Hiring and retaining skilled employees in SMEs: problems in human resource practices and links with organizational success
Abstract
The ability to attract and retain the talents is an important factor in the competitiveness of countries, as it is confirmed in our study. At the level of small and medium-sized enterprises, hiring and retaining skilled workers is one of the most difficult tasks of HR management, especially in transition economies with a high intensity of “leaching out” the skilled workers due to labour migration. Our research in Ukraine, which is a prime example of such countries, conducted via the cluster analysis allows us to conclude that the problems of hiring and retaining skilled workers have some connection with profitability: there is almost always a problem with filling vacancies with people of all educational levels in unprofitable enterprises, which is not typical of profitable businesses. The main problems with filling vacancies according to employers’ estimations are: 1) market factors – shortage of employees with the required skills; 2) internal problems of ensuring the attractiveness of jobs (material – pay, and intangible – career prospects, flexible working hours, legal employment); 3) internal factors of inefficient HR management, including recruiting; 4) psycho-physiological factors of job satisfaction. However, there are no close links between the factors of hiring effectiveness and retention of skilled workers with the economic success of the organization in the form of the growth of assets, revenues and stuff. This leads to the conclusion that the practices of human resources management in small and medium-sized businesses in Ukraine are largely built chaotic, without analyzing the impact on the efficiency of the use of other resources and without providing links with the overall economic efficiency of enterprises.
Keyword : human resource, organizational economic success, SMEs, hiring, retention, vacancies
How to Cite
Bilan, Y., Mishchuk, H., Roshchyk, I., & Joshi, O. (2020). Hiring and retaining skilled employees in SMEs: problems in human resource practices and links with organizational success. Business: Theory and Practice, 21(2), 780-791. https://doi.org/10.3846/btp.2020.12750
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Green, K. (2019). Competitive people strategy: how to attract, develop and retain the staff you need for business success. Kogan Page Publishers.
Grishnova, O., Cherkasov, A., & Brintseva, O. (2019) Transition to a new economy: transformation trends in the field of income and salary functions. Problems and Perspectives in Management, 17(2), 18–31. https://doi.org/10.21511/ppm.17(2).2019.02
Heywood, J. S., & Jirjahn, U. (2016). The hiring and employment of older workers in Germany: A comparative perspective. Journal for Labour Market Research, 49(4), 349–366. https://doi.org/10.1007/s12651-015-0195-4
Hipp, L. (2020). Do hiring practices penalize women and benefit men for having children? Experimental evidence from Germany. European Sociological Review, 36(2), 250–264. https://doi.org/10.1093/esr/jcz056
Horvathova, J., & Mokrisova, M. (2020). Business competitiveness, its financial and economic parameters. Montenegrin Journal of Economics, 16(1), 139–153. https://doi.org/10.14254/1800-5845/2020.16-1.9
Hussin, F., Ali, J., & Noor, M. S. Z. (2014). Kaedah penyelidikan & analisis data SPSS. Universiti Utara Malaysia Press.
