Why do small businesses seek support for managing people? Implications for theory and policy from an analysis of UK small business survey data

This article explores the characteristics of small and medium-sized enterprises (SMEs) that seek external human resource (HR) support and the circumstances in which they do so, drawing on the resource-based view (RBV) of the firm and recent growth theories. Original analysis of UK Longitudinal Small Business Survey data indicates that few SMEs seek HR support and that they are more likely to seek information than strategic advice. Resource deficiencies were not found to be a driver for seeking HR support, rather this was associated with business changes or challenges. Theoretically, we develop a model that identifies dynamic capabilities for HR support, integrated within an RBV framework. This is novel in integrating the concepts of ‘human process advantage’ and ‘human capital advantage’ from the strategic HR literature with dynamic capabilities theory. We draw out the implications of the findings and the model for future research and policy development