Abstract
BACKGROUND:
Despite the fact that there is a rising number of publications on TM, research on implementing such practices in SMEs and on the impact of contextual factors on TM is scarce. This article focuses on the impact of contextual factors on talent management (TM) practices in small and medium enterprises (SMEs).
OBJECTIVE:
The main aim of the research was to evaluate the impact of contextual factors on TM practices in SMEs. This paper presents the results of the analyses verifying whether there is a dependence between contextual factors (be they internal or external) and scope of TM practices introduced in SMEs.
METHODS:
The data was gathered from 200 randomly selected SMEs. The respondents were questioned about the characteristics of TM practices they run and asked about factors impacting upon their approach to TM.
RESULTS:
The results prove that there are some statistically significant dependences between the context and TM, but due to the heterogeneity of such enterprises, the complexity of contextual factors and the manager/owner attitude to HRM, no coherent patterns could be found.
CONCLUSIONS:
It can be concluded that the short-term perspective and reactive actions dominate in the group of investigated companies. However, almost all respondents claimed to pay high attention to employees’ expectations towards such practices, which can be portrayed as a way of building sustainability on the basis of human capital.
Introduction
Talent management issues have become an important field of research. It can be proven by the number of articles on this subject published in scientific journals and by the complexity of actions introduced in companies [1–7].
The rising importance of talent management stems from the significance of human capital in providing competitive advantage and from the focus on sustainability in running a business. Despite the fact that the positive impact of TM practices on firms’ performance has been proven, and that a number of effective TM actions have been developed, it is discussed whether these practices are applicable to every company and can bring about the same benefits (economic, social and environmental). In particular, it is questioned whether practices introduced in large companies can be incorporated by SMEs and if the implementation of such practices is context dependent [8–10]. The Limited applicability of TM approaches developed in large companies into specific context of SMEs creates a research gap. The need to fill this gap comes mainly from the fact that small and medium enterprises play an important role in many countries and in the global economy [8, 12]. Moreover, it is worth noticing that there are some more reasons for exploring talent management in SMEs, inter alia: such companies benefit strongly from talented employees, TM practices are determined by many factors like the company’s growth stage, the owners’ or managers’ professional knowledge and competencies, as well as contextual factors [13–15, 19].
This research is aimed at verifying the potential dependence between the context of running a business and TM practices in SMEs. Thus, this study is underpinned in literature on talent management (and talent management in SMEs in particular), context (and the contextual issues in HRM in particular) and sustainability.
These themes are discussed in the following sections prior to presenting the research design and results. The article is structured as follows. Firstly we briefly discuss the theoretical background of the study referring to talent management, TM in SMEs and context related issues. It is followed by the presentation of the research goals, hypotheses and design. In the next part we present research results which is followed by discussion and findings summary.
Literature review
Talent management and TM in SMEs
As already mentioned talent management has been the topic of research for more than three decades. Despite the fact that there remains no consensus whether talent is innate or can be developed, and whether TM should be exclusive or inclusive, researchers agreed that talented employees bring high value and support the achieving of a competitive advantage. Thus, TM should encompass all activities aimed at providing organisations with a pool of high potential and high-performing employees and retaining them [15]. Such activities include talent acquisition, identification, selection, development, remuneration, career planning and the creation of creativity enhancing working conditions [5, 16–18]. In the early stage of research on TM, most scientists focused on the identification and description of practices introduced in organisations running TM programmes. This resulted in a focus on a universalistic approach, according to which, best-practices developed in some organisations can be applied in others. Recently, the approach that gathers more and more attention is that which states that the diversified context of running the business should be included in research on TM [11, 19–21]. The reason behind this is to identify a specific, context-related set of practices that would be of higher effectiveness for the given company.
As most scientific publications regarding TM focus on large or multinational corporations, TM in other types of organisations is under-investigated. There is a scarcity of literature on TM in public administration, non-governmental organisations and SMEs in particular. According to Krishnan and Scullion [8], TM practices existing in large companies cannot be directly incorporated into SMEs. Small or medium entities have different structural forms, management processes, less developed HRM practices, and according to Patel and Cardon [22], in many cases owners or managers of SMEs are not trained in managing people. Nevertheless, according to Fabi et al. [23] the development of HRM capabilities allow SMEs not only to improve their productivity but also to enhance profits stemming from research and development activities and introducing advanced manufacturing technologies. Thus, it can be stated that TM should be implemented in SMEs but it can be structured in various ways due to their heterogeneity, context diversity and TM practices complexity. According to Festing et al. [9] ‘there is a need for theoretical perspectives and conceptual developments to increase understanding in the TM area, and more generally, to explain why talent management in SMEs differs from that in large organisations (p.488).