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Khan, E. A., & Quaddus, M. (2018). Dimensions of human capital and firm performance: Micro-firm context. IIMB Management Review, 30(3), 229–241. https://doi.org/10.1016/j.iimb.2018.05.004
Kramoliš, J., Šviráková, E., & Král, D. (2020). Design management as crucial creative essence for business success in small and medium-sized enterprises. Creativity Studies, 13(1), 87–98. https://doi.org/10.3846/cs.2020.9904
Ključnikov, A., Civelek, M., Čech, P., & Kloudová, J. (2019). Entrepreneurial orientation of SMEs’ executives in the comparative perspective for Czechia and Turkey. Oeconomia Copernicana, 10(4), 773–795. https://doi.org/10.24136/oc.2019.035
Lee, B. (2019). Human capital and labor: the effect of entrepreneur characteristics on venture success. International Journal of Entrepreneurial Behavior & Research. https://doi.org/10.1108/IJEBR-10-2017-0384
Makhbul, Z. M., & Hasun, F. M. (2011). Entrepreneurial success: An exploratory study among entrepreneurs. International Journal of Business and Management, 6(1), 116. https://doi.org/10.5539/ijbm.v6n1p116
Maamari, B. E., & Alameh, K. (2016). Talent management moderating the relationship between recruitment for the highly skilled and HR policies. Contemporary Management Research, 12(1), 121–138. https://doi.org/10.7903/cmr.14133
Mishchuk, H., Bilan, S., Yurchyk, H., Akimova, L., & Navickas, M. (2020). Impact of the shadow economy on social safety: The experience of Ukraine. Economics and Sociology, 13(2), 284–298. https://doi.org/10.14254/2071-789X.2020/13-2/19
Mishchuk, H., Bilan, Y., & Pavlushenko, L. (2016). Knowledge management systems: issues in enterprise human capital management implementation in transition economy. Polish Journal of Management Studies, 14(1), 163–173. https://doi.org/10.17512/pjms.2016.14.1.15
Mishchuk, H., Samoliuk, N., & Bilan, Y. (2019). Measuring social justice in the light of effectiveness of public distributive policy. Administration & Public Management Review, 32, 63–76. https://doi.org/10.24818/amp/2019.32-05
Moayedfar, R., & Madani Chafi, M. (2019). A theoretical expansion of talent allocation model: evidence from selected developing countries from 2014–2018. Entrepreneurial Business and Economics Review, 7(4), 57–72. https://doi.org/10.15678/EBER.2019.070404
Narkunienė, J., & Ulbinaitė, A. (2018). Comparative analysis of company performance evaluation methods, Entrepreneurship and Sustainability Issues, 6(1), 125–138. https://doi.org/10.9770/jesi.2018.6.1(10)
Oliinyk, O. O. (2017). Corporate social responsibility in the field of occupational safety and health. Scientific Bulletin of National Mining University, 2, 128–133.
Perren, L. (2000). Factors in the growth of micro-entreprise: Exploring the implications. Journal of Small Business and Enterprise Development, 7(1), 58–68. https://doi.org/10.1108/EUM0000000006805
Richardson, K. (2016). Attracting and retaining foreign highly skilled staff in times of global crisis: a case study of Vancouver, British Columbia’s biotechnology sector. Population, Space and Place, 22(5), 428–440. https://doi.org/10.1002/psp.1912
Ruíz, M. D. A., Gutiérrez, J. O., Martínez-Caro, E., & Cegarra-Navarro, J. G. (2017). Linking an unlearning context with firm performance through human capital. European Research on Management and Business Economics, 23(1), 16–22. https://doi.org/10.1016/j.iedeen.2016.07.001
Sohel-Uz-Zaman, A. S. M., Anjalin, U., & Khan, R. I. (2019). Human capital management: understanding its implications over the business. International Journal of Economics, Finance and Management Sciences, 7(5), 170. https://doi.org/10.11648/j.ijefm.20190705.13
Unger, J. M., Rauch, A., Frese, M., & Rosenbusch, N. (2011). Human capital and entrepreneurial success: A meta-analytical review. Journal of Business Venturing, 26(3), 341–358. https://doi.org/10.1016/j.jbusvent.2009.09.004
Urban, B., & Joubert, G. C. D. S. (2017). Multidimensional and comparative study on intellectual capital and organisational performance. Journal of Business Economics and Management, 18(1), 84–99. https://doi.org/10.3846/16111699.2016.1255990
Urbancová, H., & Hudáková, M. (2017). Benefits of employer brand and the supporting trends. Economics & Sociology, 10(4), 41–50. https://doi.org/10.14254/2071-789X.2017/10-4/4
Watson, K., Hogarth‐Scott, S., & Wilson, N. (1998). Small business start‐ups: success factors and support implications. International Journal of Entrepreneurial Behavior & Research, 4(3), 217–238. https://doi.org/10.1108/13552559810235510
Westeren, K. I. (2018). Human capital management for the improvement of competitiveness in firms. In Operations and Service management: concepts, methodologies, tools, and applications (pp. 1708–1725). IGI Global. https://doi.org/10.4018/978-1-5225-3909-4.ch078
Yadav, M. P., Venkata, V. P. R. P., & Pradhan, R. S. (2018). Impact of financial, social and human capital on entrepreneurial success. International Journal of Small Business and Entrepreneurship, 6(4), 1–28.
