Influence Strategic Human Resources Management on Performance of Small and Medium-Sized Enterprises in Kenya
DOI:
https://doi.org/10.70641/ajbds.v1i1.54Keywords:
Strategic Human Resource Management (SHRM), Human Resource Planning, Recruitment and Selection, Employee RetentionAbstract
Small and Medium-Sized Enterprises (SMEs) account for 28.5 percent of the total Kenyan economy and are responsible for generating 30% of the jobs each year, providing employment opportunities for approximately 14.9 million people. This study sought to investigate the impact of strategic human resource management practices (SHRM) on the performance of SMEs in Kenya with specific focus on human resource planning, human resource recruitment and selection practices as well as employee retention strategies.
The study utilized a descriptive research design and targeted a population of 4,614 licensed small and medium enterprises (SMEs) with a resultant representative sample size of 405 SMEs through stratified random sampling technique. Findings showed that human resource planning was important in advancing the performance of their respective SMEs and is a significant predictor of SME performance (β = 2.651, p < .001). Similarly, human resource recruitment and selection accounted for significant variance in SME performance and is predictor of the performance of SMEs (β = 3.332, p < .001). On the other hand, although employee retention accounted for substantial variance in SME performance, it was not a statistically significant predictor of SME performance.
Therefore, human resource planning, recruitment and selection significantly predict SME performance. Consequently, proper human resource planning, effective recruitment and retention policies are vital to attract and retain talented employees, leading to higher performance. Employee development and training programs have been evidenced to enhance employee skills, knowledge, and motivation; ultimately leading to better performance of organizations and SMEs. It is important to consider factors such as the quality of hire, time-to-fill, and cost of hire to achieve optimal outcomes in recruitment.
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