How Can HR Drive Growth?

How Can HR Drive Growth?

New Horizons in Management series

Edited by George Saridakis and Cary L. Cooper

The ten up-to date research reviews that are presented in this book provide new insights into the HR academic literature. The chapters provide clear lessons that can be learnt from, along with strategies, approaches and processes in which HR could be used by both practitioners and policy makers to drive growth.

Chapter 3: HR practice and small firm growth: balancing informality and formality

John Kitching and Susan Marlow

Subjects: business and management, human resource management, organisational behaviour, strategic management


Small and medium-sized enterprises (SMEs) are major employers in the UK. In 2012, there were 1.24 million private sector employers (Department for Business, Innovation and Skills/BIS, 2012); more than 99 per cent of these being SMEs employing fewer than 250 employees. Collectively, SMEs employ 10.2 million people, approximately a third of the UK workforce. Small firm HR practices inevitably shape organizational performance and the experience of work for a large number of people through their influence on recruitment, pay, work organization, skill development, employee motivation and retention, appraisal, communication, discipline and dismissal. A number of studies over the past 25 years have demonstrated that HR practices within small firms differ from larger employers, as well as exhibiting substantial diversity (see for example Goss, 1991; Moule, 1998; Ram and Edwards, 2003; Marlow et al.,2005). Supporting small business growth has been a prominent concern for UK policy-makers for three decades. The current coalition Government has declared that the UK should be one of the best places in Europe to start, finance and grow a business (HM Treasury/BIS, 2011). Policymakers have designated small businesses as the principal engines of economic recovery and growth following the financial crisis and economic recession of 2008–09. Given this emphasis on small firms as employment creators, their socio-economic importance has certainly increased in recent years (Wright and Marlow, 2012). Whether small business owners themselves are willing and able to play the role prescribed by government is highly debateable.

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