Yousuf, A., Haddad, H., Pakurar, M., Kozlovskyi, S., Mohylova, A., Shlapak, O., & János, F. (2019). The effect of operational flexibility on performance: a field study on small and medium-sized industrial companies in Jordan. Montenegrin Journal of Economics, 15(1), 47–60. https://doi.org/10.14254/1800-5845/2019.15-1.4
Zhu, Y., Yang, H., & Bai, G. (2019). Relationship between staff competency and performance of service-oriented manufacturing enterprises in China. Transformations in Business & Economics, 18(1), 234–248.
Akimov, O., Karpa, M., Parkhomenko-Kutsevil, O., Kupriichuk, V., & Omarov, A. (2020). Entrepreneurship education of the formation of the e-commerce managers professional qualities. Journal of Entrepreneurship Education, 23(S1).
Andersén, J. (2019). Resource orchestration of firm-specific human capital and firm performance – the role of collaborative human resource management and entrepreneurial orientation. The International Journal of Human Resource Management, 1–33. https://doi.org/10.1080/09585192.2019.1579250
Babiarz, P., Kamuda, D., & Migała-Warchoł, A. (2020). Testing the Polish society security. Journal of International Studies, 13(1), 81–92. https://doi.org/10.14254/2071-8330.2020/13-1/5
Baranowska-Prokop, E., & Sikora, T. (2017). Innovativeness and success perception of Polish small-and medium-sized international new ventures. Journal of International Studies, 10(3), 134–146. https://doi.org/10.14254/2071-8330.2017/10-3/10
Bilan, S., Mishchuk, H., Samoliuk, N. & Ostasz, G. (2020a). Effectiveness of social dialogue in the system of sustainable economic development factors. Paper presented at the Proceedings of the 34th International Business Information Management Association Conference, IBIMA 2020: Vision 2025: Education Excellence and Management of Innovations through Sustainable Economic Competitive Advantage (pp. 13303–13313). Madrid, Spain.
Bilan, Y., Mishchuk, H., Roshchyk, I., & Kmecova, I. (2020b). Analysis of intellectual potential and its impact on the social and economic development of European countries. Journal of Competitiveness, 1, 22–38. https://doi.org/10.7441/joc.2020.01.02
Bondarenko, S., Liganenko, I., Kalaman, O., & Niekrasova, L. (2018). Comparison of methods for determining the competitiveness of enterprises to determine market strategy. International Journal of Civil Engineering and Technology, 9(13), 890–898.
Carpentier, M., Van Hoye, G., & Weijters, B. (2019). Attracting applicants through the organization’s social media page: Signaling employer brand personality. Journal of Vocational Behavior, 115, 103326. https://doi.org/10.1016/j.jvb.2019.103326
Chitsaz, E., Tajpour, M., Hosseini, E., Khorram, H., & Zorrieh, S. (2019). The effect of human and social capital on entrepreneurial activities: a case study of Iran and implications. Entrepreneurship and Sustainability Issues, 6(3), 1393–1403. https://doi.org/10.9770/jesi.2019.6.3(24)
Clinton, E. (2016). Human resources in the family business–maximising the power of your people. The Irish Journal of Management, 35(2), 176–178. https://doi.org/10.1515/ijm-2016-0014
Cochran, W. G. (1977). Sampling techniques (3rd ed.). John Wiley & Sons.