Recent studies on TM in SMEs reveal many differences between SMEs and large, multinational companies in the approach to managing this group of employees. According to Valverde et al. [10], SMEs pay more attention to performance rather than to potential in the talent identification process, and the personal allegiance to the company is perceived as an important indicator. In these companies, talents can occupy various positions, but in many cases they are perceived as successors. The authors concluded that in general, SMEs apply the same HR practices to talented and non-talented employees. The research conducted by Festing et al. [24], made it possible to create three clusters defining the approach to TM in SMEs. These are as follows: highly engaged talent management, reactive talent management and retention-based talent management. In the first cluster, companies that apply the variety of TM practices were included. The second referred to companies focused on HR planning (talents recruitment and identification) and not paying attention to investing in employees and retaining them. The last cluster includes companies undertaking actions that preventing turnover (for example training, career planning). Pauli and Pocztowski [25], on the basis of the criteria of talent indicators, approach to TM, main activities, scope of talents tasks and roles, existence of HR activities related to talents, and main areas of talents development, identified six clusters of TM in SMEs. These were labelled as: high performance manager, high performance specialist, high potential internal consultant, high potential specialist, high potential manager and creator.
The results of the research concerning TM in SMEs proves that these companies may incorporate a variety of actions aimed at managing their most valuable employees, and the scope of these practices may be highly dependent on contextual factors.
Contextual factors
Talent management always takes place in a certain context that is perceived as all internal and external factors determining policies and practices such as: recruitment and selection, remuneration, development, retention of talented employees. Considering talent management from a broader perspective of human resource management it should be emphasized that context is interpreted differently when taking into account the perspective from which the policies and practices are approached. Thus, in the situational approach known as the high–context perspective, it is of major significance, while in the universalistic approach, the low–context perspective, its significance is low [26, 27]. This poses a dilemma between “best practice” and “best fit” [28] as well as convergence vs. divergence in HRM [29, 30].
The universalistic approach assumes that best practices can be applied to a high extent in diverse organisations. Nevertheless, organisations are not as homogeneous as empirical research would suggest. Thus, a one-size-fits-all approach may not reflect the diversity of the human capital pool and the ways in which the needs and expectations of companies’ stakeholders should be meet. A one-size-fits-all approach to managing and measuring HR initiatives may not reflect how firms manage their diverse pool of human capital as well as their relative performance of meeting the needs of different stakeholder groups [31]. HRM is dependent on the context in which it was designed; thus, generalisation may lead to losing valuable data referring to the context in which particular practices were developed [32].
Appropriately designed HRM creates the conditions under which employees can meet the expectations of various stakeholders, located both inside the organisation (supervisors, peers, subordinates) and outside the organisation (customers, family, society) [33]. Additionally, these factors can create the specific subsystems when taking into account particular regions [34]. According to Farnham [35], HRM takes place in a given context determining management policies and practices encompassing people in an organisation. External and internal environments create context in which HRM systems and talent management practices should be designed and developed. When analysing the appropriateness of particular solutions, it is necessary to verify them through the lens of their interconnections with the factors in which they are embedded [36].
Recently published papers stress the importance of the multi stakeholders’ perspectives and incorporates situational factors as each firm operates in a different context [37]. It is claimed that HRM cannot be analysed in isolation of the economic, social and institutional context without taking into account the interrelationships between the factors emerging from these contexts [38] as in many cases, initiatives undertaken by managers are relatively tightly dependent upon externally located limits [39].
The issue of talent management context is becoming increasingly important, both in theory and practice. From the theoretical point of view, the increased significance of TM context is the result of a need to define it as a dynamic element. In TM practice the increased significance of contextual factors stems from changes in the organization’s environment, often characterized as volatile, uncertain, complex, and ambiguous (VUCA). Researchers and practitioners currently find themselves in an era of big disruption due to the advent of the Fourth Industrial Revolution which is rapidly transforming businesses and the workplaces, creating implications for both mentioned groups. When doing research in the field of HR it is also becoming increasingly important to include the expectations of a wider group of stakeholders, comprising employees, their representative bodies, employer associations, NGOs, and labor market institutions [40]. Thus, analyzing internal and external contextual factors is becoming a central research subject in the field of human resource management, and especially HRM and TM in SMEs.
