadzayo, 2019) in which the two parties extract from each other certain vocational obligations as a basis for the employment relationship. Accordingly, in assessing their jobs, the youths weigh vocational costs and risks, on the one hand, and benefits, on the other, and then conclude if the relationship between them and their owner-managers is profitable or not. Labour retention or, alternatively, labour turnover proceeds from the results of that assessment.

Kunkel's theory of entrepreneurship supply was also utilised in the study, as propounded by John H. Kunkel. Kunkel was of the belief that sociological and psychological factors influence the emergence of entrepreneurs (Kunkel, 1991). In relating the supply of entrepreneurs with the social, political and economic structure in the economy, Kunkel conceptualised four structures needed for supply of entrepreneurship, demand structure, opportunity structure, limitation structure and labour structure, the last of which is relevant to this paper. In Kunkel's opinion, the labour structure is a function of the availability of skilled workforce juxtaposed with the willingness of that workforce to work in any particular economy (Balu, 2001). In Lagos, the supply of cheap skilled labour outweighs its demand, giving rise to an oversupply of labour, especially for youths seeking entry-level positions. This has driven down the market-clearing price for establishing an employment relationship with many owner-managers exploring the receptivity of labour to work in the absence of a liveable wage, sustainable employment, conducive working conditions and job security. Kunkel's theoretical construct on the labour structure reflects the current state of the job market in Lagos state, hence the suitability for this study. To this end, from that theoretical construct, the following null hypotheses are obtained:

H1.

Secured working environments do not exist in owner-managed enterprises.

H2.

Job security is absent in owner-managed enterprises.

H3.

Employee health benefits are absent in owner-managed enterprises.

3. Data, methods and descriptive analysis

3.1 Design and study setting

For this study, primary data are gathered through a questionnaire distributed to “youths” between 18 and 35 years of age, in keeping with the African youth charter classification, currently engaged as employees in owner-managed business in Lagos, Nigeria, who collectively constitute the study population (N), where N = 8,395, according to the latest population of 8,395, which represented the number of registered SMEs in the Lagos state as of 2017 (National Bureau of Statistics, 2019). This study incorporates a cross-sectional research design; data were analysed using the standard descriptive and analytical statistical methods, and enabled by the SPSS software.

3.2 Sampling and size

For determination of sampling size, this study uses the Taro Yamane formula with the application of normal approximation at 95% confidence level and 5% error tolerance. The formula, according to Mendenhall et al. (2017), was given as:

(1)n=N/(1+Ne2)

where:

• N = population = 8,395, n = sample size; and

• e = margin of error at 95% confidence interval.

Using the formula, a sampling size of 382 was adopted. For distributing questionnaires, the purposive sampling technique was used in this study, given the impracticality of random distribution to potential recipients and the issue of identification and access of youth employees widely distributed in a sprawling metropolis such as Lagos. In addition to this was the fact that there was no sampling frame for the population of owner-manager businesses in the Lagos state. A homogenous sampling technique was used within this genre, given the similar attributes of the subgroup (youth employees) recognisable ex ante. Given that the researcher only had access to a limited number of primary data source venues, the purposive sampling method is apt. The purposive sampling method is also warranted in sociological contexts where “discovery of meaning can benefit from an intuitive approach” (Saunders, 2012).

3.3 Research instrument and data collection

A questionnaire with a carefully structured Likert scale was used. It contained both open and close-ended questions, and was distributed to 382 youth employees who work in owner-managed businesses. In the course of administration, respondents were closely guided and monitored in the course of their filling out the research instruments because of the need to ensure quick collection of complete and accurate data. However, in the process of data collection, the researcher adhered to ethical issues and principles. Only respondents who provided informed consents were permitted to participate in the survey, and no informant was in any way coerced or forced to participate. Identities of informants are confidential, and in addition, the researcher pledged that any data collected from the questionnaire would only be used for academic research purposes and, in no event, be disclosed to any external party.

The exploratory factor analysis technique (Watkins, 2018) was used to identify the prominent factors in the study. These factors were further subjected to a reliability test [principal component analysis (PCA)] to determine the reliability of the result. Finally, regression analysis was employed, the dependent variable was “one-man business”, regressed against the three independent variables obtained through factor analysis: (1) health benefits, (2) job security and (3) “secured” work environment.

