Towards a more flexible SMEs: can HR flexibility spur the nexus between capacity-enhancing HR practices and job performance?

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PurposeThe study investigates the mediating effect of HR flexibility in the relationship between capacity-enhancing HR practices and job performance in small and medium-sized enterprises (SMEs) operating in Egypt.Design/methodology/approachOn the basis of the literature review, the results imply a quantitatively tested conceptual model. The model is empirically validated using the partial least squares method to structural equation modelling (PLS-SEM) with survey data from 270 SME owners and managers in Egypt. The sample was selected using a quota sampling approach for small and medium-sized businesses and a proportionate stratification sampling method for the industry and region.FindingsFindings for the sample revealed that capacity-enhancing HR practices affected job performance positively and significantly. The findings also revealed a direct, positive and significant impact of capacity-enhancing HR practices on HR flexibility and HR flexibility on job performance. Functional flexibility was identified as a significant mediator of the capacity-enhancing HR practices-job performance link, whereas behavioural and skill flexibility were not significant mediators for such a relationship.Research limitations/implicationsThe study's cross-sectional design is an evident weakness. All variables were self-reported; this may raise issues regarding method bias. Other limitations include the generalisability of the study's findings outside the setting in which it was conducted. The accuracy of the field study results would have been enhanced if they had not been limited exclusively to the geographical confines of Egypt.Originality/valueThe paper proposes many implications emphasising the role of HR flexibility in enhancing the performance of SMEs. The study developed a mediation model to understand how SMEs boost the performance of human resources by focusing on flexibility dimensions. Accordingly, companies may strategically employ flexible practices and provide an environment that encourages skill and behavioural development.