Perceived Acute Human Resource Management Problems in Small and Medium Firms: An Empirical Examination

Abstract

The main objective of this study was to introduce and empirically test a novel and useful framework from which to study human resource management (HRM) problems in small– and medium–sized enterprises (SMEs). Specifically, the “perceived acute HRM problems framework” introduced in this study was an attempt to advance the literature by moving beyond simply studying when HRM problems may exist in SMEs, to instead studying when SME owners and managers perceive that HRM problems are the firm's most significant concern. Recent literature suggests that SME owners and managers do not conceptualize specific HRM problems on a spectrum. Rather, they are more likely to perceive only “people problems” in the aggregate and then only when severe. Thus, the acute problems framework may be a more appropriate angle from which to study HRM problems in SMEs. We employ binary logistic regression on a sample of 1,693 SMEs to analyze the effect of owner/manager characteristics and firm characteristics on the likelihood of perceiving acute HRM problems. Our results indicate that SME owners and managers who were running higher–performing firms were less likely to perceive acute HRM problems. Conversely, SME owners and managers who were more experienced, who were more educated, and who were running larger SMEs were more likely to perceive acute HRM problems. Finally, gender, owner age, firm age, and firm growth showed no significant relationship with likelihood of SME owners and managers perceiving acute HRM problems.