3.4 Correlation and chi-square test

Correlation coefficients were used to measure the strength of association between the variables, the strength or degree of relationships or association among variables. Pearson correlation coefficient is given as:

(2)r=N∑ xy−(∑ x)(∑ y)/([N∑ x2(∑ x)2][N∑ y2(∑ y)2])−1/2

where:

• N = the number of pairs of scores;

• Σxy = the sum of the products of paired scores;

• Σx = the sum of x scores;

• Σy = the sum of y scores;

• Σx² = the sum of squared x scores; and

• Σy² = the sum of squared y scores.

In addition, the chi-square test was used. The chi-square test statistic always compares differences between the expected and the observed results with respect to the size of the sample and the number of variables in the relationship. The statistic is given as:

(3)X2=∑ [(Oi−Ei)2/Ei)]

where:

• Χ² = chi-squared;

• O_i = observed value(s); and

• E_i = expected value(s).

3.5 Measurement of variables

In understanding the relationship between owner-manager businesses and youth employees' perception, the independent variable will be the owner-manager business, while the dependent variable will be the youth employees' perception. The latter would be measured from a secured working environment, job security and health benefits. Specifically, the secured working environment is measured as the organisation having a clear corporate governance process (Watkins, 2018), an environment that provides career satisfaction, employees being treated with dignity and fairness, and the employees the freedom to exercise their initiative and creativity and the ability to challenge the status quo (Wall and Bellamy, 2019). Job security is also measured from the point of view of adequately providing room for career progression (Owolabi and Adeosun, 2021) and also ensuring that the turnover is minimised to the letter. Furthermore, job security in the workplace means that an employee cannot just be fired without a just cause, as well as the guarantee of payment for a job done.

Lastly, health benefit is measured by providing adequate room for work–life balance (Owolabi and Ajibose, 2019) and health insurance for employees.

Apart from demographic data (age, sex, education level), all subjective perceptual data are ordinal using a Likert scale from 1 to 5, with 1 equivalent to strongly disagree and 5 equivalent to strongly agree.

4. Results presentation

The demographic characteristic of the respondents, as observed, is presented in Table 1. Gender representation is 47% male versus 53% female. The majority of respondents fall between the ages of 24 and 29 years, and this points to the fact that owner-managers, in response to strict budget constraints, prefer to hire young talents to economise wages paid out. However, young employees see owner-manager businesses as a platform to build abilities and gain valuable experience to secure a better job in the future. This is corroborated by high employee turnover experienced by owner-manager enterprises. The mean employee incumbency hovers around seven years, indicating a substantial capacity for owner-manager business relationship in the best managed enterprises retaining youth employees in early career stages despite high prevailing turnover rates. From the survey outcome, most of the males predominate as SME owner-managers at 82%, with females engaging in one-man businesses. Furthermore, most of the owner-managers fall in the age category of trailing at 18%. While a matter of conjecture, stability and risk aversion during childbearing years arguably deter women who are contemplating setting up one-woman enterprises as entrepreneurs. As the United Nations Industrial Development Organisation (UNIDO, 2017) reported, only 20% of SMEs survive in Nigeria beyond five years, which is not sufficient time for defraying the costs of child-rearing.

Most owner-managers fall in the age bracket of 31–40 years, followed closely by that of 41–50 years. This shows that youths generally eschew the establishment of their very own one-man enterprises preferring instead salaried employment as wage earners.

The scree plot depicts the number of answers elicited from respondents. In total, 49 questions were asked in different categories. Eight factors were extracted using the Brian O'Connor parallel analysis (O'Connor, 2000). The 49 questions can be reliably grouped into eight categories, each contributing to the factor it represents. A further reliability test was conducted to allow for extracted components to be tested against the computer-generated eigenvalue. The components are kept only if the calculated value is lesser than the actual value. The outcome shows that only three factors were found to be reliable from the eight initial components extracted. The three factors have a Cronbach's alpha contribution of over 0.700, which is the study's correlation benchmark.

