HRM and Innovation in SMEs

Abstract

It is long-recognised that small-to-medium sized enterprises (SMEs) often constitute the numerical majority of firms and are also frequently the employer of the significant part of national workforces in both developed and emerging economies (Blackburn, 2016; Games, 2019). Therefore, the economic and social impact of SMEs is highly important and thus merits attention. Nevertheless, in spite of this significance and the large canons of work on the topics of human resource management (HRM) and innovation, there remains scope to consider the intertwined role that (HRM) may play in relation to innovation activities and situations in SME contexts. It is that set of dynamics that the constitution of a guest editorial Anglo-French academic team addresses in this special issue through the papers assembled which cover a wide range of national contexts including: Jordan, Bosnia-Herzegovina, Vietnam, Pakistan, India, France, and the United Kingdom. In relation to HRM practices support for innovation, the wider research community has endeavoured to clarify this question most notably by emphasising the importance of the complementarity of HRM and innovation practices (Seeck & Diehl, 2017). However, to date, empirical studies have yet to conclusively demonstrate that HRM practices indeed stimulate innovation. Moreover, the fact that organisations might apply different combinations of HRM practices may equally moderate and mediate innovation thus rendering the analysis more complex. Therefore, adoption of an approach that focuses on HRM practices exclusively seems questionable and reductive and it is proposed that it is frequently in conjunction with a set of factors and contextual lenses that HRM practices might be better understood. Furthermore, this evolving research field can shed additional light on the organisational antecedents of innovation, including HRM (Laursen & Foss, 2014). The implications of the nexus between HRM and innovation seems particularly important in the SME context given that human resources in SMEs has been identified as one of the potential obstacles to innovation (Strobel & Kratzer, 2017; Madrid-Guijarro et al., 2009). For example, heavy employee workload (Larsen & Lewis, 2007) and lack of training and or qualifications (Tourigny & Le, 2004) have been found to hinder innovation. In addition, because SMEs typically possess limited resources (De Massis et al., 2018), some executives cannot afford to put in place costly HRM practices such as the introduction of financial incentives. Consequently, executives and consultants have increasingly begun to question the organisation of (HRM) when they wish to foster innovation within their structure. By deploying innovation-oriented practices, SME executives can transform their HRM into an effective lever (Adla et al, 2020; Shahzad et al., 2019; Curado, 2018). Therefore, overall, there is considerable rich and timely scope and potential to reflect on the interfaces and dynamics operating between HRM and innovation in SME contexts.