Dafna, K. (2008). Managerial performance and business success: Gender differences in Canadian and Israeli entrepreneurs. Journal of Entreprising Communities: People and Places in the Global Economy, 2(4), 300–331. https://doi.org/10.1108/17506200810913890
Díaz-Chao, Á., Sainz-González, J., & Torrent-Sellens, J. (2016). The competitiveness of small network-firm: A practical tool. Journal of Business Research, 69(5), 1769–1774. https://doi.org/10.1016/j.jbusres.2015.10.053
Eurostat. (2020а). Annual enterprise statistics for special aggregates of activities (NACE Rev. 2): Turnover or gross premiums written. Gross operating surplus. Employees. Apparent labour productivity (Gross value added per person employed). https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset =sbs_na_sca_r2&lang=en
Eurostat. (2020b). Gross fixed capital formation by AN_F6 asset type: current prices, million euro. http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_10_an6&lang=en
Gallardo-Vázquez, D., & Lizcano-Álvarez, J. L. (2020). CSR-related competitiveness and legitimacy in MSMEs. Economics & Sociology, 13(1), 52–73. https://doi.org/10.14254/2071-789X.2020/13-1/4
Green, K. (2019). Competitive people strategy: how to attract, develop and retain the staff you need for business success. Kogan Page Publishers.
Grishnova, O., Cherkasov, A., & Brintseva, O. (2019) Transition to a new economy: transformation trends in the field of income and salary functions. Problems and Perspectives in Management, 17(2), 18–31. https://doi.org/10.21511/ppm.17(2).2019.02
Heywood, J. S., & Jirjahn, U. (2016). The hiring and employment of older workers in Germany: A comparative perspective. Journal for Labour Market Research, 49(4), 349–366. https://doi.org/10.1007/s12651-015-0195-4
Hipp, L. (2020). Do hiring practices penalize women and benefit men for having children? Experimental evidence from Germany. European Sociological Review, 36(2), 250–264. https://doi.org/10.1093/esr/jcz056
Horvathova, J., & Mokrisova, M. (2020). Business competitiveness, its financial and economic parameters. Montenegrin Journal of Economics, 16(1), 139–153. https://doi.org/10.14254/1800-5845/2020.16-1.9
Hussin, F., Ali, J., & Noor, M. S. Z. (2014). Kaedah penyelidikan & analisis data SPSS. Universiti Utara Malaysia Press.
INSEAD. (2018). The Global Talent Competitiveness Index 2018. Fontainebleau, France. https://www.insead.edu/sites/default/files/assets/dept/globalindices/docs/GTCI-2018-report.pdf
INSEAD. (2019). The Global Talent Competitiveness Index 2019. Fontainebleau, France. https://www.insead.edu/sites/default/files/assets/dept/globalindices/docs/GTCI-2019-Report.pdf
Khan, E. A., & Quaddus, M. (2018). Dimensions of human capital and firm performance: Micro-firm context. IIMB Management Review, 30(3), 229–241. https://doi.org/10.1016/j.iimb.2018.05.004
Kramoliš, J., Šviráková, E., & Král, D. (2020). Design management as crucial creative essence for business success in small and medium-sized enterprises. Creativity Studies, 13(1), 87–98. https://doi.org/10.3846/cs.2020.9904
Ključnikov, A., Civelek, M., Čech, P., & Kloudová, J. (2019). Entrepreneurial orientation of SMEs’ executives in the comparative perspective for Czechia and Turkey. Oeconomia Copernicana, 10(4), 773–795. https://doi.org/10.24136/oc.2019.035
Lee, B. (2019). Human capital and labor: the effect of entrepreneur characteristics on venture success. International Journal of Entrepreneurial Behavior & Research. https://doi.org/10.1108/IJEBR-10-2017-0384
Makhbul, Z. M., & Hasun, F. M. (2011). Entrepreneurial success: An exploratory study among entrepreneurs. International Journal of Business and Management, 6(1), 116. https://doi.org/10.5539/ijbm.v6n1p116
Maamari, B. E., & Alameh, K. (2016). Talent management moderating the relationship between recruitment for the highly skilled and HR policies. Contemporary Management Research, 12(1), 121–138. https://doi.org/10.7903/cmr.14133
Mishchuk, H., Bilan, S., Yurchyk, H., Akimova, L., & Navickas, M. (2020). Impact of the shadow economy on social safety: The experience of Ukraine. Economics and Sociology, 13(2), 284–298. https://doi.org/10.14254/2071-789X.2020/13-2/19
Mishchuk, H., Bilan, Y., & Pavlushenko, L. (2016). Knowledge management systems: issues in enterprise human capital management implementation in transition economy. Polish Journal of Management Studies, 14(1), 163–173. https://doi.org/10.17512/pjms.2016.14.1.15
Mishchuk, H., Samoliuk, N., & Bilan, Y. (2019). Measuring social justice in the light of effectiveness of public distributive policy. Administration & Public Management Review, 32, 63–76. https://doi.org/10.24818/amp/2019.32-05
Moayedfar, R., & Madani Chafi, M. (2019). A theoretical expansion of talent allocation model: evidence from selected developing countries from 2014–2018. Entrepreneurial Business and Economics Review, 7(4), 57–72. https://doi.org/10.15678/EBER.2019.070404
Narkunienė, J., & Ulbinaitė, A. (2018). Comparative analysis of company performance evaluation methods, Entrepreneurship and Sustainability Issues, 6(1), 125–138. https://doi.org/10.9770/jesi.2018.6.1(10)
Oliinyk, O. O. (2017). Corporate social responsibility in the field of occupational safety and health. Scientific Bulletin of National Mining University, 2, 128–133.
