The Effect of HRM Practices on Employment Outcomes in Indigenous Social Enterprises

Abstract

Indigenous economic development is a critical area of focus for many communities globally. Indigenous social enterprises play an important role in enhancing economic development by providing employment opportunities for Indigenous community members. Thus, understanding the factors that impact employment of Indigenous staff by Indigenous enterprises has important social and economic implications. This study examines the relationship between high commitment human resource management (HC-HRM) practices of Australian Indigenous social enterprises and their employment of Indigenous staff. Specifically, the paper contends with the research question how does the utilisation of HC-HRM by Indigenous enterprises shape the Indigenous employment outcomes of enterprises? Working with research partner Supply Nation, Australia’s Indigenous Minority Supplier Diversity Council, a survey of Indigenous social enterprises was conducted about their HRM practices in relationship to leader risk propensity and business strategy pertaining to cultural product/services. A key result of the study is that the use of HC-HRM practices helps increase Indigenous employment outcomes. In addition, the relationship between HC-HRM and Indigenous employment outcomes is moderated by both the enterprise’s business strategy and the leaders’ risk propensity. These findings provide important insight into how Indigenous social enterprises can be best managed to create social and economic benefits in Indigenous communities.