In the articles referring to the contextual issues, a variety of context components can be identified. Examples of contextual factors discussed in scientific papers are presented in Table 1.
Context Components
Context Components
Additionally, the contextual SHRM Framework focuses on three broad contextual mechanisms: competitive mechanisms (position of the firm on the marketplace based on its products or services, competitors in the market, and technology – it may refer to the way firms build unique resources that lead to the creation of valuable internal organisational capabilities); institutional mechanism (based on prevailing social, political, cultural, legal and regulatory aspects of the environment); firm’s heritage mechanism (the way past strategic choices interact with the organisational structure and culture – this mechanism is based on path dependency associated with the way in which a firm has operated in the past and how it determines future activities) [27].
The variety of contextual factors, combined with the complexity of TM may cause companies to apply diverse approaches to managing their most valuable employees. Despite the fact that the scope of TM in SMEs could be similar to those implemented in large companies, the particular activities can differ significantly.
Exploring contextual factors will be beneficial for research in the field of talent management in SMEs, which contribute to the body of knowledge. At the same time including contextual factors in the practice of TM in SMEs leads to improvements of the decision making process and contribute to the professionalisation of practical solutions in this area. Thus, according to Gallardo-Gallardo, Thunnissen and Scullion [13], and Krishnan and Scullion [8] investigating TM in SMEs requires the inclusion of internal and external contexts.
It has been previously mentioned that the issue of TM in SMEs is underdeveloped as most publications refer to large and often multinational corporations. It can also be claimed that research on TM and sustainability is scarce, but the idea of sustainability is vital in many areas of economic and social activity and it impacts upon the running of enterprises [41, 42] and human resource management [43–47]. When adapting sustainability to research on enterprise management and HRM, the concept of sustainable development [48] and the Triple Bottom Line model [49, 50] can be applied. Sustainability imposes the inclusion of economic, social and environmental aspects on entrepreneurs when running a business. Thus, it can be assumed that in general, sustainable talent management in SMEs is characterised by a capability to deliver economic/business, social and environmental outputs in order to meet the expectations of stakeholders in the long term. What differentiates sustainable TM from other approaches to managing talents is: building awareness of talents’ strategic importance, linking TM with business strategy, creating TM as a complex process, conducting TM activities in the broader context of internal and external factors, addressing employees and other stakeholders expectations, strengthening trust and promoting social and environmental responsibility. To summarise, sustainable talent management in SMEs as a theoretical framework is a holistic set of practices to ensure that the organisation attracts, develops, and retains talented people to meet its contemporary and future needs in their economic, social and environmental dimensions.
Materials and methods
Research aims and hypotheses
The research corresponds directly to the call indicated in scientific literature for both the building of theoretical perspectives that would enhance the understanding of TM in SMEs [9] and the inclusion of the internal and external contexts in empirical studies [8, 13]. Thus, the following aims were set at the research design stage: exploring the impact of internal factors on TM in SMEs exploring the impact of external factors on TM in SMEs reflecting upon TM practices in SMEs with regard to sustainability issues.
On the basis of these aims, two hypotheses referring to the impact of context on TM practices in SMEs were formulated. The first refers to the external context and states that:
H1: Talent management in small and medium enterprises is dependent upon external contextual factors.
From among the variety of factors which were presented in the previous section, six have been chosen for the purpose of the analysis of the relationship between the external context and talent management practices in the examined companies. These are as follows: employee availability, industry specificity, image of SMEs, competition, legal regulations and access to knowledge.
The second hypothesis refers to internal context and states that:
H2: Talent management in small and medium enterprises is dependent upon internal contextual factors.
In order to test this hypothesis, the following factors were selected: perceived key importance of talents, decision making process, job design/structuration, organisational structure design and formalisation, product/service creation, technology, internal process complexity, HR-strategy, sources of competitive advantage, and organisation size.
