Advancing understanding of HRM in small and medium-sized enterprises (SMEs): critical questions and future prospects

Abstract

A notable paradox of HRM research is that while small and medium-sized enterprises (SMEs) form the dominant private sector employer across the globe, they remain dramatically underrepresented in scholarship. This is significant as there are a number of SME specific characteristics that shape HRM in this context, raising questions around the relevance and applicability of dominant understanding of HRM. In this paper we outline six such SME characteristics captured by the acronym RECIPE and outline their implications for HRM. We then introduce seven special issue papers which serve to advance understanding of HRM in SMEs. Drawing together key insights, we conclude by proposing a number of routes for future research and deeper contextualisation of HRM in SMEs. These include broadening the theoretical palette, challenging conventional assumptions, moving beyond an exclusive HPWS focus, incorporating employee perspectives coupled with the need to cast a wider methodological net.

Improving creativity among SME employees: exploring the role of organization-based self-esteem and psychological capital

“…Despite the significant socio-economic imprint of SMEs, which are labour intensive and operating in a resource limited environment, it is noted that research studies in the SME context are very scarce (Harney et al ., 2022). This research contributes significantly by empirically testing a creativity model in the SME context.…”

Paternalism as a positive way of HRM in MSMEs during the COVID-19 pandemic

“…MSMEs play a critical role in the economy, but they commonly survive for a shorter period than large businesses (Wee and Chua, 2013): "smaller firms have a limited understanding about which new knowledge is most relevant to their context" (Corredoira and McDermott, 2020, p. 920), and they remain comparatively under-researched (Gherhes et al, 2016). "RECIPE" was an acronym for grappling with key SME characteristics, namely resource constraints, environmental vulnerability, concentrated control, informality, proximity of relations and employee experience (Harney et al, 2022) experiencing many impediments, including a lack of skills, technology and capital, which creates poor competitiveness (Maksum et al, 2020). HRM is one of the strategies that can be employed to help MSMEs benefit from the competitive advantage leading to increased turnover and customer satisfaction (U-on et al, 2021), the survival and growth (Amarakoon and Colley, 2022), firm performance (Arthur et al, 2016;Kitchot et al, 2020;Sardi et al, 2021;Syed and Jamal, 2012;Viitala et al, 2022) and SME business sustainability (Asriati et al, 2022;Darcy et al, 2014;Tsvetkova et al, 2020).…”

“…HRM interventions can demonstrate compassion, warmth and friendliness toward employees and their fears regarding the threats associated with COVID-19 (He et al, 2021). Employees' voices are also an important factor to consider when resolving organizational issues (Soomro et al, 2021), and it should be incorporated employee perspectives into a deeper contextualization of HRM in MSMEs (Harney et al, 2022).…”

“…Recognizing the gap in the literature and addressing the problem in MSMEs, this paper aims to shed light on HRM in MSMEs through the paternalism lens in Thailand. A variety of reasons HRM scholars should be motivated to study MSMEs, such as the largest private, the resource-constrained and labor-intensive (Harney et al, 2022), and particularly sensitive to the complexity in the internal and external environments (Okre ˛glicka et al, 2015). Choosing Thai MSMEs for this paper has important implications at theoretical and managerial levels.…”

Breaking away or holding on to the past? Exploring HRM systems of export-oriented SMEs in a highly uncertain context: insights from a transition economy in the periphery

“…As SMEs face a range of challenges, for example limited resources, weak institutional support and, more generally, a high level of context sensitivity, HRM in general and people management in particular are considered crucial for their survival and success (Bacon and Hoque;Barrett and Mayson, 2007;Cunningham, 2010;Huang and Gamble, 2011). It is therefore surprising that research on HRM in SMEs has been neglected for some time and only in the last decade has this field received more systematic attention (Harney et al, 2019;Psychogios and Prouska, 2019).…”