Human resource management in growing small firms

Purpose - The purpose of this paper is to begin the process of exploring the intersection between entrepreneurship and HRM by developing an understanding of the nature of HRM in growth-oriented small firms.

Design/methodology/approach - A survey of 600 small Australian businesses, conducted by CPA Australia in March 2002 to explore employment issues, is analysed by the authors. Findings - The analysis shows that growth-oriented small firms are more likely than non-growing ones to use formal HRM practices where that means that they are written down, regularly applied or assured to take place.

Research limitations/implications - The data are a single snapshot of small firms in time (March 2002) and therefore, while non-growing small firms can be identified amongst the sample, it is not correct to assume either that they have not grown in the past to reach their current size (with the exception of the single person firms) or that they will not grow in the future. Moreover it is not known whether the growth, which the growing small firms indicate they undertook, was or is sustained.

Practical implications - The result suggests that small firms seeking growth should reconsider their HRM practices in light of their business plans to ensure that there is a good "fit".

Originality/value- The authors examine small firms in Australia, which are much smaller than their international counterparts, to see whether conclusions from overseas studies are relevant.