Additionally, on the basis of the literature review, we made the assumption that TM practices in SMEs can be clustered with the use of the scope and complexity of introduced actions. The framework we used in the study includes nine practices: acquiring talents from outside an organisation, identifying talents inside an organisation, recruiting and selecting talents, developing and training talents, planning talents’ career paths, shaping the remuneration system for talents, assessing talented employees, employer branding, and involving talents in project teams. The combination of such practices made it possible to design the following four clusters:
This classification corresponds to a high extent to that which was developed by Festing et al. [20]. However, we have introduced an additional cluster referring solely to talent development.
The third aim of the research focuses on the issue of sustainability in talent management practices. Sustainable talent management is characterised by the capability to deliver economic, social and environmental outputs in order to meet the expectations of the stakeholder in the longer term. In order to explore the sustainability of TM in the examined SMEs, the following indicators were adopted: strategic awareness of talents and TM; putting TM in a broader context (environmental and stakeholders); linking TM with performance and business strategy; creating and preserving continuous learning; addressing employees’ expectations, incorporating CSR activities and building trust.
Sample and data collection
The research was conducted on a randomly selected group of 200 SMEs from the database of the Statistics Poland. In accordance with the definition provided by the European Commission, we included companies that employed 10–250 employees. In total 314 SMEs were contacted, out of which 114 claimed they do not introduce TM programmes, or refused to take part in the research. Data characterising the sample are presented in Table 2.
Sample characteristics (in %)
Sample characteristics (in %)
To collect data, the computer assisted personal interview (CAPI) technique was employed. Owners or managers were interviewed with the use of a questionnaire comprised of three main sections. The first section covered issues connected with the context in which SMEs operate. We asked questions concerning the sources of competitive advantage, number of competitors companies to point out the importance. The second section was aimed at collecting information concerning TM actions. The third section targeted the evaluation of trends in performance indicators relating to their business. In the questionnaire multiple-choice, open-ended and single choice questions were used. When designing the questionnaire we referred to both talent management and SMEs management issues discussed in articles that served as the theoretical background of our study. In this article, only data referring to the context and practices were used. All questions were open-ended and multiple-choice, which made it possible to evaluate the level of application of theoretically grounded practices and to capture distinct actions undertaken by a particular company. On average, the interviews lasted thirty minutes.
In statistical analyses, descriptive statistics as well as chi-square tests were used. The first group of methods was used to verify the dispersion and frequency of answers. It made it possible to group companies into TM clusters and to evaluate the importance and the strength of the impact of particular contextual factors. To test the formulated hypotheses, chi-square tests were used as they enable verification of the interdependence of categorical values. Our dataset contained observations referring to the distribution of simultaneously existing variables. To test the hypotheses, crosstabulation tests between these variables were performed.
Results
An overview of talent management practices in the investigated SMEs
In the surveyed companies, the understanding of talent was mostly connected to high-level skills, performance and knowledge. In the majority of small and medium enterprises, talent referred to a person rather than a role or a position in an organisation. To investigate the maturity of talent management, the examined SMEs were divided into three groups. The first group included companies that had used talent management practices for one year (28.5%), the second group comprised companies that had introduced such activities in the previous 2–5 years (54%), and finally, the third group consisted of those companies for which the system of talent management had been applied for at least six years (17%).
The analysis of the methods of TM implementation indicates that the largest share (33%) applies to companies that conducted talent management processes in the form of planned activities aimed at all employees. Planned activities dedicated to some employees were indicated by 25% of the examined SMEs, followed by companies that undertook ad hoc actions when necessary (20%). Apart from the above-mentioned ways of managing talents, there were also less frequent indications such as special programs dedicated to talented employees (9.5%), the occurrence of occasional activities (6.5%), or a lack of such activities (5.5%).
The collected data enabled the creation of further classifications of talent management practices. Firstly, it was found that 58% of the examined companies applied a systemic approach to talent management in comparison with 32% of companies that did so occasionally.
Secondly, there was a similar share of SMEs pursuing an exclusive approach to talent management (34.5%) as those with an inclusive approach (33%).
The research results indicate that the scope and complexity of TM practices in SMEs are very diverse. Only 1% of the investigated companies claimed to have introduced six practices, which was the highest number of indicated activities. By contrast, as many as 24% of SMEs declared running only one out of the nine practices. The highest share of companies introduced three practices.
