Human Resource Development in SMEs: A Systematic Review of the Literature

• Author: Ciara T. Nolan,Thomas N. Garavan
• Date: 01 January 2016
• Published date: 01 January 2016
• DOI: http://doi.org/10.1111/ijmr.12062

International Journal of Management Reviews, Vol. 18, 85–107 (2016)

DOI: 10.1111/ijmr.12062

Human Resource Development in SMEs: A

Systematic Review of the Literature

Ciara T. Nolan and Thomas N. Garavan1

Department of Management and Leadership, University of Ulster, Ulster Business School, Shore Road,

Newtownabbey, Co., Antrim, BT37OQB, Northern Ireland (E-mail: c.nolan@ulster.ac.uk)1Research Professor of

Leadership, School of Management, Edinburgh Napier University, Craiglockhart Campus

Corresponding author email: t.garavan@napier.ac.uk

Human Resource Development (HRD) in small and medium-sized enterprises (SMEs)

is a significant area of scholarship. However, the cumulativeness of research on HRD

in SMEs remains relatively low when compared to HRD generally. This paper reports

a systematic literature review (SLR) to synthesise research in this area. A disciplined

screening process resultedin a final sample of 117 papers published in 31 journals from

1995 to 2014. The synthesis of these empirical and theoretical studies revealed that:

(a) the literature utilises a narrow range of theoretical and conceptual perspectives;

(b) HRD is being investigated across a variety of SME contexts, themes and units of

analysis; (c) researchers define HRD in multipleways and use a diverse set of measures

of HRD activity; (d) there is significant potential forfuture research across the SME and

HRD disciplines, SME settings and beyond existing theoretical perspectives. We offer

suggestions for further advancing the development of this area of research in terms of

theory, content and methodology.

Introduction

Human Resource Development(HRD) is increasingly

one of the most comprehensively researched areas in

the broader sphere of human resource management

(Garavan et al., 2012). Researchers, commentators

and policy makers have stressed the importance of

investment in HRD to enhance the quality of human

capital and create sustainable competitive advantage

(Arag´

on-S´

anchez et al., 2003; Scheel et al., 2014).

HRD as a concept emerged over four decades ago

(Hamlin and Stewart, 2011), however, it remains un-

derstudied in the SME context, in spite of the fact

that it is prominently practiced in these organisations

(Pajo et al., 2010). Dominant theorising in HRD has

evolved from and is oriented towards the study of

atypical (large) enterprises (Iles and Yolles, 2004).

Almost 20 years after Joyce et al.’s (1995) longitu-

dinal quantitative study of 353 SMEs, the cumula-

tiveness of HRD in SMEs research remains modest,

at best. HRD in SMEs has received significant atten-

tion in the popular press (O’Connell, 2014; Pardley,

2012) and leading small business associations have

advocated the positive effects of investment in HRD

on employee capability and organisational perfor-

mance (Federation of Small Businesses, 2011; Man-

agement Development Council, 2010). Research on

HRD in SMEs has to date utilised a limited number of

theoretical perspectives and insufficiently accounted

for the heterogeneity of SMEs. There is also a lack

of research on HRD in different national and cultural

contexts and the literature provides limited coherence

in terms of the content areas investigated. In addition,

few research studies in the SME context have explic-

itly defined the HRD construct.

As a step to advance HRD in SME’s theory and

research, we sought to identify those empirical and

theoretical studies that have investigated HRD in

that context. This is the first systematic review of

HRD in SMEs. The review focuses primarily on the-

oretical developments and empirical studies, how-

ever, we also make a methodological contribution

by analysing the methods used to investigate HRD

in SMEs and bring some coherence to an area that is

poorly operationalised. The field is growing and is ex-

pected to continue as an area of theorising, empirical

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86 C. T. Nolan and T. N. Garavan

investigation and methodological development.