The factor analysis in Table 2 provides three key factors youths explore in choosing to take up jobs with owner-managed businesses:

1. Workplace factors or relationships (pertaining to the attractiveness of the state enterprise from the employees point of view across dimensions such as dignity as work and availability of opportunities for advancement on the job);

2. Geographical factors (pertaining to advantages inhering from working in Lagos through monitoring of the labour law by the government to a degree greater than that in other regions); and

3. Employee benefit factor (pertaining to do welfare of the employees on the job).

While insufficiently resourced to match compensation packages that MNCs can provide to their employees, owner-managed enterprises, according to results presented in Table 3, do allow annual leave as well as parental and maternal leave; however, about 51% of the respondents report that they are routinely denied leave bonuses. Another key discovery is that most owner-managed businesses refrain from the provision of retirement benefits. Over 65% of the respondents indicated the absence of pension benefits, leaving retirees with no economic cushion. Another insight from the survey is the high turnover rate (56%) experienced by owner-managed enterprises. Furthermore, perceptions of youth employees on job security indicate job dissatisfaction, with about 72% of the respondents maintaining that a one-man business does not offer job security. Finally, the results from the survey show that many owner-manager businesses take advantage of their employees to various degrees and in a myriad of ways. Many youth employees report being muzzled by owner-managers, with no right to express thoughts on important vocational matters. In more extreme cases, others report that owner-managed businesses routinely flout labour laws, expressing disdain for labour standards and employee rights.

Table 4 provides insights into the employee–employer relationship. Most respondents describe the working relationship as just manageable. Only about 19% enjoyed a cordial working relationship, while approximately 18% experience an overtly hostile relationship. Salaries are widely reported to be inadequate and not paid as regularly scheduled, within designated time periods, but haphazardly.

4.1 Testing the hypothesis

Table 5 summarises the correlation among the variables. Explaining the strength of relationships between the dependent and independent variables, for instance, a negative correlation of −0.002 was obtained between “health benefits” and “one-man business”. The negative correlation posits by inference why owner-managed enterprises resist the provision of health benefits to employees in as much as an increase in health benefits will reduce its business revenues by at least 0.2%. By contrast, there is a positive correlation of 0.059 between “one-man business” and “job security”, leading to the main inference that revenues of owner-managed enterprises should grow commensurate with the level of job security afforded to employees. Finally, there exists a positive correlation (0.106) between “one-man business” and “secured working environment” indicative of owner-operated enterprises cashing in on enhanced labour productivity on the part of more motivated workers.

4.2 Impact of secured working environment

From Table 6, the chi-square analysis, with respect to “secured” working environment, has a statistic of 11.444 and a p-value of 0.022 less than the standard decision criterion of 0.05; therefore, the null hypothesis is rejected, and it is concluded that owner-managers provide secured environments for their employees in the workspace.

Table 7 shows the regression relationship between the variables. Owner-manager-dependent variable expressed as returns to labour from secured working independent environment variables: “One-man businesses pay well”, “One-man businesses pay salaries on time” and “One-man business pay pension”. Overall, the model was significant, with a 9.9% variation observed among the variables. Moreover, the Durbin–Watson statistic was also under the threshold (0.884), signifying a robust model. However, the results show that one-man businesses neither pay well nor pay out pensions as they were not significant in the model.

4.3 Impact of the provision of job security

From Table 6, with respect to job security, the chi-square analysis has a statistic of 6.503 and a p-value of 0.165, exceeding the standard decision criterion of 0.05; therefore, the null hypothesis is accepted and concluded that owner-managers do not provide job security for their employees.

Table 8 shows the regression relationship between the variables. Owner-managers providing job security were measured by job security, career progression, training opportunities and employee turnover. Overall, the model was significant, with 19.7% variation observed by the variables. The Durbin–Watson statistics were also under threshold, signifying a robust model.

4.4 Impact of the provision of health benefits

From Table 6, for health benefits, the chi-square analysis has a statistic of 3.703 and a p-value of 0.448 higher than the standard decision criterion of 0.05; therefore, the null hypothesis is accepted, and it is concluded that owner-managers eschew provision of health benefits for their employees.