The following activities were implemented within the framework of the talent management system: identifying talents inside the organisation (45.5%), developing and training talents (41.5%), recruiting and selecting talents (40%), planning talents’ career paths (30.5%), assessing talented employees (26.5%), shaping the remuneration system for talents (22%), acquiring talents from outside the organisation (20%), employer branding (12.5%), creating project teams (5%). The average number of activities introduced was calculated at the level of 2.44, standard deviation 1,10, min. 1,0, max. 6,0 with the median value at the level of 3.
On the basis of the empirical research and using the framework of four talent management clusters (acquisition, development, retention, and complex), it may be concluded that the highest share of the investigated companies are in the complex talent management cluster (37%). One-third of the examined companies (33%) are classified as talent-retention-oriented organisations with a broad range of activities focusing on retaining talented employees. Talent acquisition was represented by 25.5% of SMEs through undertaking such activities as seeking talents outside and inside the organisation as well as employer branding. The smallest percentage of the surveyed companies (4.5%) were talent-development-oriented SMEs with a relatively narrow scope of activities focusing mainly on training, development and career planning.
The data contained in Table 3 show that in the most strongly represented cluster (complex talent management) the largest percentage of companies were those that implemented planned activities addressed to all employees, followed by planned activities dedicated to selected employees. In total, these two groups, characterised by planning activities, accounted for 77% of the surveyed SMEs. the share of companies carrying out complex TM activities in a previously prepared/planned manner may prove the existence of sustainable talent management.
The relationship between TM clusters and the approaches to conducting TM activities
The relationship between TM clusters and the approaches to conducting TM activities
*Statistically significant for p < 0,05; share in %.
In the second largest cluster, focusing on talent retention, planned activities addressed to all employees and those intended for selected employees also had the largest shares. These approaches to practising talent management accounted for a total of 60%, and together with dedicated programs for talented employees, this amounted to 64.5%. In the case of the other two clusters, the share of planned activities was lower and, along with programs dedicated to talented employees, amounted to 48% for the cluster including companies focused on talent acquisition and 33% for the cluster focused on employee development. The most common approach to practising talent management in these clusters were ad hoc actions when such needs arose. Moreover, there were the highest percentages of companies not engaged in talent management activities in these two clusters.
The characteristics of internal factors
The internal factors adopted in the research as independent variables determining talent management practices are: the perceived key importance of talents, decision making, jobs structuring, the organisational structure, products/services, technology, processes, HR-strategies, the sources of competitive advantage, and the size of organisations.
In the companies in question, the importance of talented employees was stressed – as many as 88% of companies declared high or very high importance. Another internal factor influencing the system of talent management was the method of making decisions. The most frequently practiced method was managers making decisions with the limited participation of employees (52%) and the next most frequent method was managers making decisions without the possibility of employee participation (22.5%). High employees’ involvement in decision-making was reported by 19% of the surveyed companies, while joint decision-making was declared by 6.5% of the examined SMEs.
When it comes to job structuring/design as a factor influencing talent management, the largest share of SMEs were companies in which tasks in work positions were defined to only a certain extent (52%). Well-defined tasks for all employees were recorded in 23% of the surveyed companies, while the lack of clearly specified tasks and responsibilities occurred in 25% of them.
Only 6% of the surveyed companies declared that they had precisely defined and described elements and dependencies in their organisational structure which was another internal factor determining talent management. In the majority of SMEs (63.5%), the structural solution involved the existence of separate organisational units responsible for carrying out specific tasks or activities. Of the surveyed companies, 20% had separate units in their organisational structure carrying out tasks/activities with specific relationships between them, while 10.5% did not have a clearly defined structure and intra-organisational links.
The method of developing products or services was another factor as far as the influence on talent management practices is concerned. Among the surveyed companies, the largest share, amounting to 57.5%, was held by those whose products/services were created on the basis of other products/services, appropriately modified, improved, and extended with new functionalities. Companies whose products were based on other products/services already available on the market amounted to 34.5%. The percentage of SMEs offering products/services based on their own ideas that were significantly different from others available on the market was 7.5%.
When it comes to manufacturing technologies and the methods of providing services, which constitute another internal factor, the largest percentage was represented by those applying commonly used solutions, systems, and machines/devices among the examined SMEs (54.5%). The second largest group were companies that partially applied commonly used solutions, and partially applied solutions modified and adapted to their own needs (41%). Technological solutions resulting from their own innovations were declared by 4.5% of the studied SMEs.
