Identify Human Resource Management (HRM) Challenges and Develop Effective HRM Practices for Single Owner-Small and Medium-Sized Enterprises (SO-SMEs) in Saudi Arabia

Abstract

Globally, small and medium-sized enterprises (SMEs) are known for creating new employment opportunities, social growth and cohesion, consequently, contributing to the economic development and stability of a nation. However, on the ground, it’s quite common to see SMEs are easing out of business. This is mainly because SMEs often do not devote time and discipline to effective HRM, therefore, the importance of employee recruitment, selection and retention in success cannot be undermined in the growth of SMEs. In this research, current HRM practices including employee recruitment, selection and retention single owned SMEs in Saudi Arabia, mainly in the two big cities – Jeddah and Riyad – are reviewed and developed effective HRM practices. The research methodology adopts both secondary and primary data collection methods. For secondary research, reviewing the previous studies on employee recruitment, employee selection and employee retention methods helped me construct my questionnaire, later that was directed to Single Owner- Small and Medium-Sized Enterprises (SO-SMEs) in Saudi Arabia (Mainly in Riyadh and Jeddah). For primary research, collecting quantitative through sixteen closed ended questions as well as qualitative data through one open ended question. The study provides insights into the current practices in employee recruitment; selection and retention in SO-SMEs in Saudi Arabia revealed that the employers are adopting more laissez-faire methods of checklists, rather than traditional HRM methods followed by big businesses, these practices might place their businesses at disadvantage in terms of their ability to recruit, select and retain the best talents in the competitive market. The findings in this study would add to the literature on SO- SMEs recruitment, selection and retention practices. The study is however is limited to the fact that data for this investigation was collected from two cities Riyadh and Jeddah) which may not be a representative of entire country. There is also a need to apply statistical techniques like exploratory factor analysis (EFA) in form of principal component analysis to reduce the large number of variables into small set of factors, using ANOVA to compare significant differences and regression analysis. The future research must focus on other cities and rural areas in Saudi Arabia with a large sample size to give a realistic picture of recruitment, selection and retention practices in SO-SMEs in Saudi Arabia.