Staffing Practices In Small And Medium Scale Businesses

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Staffing Practices In Small And Medium Scale Businesses


Small and medium scale enterprises (SMEs) play a significant role in promoting economic development in Nigeria. This study is aimed at assessing the staffing practices employed by SMEs in Osun State, Nigeria. A total of 134 respondents were selected from the population figure out of which the sample size was determined. The data collected was analyzed using frequency table, percentage and mean score analysis while the nonparametric statistical test (Chi-square) was used to test the formulated hypothesis using SPSS (statistical package for social sciences). The findings of this study showed that, overall, staffing and HRM practices impact significantly on small scale business performance. Also, financial resources and firm size are major factors that significantly influence the adoption of HRM practice in small scale businesses in Nigeria, and the implication of these findings is that an enabling environment, that will encourage adoption, should be provided. Future research should incorporate study design and theoretical improvements.

Chapter One


1.1 Background of the Study

Staffing is one of the most important functions of management. It is an aspect of human resource management that includes finding sufficient number of people who will take up employment in the business and selecting from this number those to whom employment will be offered. The staffing function is housed in the human resource or personnel department of most large organizations while in smaller organizations where there is often the absence of a well defined separate personnel department, the process of staffing is conducted by the manager or owner of the business.

However, whether small, medium or large scale enterprise the purpose of staffing is ensuring that positions within the organization are filled and remain filled with competent workers doing the work of the organization to ensure that goals are met. Most writers have agreed that staffing is composed of the following parts; recruitment, selection, placement, training and development, employee appraisal and separation. From this it can be concluded that staffing involves processes related to balancing the workload with available resources, recruiting, selecting among candidates for open positions, employees leaving the Organization, and transitioning into new positions (Carnegie Mellon University 001:109). Human resource is considered the most valuable yet the volatile and potentially unpredictable resource which an organization utilizes. If an organization fails to place and direct human resources in the right areas of the business, at the right time and at the right cost, serious inefficiencies are likely to arise creating considerable operational difficulties and likely business failure (Bramham 1990: Smith 1971). Acquiring and maintaining an adequate staff is the best asset an organization can have (Clifford: 1989:145).

Finding and keeping good employees is not a matter of luck but rather the result of aggressive recruitment, careful selection, proper training and motivation and thoughtful management. This may include careful manpower planning to reconcile the organization’s need for human resources with the available supply of labour in the local and national labour market.

1.2 Statement of the Problem

Recent trends at different form in Nigeria have clearly revealed the amount of respect attached to SMEs by government, educational institutions, and corporate bodies; and the development of SMEs has been recognized as a veritable tool for promoting poverty eradication, job creation, rural development and sustainable livelihood for the populace (Iwere, 2013). However, while the contributions of small scale businesses to economic development are generally acknowledged, entrepreneurs in this sector face many challenges that limit their long term survival and development. These challenges have been linked to some economic variables such as high level of unemployment, high incidence of poverty, lack of finance, inadequate infrastructure, low industrialization capacity, inconsistent government policies, among others. Some internal characteristics like low level of entrepreneurial skills, and poor human resource management practices also interact with the economic variables to undermine the capacity of SMEs. This research is therefore aimed at assessing the staffing practices used by SMEs. So that, for increased capacity of SMEs, there is need to understand all possible factors linked to their productivity.

1.3 Objectives of the Study

The main objective of this study is to assess the staffing practices employed by small and medium scale businesses. Specific objectives include;

This study has the following objectives.

  1. To find out the methods adopted to ascertain the staffing needs of their companies.
  2. To ascertain the recruitment methods adopted by the firm.
  3. To determine how job performance is evaluated.
  4. To ascertain the procedures involved in the entire staffing process of the organizations.
  5. To determine the impact of staffing practices on SMEs’ performance

1.4 Research Questions

  1. What are the methods adopted to ascertain staffing needs?
  2. What are the most efficient recruitment methods adopted by firms?
  3. How is Job performance evaluated?
  4. What are the procedures involved in the entire staffing process of the organization?
  5. Do staffing practices have any impact on SMEs’ performance?

1.5 Research Hypotheses

Hypothesis I
  • H0: Staffing practices do not have any impact on SMEs’ performance
  • Hi: Staffing practices have an impact on SMEs’ performance

1.6 Significance of the Study

This work is significant because it will produce data that will be useful: To entrepreneurs; To personnel managers; The researcher and student of management on staffing practices of small and medium scale organizations. This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

1.7 Scope of the Study

This research work focuses on staffing in small and medium scale enterprise. That is, finding out the common trend used by small and medium scale enterprises. But intense study will be done in few organizations in Benin City, Edo State. In this study, we focused on several well-established high performance Staffing/HRM practices, including employee resourcing (ER), reward management (RM), human capital development (HCD), employee performance management (EPM) and occupational health and safety (OHS). The HRM practices were related to two organizational performance dimensions, non-financial and financial, in SMEs in Nigeria.

1.8 Limitations of the Study

The case study research design has limitations because staffing is to be studied in only few companies. This will make it difficult to generalize the findings to other companies. The questionnaire method of data collection is limited to verbalized responses to predetermined answer to questions. The structured and standardized format of the questionnaire may force the respondents to give answers that they do not fully endorse. The limitations are due to time and money constraint.

  • Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
  • Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 Definition of Terms


Staffing is the process of hiring eligible candidates in the organization or company for specific positions. In management, the meaning of staffing is an operation of recruiting the employees by evaluating their skills, knowledge and then offering them specific job roles accordingly.


Small and Medium Enterprises

Chapter Five

Summary, Conclusion and Recommendations

5.1 Summary of Findings

The purpose of this study was to assess the staffing practices employed by small and medium scale businesses. A single hypothesis was formulated to guide the researcher. By the hypothesis, the researcher sought to uncover whether staffing/human resource management practices has any impact on SMEs’ performance. Analysis of the data collected showed that SMEs’ economic performance was greatly impacted by human resources management or staffing adopted. The null hypothesis was therefore rejected.

5.2 Conclusion

Based on the findings of this study, it can be concluded that, overall, staffing practices impact significantly on small scale business performance in Osun State, Nigeria. Also, financial resources and firm size are major factors that significantly influence the adoption of HRM practices in small scale businesses in Nigeria. The implication of these findings is that an enabling environment, that will encourage adoption of HRM practices by small scale businesses, should be provided. This is expected to facilitate their ability to grow and build up the required capacity for the promotion of sustainable development in the nation.

5.3 Recommendations

Future research on the topic of the performance of SME’s and HRM practices should incorporate study design and theoretical improvements.

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