Of the surveyed SMEs, 73% declared that their activity in the area of talent management was linked to their business strategy. When asked about having a TM strategy or assumptions defining the goals of talent management, 18.5% answered “yes” in writing, and 36% answered “yes”, however not in a written form. The largest percentage were companies where such goals were formulated in relation to certain areas (39%); however, it was not a comprehensive approach.
The sources of competitive advantage are another factor determining the approach to talent management in the studied SMEs. Based on the analysis of factors indicated as the most important in building the competitiveness of companies, it was found that the largest share of SMEs indicated the strong role of certain selected factors, mainly those classified as tangible assets (40.5%). The second group in terms of the number of responses were companies indicating a strong influence of most factors (31%), while the third group of companies emphasised their weak influence (24%). SMEs that identified a strong influence of mainly intangible factors accounted for 7% of the studied group.
The last factor considered in the context of the impact of internal factors on talent management was the size of an organisation measured by the number of employees. Among the surveyed SMEs, the largest share, amounting to 67%, was that of small companies employing up to 50 people. Companies employing between 51 and 100 people accounted for 41% and those employing from 101 to 250 people accounted for 7%.
Internal factors and TM clusters
The table below presents the relationships between the internal factors and the four clusters of talent management practices. Additionally, the most frequent forms of influence of particular factors are indicated.
In each of the four distinguished clusters, most companies attributed special importance to talented employees. The highest percentage was recorded among those SMEs who implemented a system of complex talent management. The most frequently used method for making decisions in three out of the four clusters was managers making decisions with limited opportunities for employees to participate in this process. Only in the cluster grouping companies focused on development was the most frequently indicated method of making decisions the participatory style, in which employees could submit proposals for goals and activities. When it comes to the most common approach to structuring/designing tasks, it proved to be the same in all the clusters and consisted of defining the scopes of tasks and responsibilities only to a certain extent, in other words, the structuring of tasks was partial. This was also the case with an organisational structure, where the most common form in all of the groups was a solution consisting of separating certain units responsible for the implementation of specific tasks or activities. Developing their own offer of products or services based on other products/services, was the most frequent form of shaping the product offer in all the clusters. The use of technologies commonly available on the market in the form of solutions, systems, machines, and devices, like those used by other companies, was most frequently indicated in three clusters but not for the cluster focused on the development of talents. In this cluster, the most frequently indicated technologies were solutions partly widely available, and partly modified and tailored to suit the specific needs of the organisation in question. As for the human resource management strategy, only in the group of companies applying complex talent management did the highest percentage of indications concern having such a strategy. However, in the remaining three clusters, the lack of a comprehensive solution and the formulation of objectives regarding certain areas were mentioned most frequently.
Analysing the sources of competitiveness in the context of their impact on talent management practices showed that in three clusters, there were several factors mentioned most often which were considered significant or very significant for competitiveness. They were mostly tangible factors. Only in the cluster of companies applying the complex talent management did the highest percentage of companies indicate most factors as influencing their competitiveness; however, they considered their impact to be small or very small (32%). The data contained in Table 4 show that in all the clusters, the share of companies employing up to 50 people was the highest.
The relationships between TM clusters and internal factors
The relationships between TM clusters and internal factors
*Statistically significant for p < 0,05; share in %.
To sum up, the above description of the impact of particular internal factors on talent management in the four clusters indicates a significant differentiation of this impact in relation to most factors.
The characteristics of external factors
Among the variety of external factors, six have been chosen to analyse the relationships between them and talent management practices in the examined companies. These factors are: employee availability; the specificity of the industry; the image of SMEs; competition; legal regulations; access to knowledge.
As can be seen in Table 5, employee availability, competition, and the specificity of the industry were pointed out as the most influential external factors determining talent management practices in SMEs. The answers reflected the situation on the labour market at the time when the research was conducted. As for the other factors, more than half of the examined companies assessed their impact as strong. The percentage of indications of “no impact” was low. In this group, access to knowledge and legal regulations were mentioned most often.
The influence of external factors on TM in SMEs
The influence of external factors on TM in SMEs
Note: N = 200, share in %.