5. Discussion

This paper seeks to explore the perception of youth employees of owner-manager businesses in Lagos, Nigeria. Evidence from the study suggests that most of the respondents use an owner-managed enterprise as a jump-off point before proceeding to more structured organisations with better corporate governance. Young employees regard an owner-managed enterprise as a halfway house to build capacities and gain valuable experience rendering them qualified to secure a better job in the future. It was discovered that, owing to comparative risk factors between the genders, over 80% of the owner-managers are the less-risk-averse sex (male). Youths less than 30 years of age own just 7% of owner-manager enterprises. However, youths are the employee of choice in owner-managed enterprises and, therefore, should be recognised as being a strong factor in the development and survival of multinational enterprises (MNEs) in Lagos state. This study identified three prominent factors that youth consider in their decision to accept job offers: opportunities for professional development and promotion, comfortable working conditions and job security.

Yet, job security is low in owner-managed businesses, and high turnover is, therefore, endemic. Although incurring substantial risk combined with marginal rewards, taking up employment in an owner-managed enterprise in Lagos offers youth offsetting utility stemming from a greater supply of entry-level jobs than in other regions; it also offers a more aggressive monitoring of employers in Lagos to raise the level of compliance with labour laws than in other states. As a result, youth regard employment in Lagos as geographically advantageous in terms of the greater potential to find more productive, fulfilling and dignified work. In relation to labour welfare and protection, nonetheless, an owner-managed enterprise falls short to the extent that respect for labour laws, despite governmental monitoring, is lax. In addition, owner-managers demonstrate a predilection for an autocratic management style that affords employees hardly any leeway to express opinions on matters that affect them. Social protections, if not entirely absent, are at best meagre.

In most owner-managed enterprises, working conditions are below average, and only a very few owner-managers have a cordial working relationship with their employees. Salaries are paid sporadically at a time and level of the owner-managers choosing. Almost exclusively, pensions are beyond reach. Despite being an important source of employment generation and career development for youths in the country, an owner-managed business suffers acutely from poor management and negative disposition towards employee welfare, generating high staff turnover jeopardising, in the long term, SME business growth – if not survival. Youth aspires to secure employment in organisations offering, at the environmental level, amenability and flexibility coupled with a degree of authority in decision-making. There is a clear understanding of what newly minted graduates are aspiring for when looking for jobs.

However, rather than taking the long-term view, owner-managers seek to take advantage of a glut in the labour market to the detriment of workers by cutting back on rewards offered to attract and retain reliable and productive youth employees. To ensure the sustainability for their business, owner-managers would be well-advised to ameliorate working conditions to reduce expected future turnover rates linked to the high cost of losing experienced employees whose human capital has been elevated on the learning curve through investments made in them by owner-managed enterprises. At the same time, in the interest of both youth employees and owner-managers, the government ought to allocate greater resources to the monitoring and enforcement of labour laws in SMEs, as well as enacting further legislation that enhances social protection and employee rights in general. In doing so, costly future turnover may be modulated, rendering it more probable that the owner-managed enterprises can retain the talent needed to manage their operations sustainably.

6. Conclusions

This paper posited three hypotheses concerning perceptions of youth employees of owner-managed enterprises in Lagos, Nigeria. The first hypothesis tested explored whether owner-managers provide secured work environments for their employees or not. The test shows that owner-managers do provide a secured environment with a p-value of 0.022 less than the 0.05 decision criterion. This outcome is consistent with Raziq and Maulabakhsh (2015), who underscored a positive correlation between employee performance and work environment. The second hypothesis tested whether owner-managers provide job security to their employees or not. The resulting p-value of 0.165, in excess of 0.05 decision criterion, indicates that owner-managers refrain from the provision of job security to their employees – with negative implication for the sustainability of SMEs.

