Strategic Staffing and Small‐Firm Performance

Abstract

Although staffing can be a critical determinant of whether small businesses succeed or fail, there has been less research in this area than might be expected, given the large numbers of such firms. While there has been some research on specific recruiting and selection practices, there has been little attention to the strategic aspects of staffing. We investigated relationships between strategic approaches to staffing and small‐firm performance using lagged survey data from 139 founders and owners of small firms. Results indicate that recruiting approaches imitating the practices (processes) of larger businesses are positively related to a perceptual measure of firm performance. Selection approaches stressing a growth orientation are also positively related to firm performance. Finally, founders’ and owners’ perceptions of the strategic importance of human resources moderate the relationship of firm performance with imitative recruiting practices as well as with growth‐oriented selection practices. An important contribution of this article is that contextual knowledge facilitates our understanding of the performance implications of staffing practices in small firms. © 2015 Wiley Periodicals, Inc.