The data contained in Table 6 reveal the distribution of responses indicating a strong influence of particular external factors on talent management practices within the four clusters. As for the factor of employee availability, its value was the highest of all the factors in each of the four clusters. In the cluster of complex talent management, this factor was given much greater importance than the others, of which competition was ranked second. Relatively smaller differences between the factors were noted in the talent retention cluster, where the difference between the three most important factors (employee availability, competition, and the specificity of the industry) was small. The cluster of talent development is characterised by a large difference between the most frequently mentioned factor (employee availability) and the second most frequently mentioned (industry specificity) as well as other factors. In the talent acquisition cluster, two factors (employee availability and competition) obtained the same number of indications.
The relationships between external factors and TM clusters
The relationships between external factors and TM clusters
*Statistically significant for p < 0,05; share in %.
To sum up, it can be stated that the obtained data on the importance of external factors in the systems of talent management in small and medium enterprises confirm the fact that these companies react to the situation in their environment. This is evidenced by the indicated strong influence of such factors as employee availability and competition. During the period of the empirical research, the labour market was characterised by difficult access to talented employees and competition for their acquisition. On the other hand, the relatively lower position of the image of SMEs as a determinant of talent management practices may indicate the dominance of ad hoc measures resulting from the situation on the labour market at the expense of a well-established, long-term policy in this regard.
The previously discussed talent management practices and their connection with internal and external factors allow us to conclude that in the studied group of SMEs, one can see certain elements of sustainable talent management. These are evident in the talent management policies and practices outlined below.
The awareness of the strategic importance of talented employees in the activities of small and medium enterprises is the basis for the activities undertaken in this area. The vast majority of the surveyed companies assigned special/key importance to talents (88%) and most companies also planned activities in the field of talent management (58%) and implemented them systematically (58%). An inclusive approach was noted in relation to 33% of the surveyed companies. Of these, 71.5% had implemented talent management for at least two years and 17% for over six years.
Another feature of sustainable talent management is linking activities carried out in this area with the business strategy. Most of the surveyed companies indicated the existence of such a relationship (76%). A similar percentage of companies declared that employee development is linked to the company’s strategy, and 82% of the surveyed companies had development plans for talented employees, which seemed to indicate that their activities in this area are of an enduring nature.
Sustainable talent management covers a wide range of activities that contribute to this process. This fact is reflected in the surveyed SMEs, especially in the case of the complex TM cluster, grouping companies that use all of the defined HR activities concerning talents. The share of this cluster was the highest in the studied sample and amounted to 37%.
Sustainable talent management is also characterised by identifying and addressing employees’ expectations. According to the empirical research, the surveyed SMEs declared that they recognised and took into consideration talents’ expectations in such areas as promotions, motivation, remuneration, or the organisation of work. With respect to all types of expectations, the total percentage was 70%. It is worth noting that the highest combined percentage with regard to addressing talented employees’ expectations was in the group of SMEs implementing talent management for the longest time, which was at least six years (86%).
The percentage of SMEs which believed that they were perceived on the market as socially responsible companies amounted to 36%, and as trustworthy, 30.5%.
Discussion
Based on the data gathered and the analyses conducted, we can neither support nor reject our hypotheses. Some relationships between contextual factors and TM practices were supported while others were not. Nevertheless, we can conclude that contextual factors impact upon TM practices, but the complexity of these factors and the diversity of approaches to managing talents make it impossible to identify coherent and precise patterns of dependence. Such a conclusion can serve as a basis for pointing out some implications of our study for both theory and practice.
First of all, our study confirms that when investigating TM practices in SMEs contextual factors should be incorporated. Our research proves that SMEs operate in a very complex context and it was impossible to create the coherent classification of factors that impact upon TM. This is in line with Farnham [35] who stated that contextual factors create a variation of the environment in which companies operate and it is very difficult to identify which of them are critical, and with Zhao et al. [34] who found that different regions have different factors regulating talent flows. Moreover, these factors affect strategies, processes and procedures differently. This also supports Farndale’s et al. [37] conclusion that each firm operates in a different context. Moreover, our analysis supports Dundon and Wilkinson’s [38] statement that HRM cannot be analysed in isolation from contextual factors and the interrelationships between them. According to Gallardo-Gallardo, et al. [13], the scope of TM in SMEs can be similar to those implemented in large companies and the particular activities can differ significantly. However, on the basis of our research, we can conclude that even the scope of TM activities is notably different. For example, only nearly one in four companies introduce talents’ crafted appraisal and remuneration systems. Thus, taking into account the diversity of SMEs conducting research on TM requires incorporating procedures that enable the investigation of more homogeneous samples (for example based on business sectors, profile, growth stage or market range).