Perren, L. (2000). Factors in the growth of micro-entreprise: Exploring the implications. Journal of Small Business and Enterprise Development, 7(1), 58–68. https://doi.org/10.1108/EUM0000000006805
Richardson, K. (2016). Attracting and retaining foreign highly skilled staff in times of global crisis: a case study of Vancouver, British Columbia’s biotechnology sector. Population, Space and Place, 22(5), 428–440. https://doi.org/10.1002/psp.1912
Ruíz, M. D. A., Gutiérrez, J. O., Martínez-Caro, E., & Cegarra-Navarro, J. G. (2017). Linking an unlearning context with firm performance through human capital. European Research on Management and Business Economics, 23(1), 16–22. https://doi.org/10.1016/j.iedeen.2016.07.001
Sohel-Uz-Zaman, A. S. M., Anjalin, U., & Khan, R. I. (2019). Human capital management: understanding its implications over the business. International Journal of Economics, Finance and Management Sciences, 7(5), 170. https://doi.org/10.11648/j.ijefm.20190705.13
Unger, J. M., Rauch, A., Frese, M., & Rosenbusch, N. (2011). Human capital and entrepreneurial success: A meta-analytical review. Journal of Business Venturing, 26(3), 341–358. https://doi.org/10.1016/j.jbusvent.2009.09.004
Urban, B., & Joubert, G. C. D. S. (2017). Multidimensional and comparative study on intellectual capital and organisational performance. Journal of Business Economics and Management, 18(1), 84–99. https://doi.org/10.3846/16111699.2016.1255990
Urbancová, H., & Hudáková, M. (2017). Benefits of employer brand and the supporting trends. Economics & Sociology, 10(4), 41–50. https://doi.org/10.14254/2071-789X.2017/10-4/4
Watson, K., Hogarth‐Scott, S., & Wilson, N. (1998). Small business start‐ups: success factors and support implications. International Journal of Entrepreneurial Behavior & Research, 4(3), 217–238. https://doi.org/10.1108/13552559810235510
Westeren, K. I. (2018). Human capital management for the improvement of competitiveness in firms. In Operations and Service management: concepts, methodologies, tools, and applications (pp. 1708–1725). IGI Global. https://doi.org/10.4018/978-1-5225-3909-4.ch078
Yadav, M. P., Venkata, V. P. R. P., & Pradhan, R. S. (2018). Impact of financial, social and human capital on entrepreneurial success. International Journal of Small Business and Entrepreneurship, 6(4), 1–28.
Yousuf, A., Haddad, H., Pakurar, M., Kozlovskyi, S., Mohylova, A., Shlapak, O., & János, F. (2019). The effect of operational flexibility on performance: a field study on small and medium-sized industrial companies in Jordan. Montenegrin Journal of Economics, 15(1), 47–60. https://doi.org/10.14254/1800-5845/2019.15-1.4
Zhu, Y., Yang, H., & Bai, G. (2019). Relationship between staff competency and performance of service-oriented manufacturing enterprises in China. Transformations in Business & Economics, 18(1), 234–248.