Human resources and SME performance in services: empirical evidence from the UK
Pitelis, Christos N.
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We investigate the relationship between Human Resources (HR) and superior firm performance, as well as the role of business strategy as a key mediating factor of this relationship, for Small and Medium Sized Enterprises (SMEs) in the UK Tourism Hospitality and Leisure (THL) sector. Our results suggest that high-performing SMEs in the THL sector are managed by more experienced entrepreneurs. We also find that more profitable SMEs combine a highly skilled workforce with technological and know-how-based firm differentiation strategies, and/or product differentiation strategies, which are based on quality of service and personal attention to customers, alongside generous compensation and attention to employee development.