Taking into account practical implications we may conclude that, as discussed in the introduction, talents bring high value and support in achieving a firms’ competitive advantage. In our research 88% of companies claimed they found talents to be of high importance in assuring business performance. Unfortunately, in most cases TM practices in SMEs are underdeveloped and may limit the possibility to achieve expected outcomes. According to Collings and Mellahi [15] TM should include all activities aimed at providing organisations with a pool of high-potential and high-performing employees and retaining them. Scientific literature on TM enumerate practices that should be implemented in order to provide the highest effectiveness of the process. Nevertheless, this is not a case of SMEs in which TM is fragmentised and not run systematically. Our data shows that only 58% of the investigated SMEs execute TM on a continuous basis. Moreover, in the sample, only 1% of companies claimed to introduced six (out of nine) TM practices, with the average being three. Additionally, almost one out of every four companies introduced a single activity in TM. These may prove that TM in SMEs is underdeveloped and is not organised in a complex manner. This is in line with the findings of Krishnan and Scullion [8], according to which, TM practices existing in large companies cannot be directly incorporated into SMEs. Additionally, investigated companies which declared to address TM practices to all employees or to only some groups of them. This is in line with Valverde et al. [10] findings, stating that in such companies, the inclusive and exclusive approach is applicable. SME clustering, with regard to incorporated TM practices, resulted in the identification of organisations that were acquisition oriented, development oriented, retention oriented and those applying complex TM. This classification is similar to that developed by Festing et al. [24], which may prove that in SMEs, purposefulness can be of the highest importance in designing TM. Thus, we conclude that SMEs owners or managers should pay more attention to craft their own TM practices relevant to their businesses, as only activities aimed at addressing particular expectations and contextual factors can bring expected values.
The facts cited above prove the presence of sustainable features in the systems of talent management in some of the examined SMEs. Due to the large diversity of small and medium enterprises, it is justified to undertake further research in this area and consider other issues, such as sensitivity to changes in the economic, social, and environmental aspects of sustainable talent management under the influence of technological changes, economic prosperity, generational differences or the value and belief systems of owners, managers, and other stakeholders.
Conclusions and further research directions
On the basis of the data gathered and the conducted analyses, the following conclusions can be drawn. Firstly, in SMEs, talents are considered very valuable and have a large impact upon the running of a business, but TM is not as developed as it is in large companies – the scope of TM practices dedicated to talents is much narrower as it does not cover all practices proposed in scientific literature and it is not organised in a complex manner. Secondly, the scope of introduced TM practices is very diverse and it seems like the approach to TM strongly reflects the current business needs. It can be stated that in SMEs, the reactive approach to TM dominates. When designing TM, SMEs strongly rely on the internal circumstances and adapt to the external environment. Thirdly, the most frequently applied approaches to TM are those combining different practices in order to retain talents and also, in most cases, to recruit them. We can also conclude, that SMEs are entities that strongly depend on contextual factors. Moreover, factors referring to tangible resources are those with the highest impact. As the context in which SMEs operates is very diversified, it is impossible to analyse TM practices in SMEs without describing both the internal and external factors that can impact upon them.
The structure of both internal and external factors as well as the diversity of TM practices confirms that SMEs are a very heterogeneous group of companies and investigating any relationships requires narrowing down the sample into more coherent cross sections. Thus, in our opinion further research should be based on homogeneous samples, which in turn could make it possible to identify more direct causal relationships. Moreover, it is necessary to examine the owners’ and/or managers’ approach to TM and their competences in HRM. It seems that this could be the factor that has the highest impact upon the shape and scope of TM practices in SMEs. It also refers to Mayrhofer’s et al. [39] conclusions that managers in many cases undertake initiatives that are relatively highly dependent upon external limits.
Footnotes
Acknowledgments
This paper came into being as a part of project no. 2016/21/B/HS4/01593, ‘Talent Management in Small and Medium Enterprises’, financed by Polish National Science Centre.
Author contributions
The authors contribute to the paper equally in all following categories: conception, methodology, data collection, interpretation and analysis of data, preparation of manuscript, revision for important intellectual content, supervision.