Are Human Resource Management Practices Important in Small Firms‪?‬

INTRODUCTION Small business start-ups and growth have been credited with almost half of all jobs created in the United States during the 1980s. Small businesses therefore played a major role in prolonging the economic growth that occurred during that period and demonstrated their importance to the future. Although small firms have been growing in size and number, they also have been failing. The failure rate has been said to exceed fifty percent during the first five years (Gaedeke and Tootelian, 1985; Hofer and Sandberg, 1987). Research has uncovered many factors contributing to the failure of small firms, but a lack of management skills appears to be at the top of the list (Peterson, Kozmetsky and Ridgway, 1983). One necessary skill may be that of finding and keeping good employees. According to Hay and Ross (1989), the owners that get help from many sources also tend to achieve the most success.