Employee management in the business plays an important role in the success of an organisation. Although the management activities in small and medium enterprises (SMEs) in North Central Vietnam have had several relevant changes in recent years, their management efficiency has been still quite limited. The study uses a quantitative research method through the structural equation modelling (SEM), with a scale of 377 samples of employees in SMEs, and aims to examine the impact of knowledge sharing on the effectiveness of employee management in SMEs in North Central Vietnam. Research results show that knowledge sharing has a direct and positive impact on the effectiveness of employee management. At the same time, in the relationship between these two factors, trust and opportunistic behaviour act as mediating factors. In addition, research also indicates that trust negatively affects opportunistic behaviour. Based on the research results, the authors propose several recommendations to improve the effectiveness of employee management in businesses. The findings of this study demonstrate the importance and impact of knowledge sharing on the effectiveness of employee management. These are meaningful contributions in both theory and practice to support businesses gain more insights into knowledge sharing in its impacting relationships on the effectiveness of employee management and play a fundamental role for future research.