Therefore, our review can help to address important

lacunae in theorising and bring together a field that is

somewhat fragmented and insufficiently defined as a

disciplinary area. We specifically assess and synthe-

sise the theoretical and conceptual foundations found

in the literature, identify the dominant methodologi-

cal approaches, summarise important content issues

and identify outcomes. Weare not aware of a compre-

hensive summary of empirical and theoretical studies

exploring HRD in SME settings (e.g. a systematic lit-

erature review (SLR)) which therefore indicates a key

gap in the literature. Through exploring the empirical

and theoretical studies that have investigatedHRD in

SMEs, we provide evidencethat it is a tenable area of

investigation.

As an area of research, HRD in SMEs faces a num-

ber of challenges. First, researchers have sought a

variety of publication outlets for their work, resulting

in a body of literature that is published in HRD, HRM

and SME journals. This has produced a fragmented,

disjointed body of literature that is of mixed quality.

This pattern of journal quality is not, however,untyp-

ical for an emerging area of study (Kelly et al., 2009).

Our systematic literature review therefore calls atten-

tion to these weaknesses and emphasises the need to

strengthen the area of investigation. One of the ad-

vantages of an SLR is that it adopts a ‘replicable,

scientific and transparent process’ (Tranfield et al.,

2003, p.209) to make evaluations of the current state

of the field and synthesise the divergent studies that

characterise HRD in SMEs research.

Thus, the purpose of this paper is to systematically

examine and organise the current body of empirical

and theoretical literature that has explored HRD in

SMEs. In this SLR, we included both categories of

paper, consistent with previous systematic reviews

(Hakala, 2011). We included theoretical papers that

were highly cited and had a strong impact within the

field. Earlier reviews that have investigated HRD in

an SME context included management development

(Fuller-Love, 2006), the facilitators and barriers to

workplace learning (Doyle et al., 2008), employee in-

volvement in work-relatedlear ning (Kyndtand Baert,

2013) and knowledge resources in SMEs (Macpher-

son and Holt, 2007). These reviews provide insights

into how researchers have operationalised HRD in

the SME context; however, they focused on a narrow

stream or particular dimension of HRD.

The following research questions guided the SLR:

(1) What are the theoretical concepts and traditions

that underpin empirical and theoretical studies of

HRD in SMEs? (2) How is HRD in SMEs studied

from a methodological perspective and in what con-

text is it studied? (3) What content dimensions of

HRD are investigated in the SME context?

We begin this paper by summarising the method

used to select and review the literature and provide

details of our search strategy,analysis and assessment

of the quality of the studies reviewed.We then present

our findings of the SLR of the papers reviewed. Fol-

lowingthis, we discuss future directions for theory de-

velopment, methodology and content areas. We con-

clude by considering the strengths and weaknesses

of our review and highlight the contributions of the

paper to further research on HRD in SMEs.

Methodology used for the systematic

review

Weanalysed 117 studies that were published or avail-

able in press from January 1995 to June 2014 in 31

journals (Table 1). This list is based on journals with

varying degrees of impact but which have a history of

publishing SME and/or HRD research. We followed

the SLR process advocated by Denyer and Tranfield

(2009) and Macpherson and Jones (2010) using five

databases including Business Source Premier, ABI-

INFORM, Swetwise, Emerald and ProQuest. Figure1

provides a summary of the SLR process used to pre-

pare this paper.

Conceptual boundaries

We began the SLR process by defining the research

objectives and conceptual boundaries (Denyer and

Tranfield, 2009). We conceptualised HRD content

along the following dimensions (cf. Hamlin and

Stewart, 2011; Monks et al., 2012; Ridder et al.,

2012): a) conceptualisations or definitions of HRD;

(b) dimensions of HRD (HRD architecture or sys-

tems, HRD interventions, HRD climate) and (c) out-

comes of HRD. We focused on the micro-context of

HRD found in SMEs and sought to broaden concep-

tualisations awayfrom a sole focus on HRD inter ven-

tions. We encountered difficulties in defining ‘HRD’

given the broad conceptualisation found in the liter-

ature (Boselie et al., 2005; Sheehan, 2013; Watson,

2011). We also encountered challenges in defining

the term ‘SME’. We focused on ‘independent enter-

prises with 500 (or 250) employees or fewer’ (Storey,

2004, p.113). However, the SME literature is short on

universal definition of the term ‘SME’ (OECD,2012).

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