Staffing practices in Australian ICT micro-firms: Growing virtual?

Human resource management in small enterprises has traditionally been under-researched and remains poorly understood (Heneman & Berkley, 1999). With respect to HR issues, recruitment, selection and retention of staff have been identified as among smaller firms’ greatest challenges (Heneman, Tansky & Camp 2000; Hornsby & Kuratko 1990). Key points have been identified as: difficulties in accessing suitably skilled workers (Sambrook, 2005), entrepreneurs lacking management capability (Mazzarol, 2003), and resource constraints (Marchington, Carrol & Boxall, 2003). Existing literature pertaining to attracting, motivating and retaining staff in micro-firms principally depicts practice as: (1) informal, due to the close relationship between the employer and employees; (2) driven by the personality of the owner-manager, which permeates virtually every micro-firm decision; and (3) occurring under intense resource constraints, inherent in micro-firms’ small size. However, to date research in this area has been largely conducted from a functional HR perspective rather than a managerial/entrepreneurial viewpoint. Therefore the practices and thinking of micro-firm managers relating to these staffing issues are poorly documented, in particular in terms of the alternatives and trade-offs managers have to consider. The primary purpose of this study is to explore from a managerial/entrepreneurial perspective the issues and challenges facing micro-firms in relation to staffing. Taking a broader perspective allows to examine these issues using both an HR lens (eg: recruitment, selection, retention) and an organisational theory lens (eg: organisational structure and boundaries, insourcing versus outsourcing). This broader perspective provides for a richer investigation of the issues in that it enables us to examine practices not captured by the functional HR lens, as well as giving a fine-grained contextualisation to the investigation, leading to a better understanding of this important dimension of micro-firm management.