Sanyal et al. (2018) elucidated the significant detrimental toll that a loss of job security impacts on employee performance. Employees will not be motivated to work effectively when owner-managers withhold job security. In turn, cultivating labour inefficiencies act to reduce business revenue. The third hypothesis tested whether owner-managers provide health benefits to their employees. The resulting p-value of 0.448, in excess of the 0.05 decision criterion, indicates that they refrain from the provision of health benefits for their employees. Yet, the productivity of an unfit employee can only be impaired, and a sick employee forced to be present at work may serve to affect the whole workforce – a point of salience during the current COVID-19 pandemic. Krekel et al. (2019) point to the short-sightedness of denying employees health care in finding empirical evidence to support the contention that improved job performance is linked with the provision of employee benefits such as health insurance, which, in terms of productivity gains, more than compensates the enterprise for the cost of provision of these benefits.

This research highlights youth feedback for sole proprietor-employers, who can garner valuable information that offers guidance as to how, by better allocation of human resources to tasks, potential revenue can be maximised through the achievement of efficiencies derived from enhanced youth labour productivity.

6.1 Limitations and future research

This study explored the perceptions of youth employees of owner-managed enterprises in Lagos, Nigeria. However, the study did not consider whether variations occur across different sectors of industry or whether the phenomena uncovered in this study cut across sectors of industrial activity uniformly. Therefore, further study could consider the developmental impact of whether youth employee perceptions vary by sector of industrial activity. In addition, the geographical scope might be enlarged to cover other Nigerian states to explore whether there are geographical variations in perceptions of an owner-managed enterprise or whether such perceptions are essentially monolithic across Nigeria. The survey technique was questionnaire only, and no focus group interviews on youth employees were conducted. Such qualitative input from the respondents would have complemented the quantitative data collected, leading to insights that quantitative techniques alone might not uncover. From an opposite perspective, further studies should explore the perception of owner-managers on youths' employment. In addition, research should be conducted to see if the owner-manager has a youth or non-youth impact on the outcomes or perspective. Finally, perceptions can also be measured by how satisfied youths are with their jobs in terms of, among other things, on-the-job learning, autonomy in carrying out business tasks and supervision.

Table 1

Demographic characteristics of the sample

	Frequency	Percent
Gender
Male	145	47
Female	164	53
Age group
18–23 years	25	8
24–29 years	175	57
30–35 years	109	35
Highest educational qualification
Secondary	7	2
Tertiary	197	64
Post-graduate	69	22
Professional membership	36	12
How long have you been working?
Less than 1 year	13	4.2
1–3 years	89	28.8
4–7 years	92	29.8
8–10 years	71	23
11 years and above	44	14
Gender of the one-man business owner
Male	254	82
Female	55	18
Age range one-man business owner
Less than 30	22	7
31–40 years	87	28
41–50 years	85	27
51–60	76	24
61 and above	39	13

Source(s): Author's computation, 2020

Table 2

Factor analysis

	Factor	Cronbach's alpha
Factor 1: Workplace factor
Treat all employees with fairness and dignity	0.78
Encourages freedom of thought and challenge status quo	0.70
Provide career satisfaction	0.62
Owner-manager business has clear corporate governance	0.44
Owner-manager businesses provide career progression	0.66
Social dialogue	0.67
Owner-manager business provides training opportunities	0.69	0.89
Allows employee exercise their initiative and creativity	0.55
One-man business provides job security	0.55
Sustainable employment	0.61
Allow employee express opinion on issues bothering them	0.51
Promote conducive working arrangement	0.50
Workplace relationship in a one-man business	0.42
Factor 2: Geographical factor
Lagos promotes dignifying work	0.79
Lagos promotes productive work	0.77
Lagos promotes gender equity	0.66
Lagos offers opportunities for work	0.61	0.87
Lagos promotes freedom of choice of employment	0.62
Job security	0.62
Lagos promotes conducive working arrangement	0.47
Lagos promotes good workplace relationship in a one-man business	0.43
Factor 3: Employee benefit
Owner-manager business provides health insurance	0.63
Owner-manager businesses pay salaries on time	0.62
Owner-manager business provides retirement benefits	0.58	0.82
Owner-manager businesses give leave bonus	0.53

