Human resource professionals’ human and social capital in SMEs: small firm, big impact

Abstract

HR professionals have been widely ignored in the Human Resource (HR) management literature pertaining to small and medium-sized enterprises (SME). Given that entrepreneurs may be reluctant to hire HR professionals, it is important to investigate the value that HR people may bring to an SME. Addressing this literature gap, our research draws on resource orchestration theory (ROT) to link the interaction between HR professionals’ human and social capital to firm performance via the use of high-performance work practices (HPWPs). Further, this relationship depends on the SME’s size: in small firms, the link is strengthened because HR professionals’ human and social capital is more likely to create a competitive advantage in a context of resource poverty. We test the research model among a sample of 174 Canadian SMEs with fewer than 250 employees. Our results show that HR professionals’ human and social capital is more closely related to firm performance through the adoption of HPWPs in small SMEs than in large ones. Overall, our study highlights the value that HR professionals bring to small SMEs and advocates for a greater presence of HR professionals in SMEs.

Keywords:

• Human Resource professionals
• high-performance work practices
• firm performance
• small and medium-sized enterprises (SME)
• resource orchestration theory

Disclosure statement

No potential conflict of interest was reported by the author(s).

Funding

The research was funded by the Social Sciences and Humanities Research Council of Canada. The funding number is 892-2017-3031.

Data availability statement

Data are available upon reasonable request by contacting the first author, Sylvie Guerrero.

Notes

1 https://ec.europa.eu/eurostat/web/structural-business-statistics/structural-business-statistics/sme Retrieved on October 18, 2020