Source(s): Author's computation, 2020

Table 3

Perception of respondents on owner-manager business

	Strongly disagree (%)	Disagree (%)	Uncertain (%)	Agree (%)	Strongly agree (%)
Allow annual leave	7.87	28.35	21.26	33.86	8.66
Give leave bonus	25.40	31.75	23.81	18.25	0.79
Allow paternity and maternity leave	9.45	18.11	28.35	40.16	3.94
Provide health insurance	17.32	29.13	25.20	23.62	4.72
Provide retirement benefits	34.92	32.54	20.63	11.11	0.79
Provide job security	35.43	37.01	15.75	11.81	–
Provide career progression	22.83	39.37	21.26	15.75	0.79
Provide training opportunities	20.47	29.93	22.05	22.83	4.72
Employee turnover is high	10.24	10.24	22.83	35.43	21.26
Corporate governance	22.22	38.10	17.46	18.25	3.97
Career satisfaction	19.05	39.68	30.95	10.32	–
Fairness and dignity	18.40	41.60	26.40	10.40	3.20
Encourage creativity	12.00	25.60	28.00	29.60	4.80

Source(s): Author's computation, 2020

Table 4

Owner-manager businesses and employee protection

	Strongly disagree (%)	Disagree (%)	Uncertain (%)	Agree (%)	Strongly agree (%)
Follow labour standards	18.55	52.42	20.16	8.06	0.81
Fundamental principles and rights at work	15.45	43.90	21.95	17.07	1.63
Job security	4.92	25.41	16.39	40.16	13.12
Social protection	13.01	38.21	35.77	13.01	–
Social dialogue	9.84	34.43	33.61	21.31	0.82

Source(s): Author's computation, 2020

Table 5

Correlations among variables

	One-man business	Health benefit	Job security	Secured working environment
One-man business	1	−0.002	0.059	0.106
Health benefit	−0.02	1	0.094	0.080
Job security	0.059	0.094	1	0.210
Secured working environment	0.106	0.080	0.210	1

Source(s): Author's computation, 2020

Table 6

Testing hypothesis using chi-square analysis

	Statistic	df	p-values
Health benefits	3.703	4	0.448
Job security	6.503	4	0.165
Secured working environment	11.444	4	0.022

Source(s): Author's computation, 2020

Table 7

Regression analysis

Model summary
R	R-square	Adjusted R-square	Std. error of the estimate	Change statistics					Durbin–Watson
				R-square change	F change	df1	df2	Sig. F change
0.325	0.106	0.099	0.370	0.106	14.844	3	377	0.000	0.884

ANOVA
Sum of squares	Df	Mean square	F	Sig.
Regression	6.103	3	2.034	14.844	0.000
Total	57.769	380
Residual	51.666	377	0.137

Coefficients
	Unstandardised coefficients		Standardised coefficients	t	Sig.	95.0% confidence interval for B
	B	Std. error	Beta			Lower bound	Upper bound
(Constant)	0.546	0.045		12.190	0.000	0.458	0.634
One-man business pay well	0.044	0.017	0.140	2.553	0.011	0.010	0.078
One-man businesses pay salaries on time	0.048	0.014	0.185	3.345	0.001	0.020	0.076
One-man business pay pension	0.034	0.016	0.110	2.164	0.031	0.003	0.065

Source(s): Author's computation, 2020

Table 8

Regression analysis

Model summaryb
R	R-square	Adjusted R-square	Std. error of the estimate	Change statistics					Durbin–Watson
				R-square change	F change	df1	df2	Sig. F change
0.453	0.205	0.197	0.351	0.205	24.300	4	377	0.000	1.006

ANOVAa
	Sum of squares	df	Mean square	F	Sig.
Regression	11.977	4	2.994	24.300	0.000
Total	46.453	377	0.123
Residual	58.429	381

Coefficientsa
	Unstandardised coefficients		Standardised coefficients	t	Sig.	95.0% confidence interval for B
	B	Std. error	Beta			Lower bound	Upper bound
(Constant)	0.629	0.057		11.050	0.000	0.517	0.741
Provide job security	0.064	0.018	0.181	3.601	0.000	0.029	0.100
Provide career progression	−0.128	0.018	−0.409	−7.218	0.000	−0.163	−0.093
Provide training opportunities	0.084	0.016	0.294	5.203	0.000	0.052	0.116
Employee turnover	0.049	0.014	0.172	3.587	0.000	0.022	0.077

Source(s): Author's computation, 2020