A REVIEW OF SMEs RECRUITMENT AND SELECTION DILEMMA: FINDING A ‘FIT’

Intellectual capital has emerged as a key component in a firms‟ future success in innovation and knowledge building. This review paper investigates whether the recruitment and selection process is regarded as a strategic function in SMEs. The current debate is on the extent of Strategic Human Resource Management (SHRM) effectiveness on management practices. It is to ascertain which of the HR architecture influences firm performance. The HR architecture is the process that facilitates HR functional activities. Research in HR has moved towards issues that seek answers on how HRM practices can contribute towards organisational performance. In Malaysian SMEs the priority functions tend to be marketing, finance, accounting and production, whereas HRM practices are seen as less important, weak and unsophisticated. The review of literature on recruitment and selection processes may provide insights on the concept of „fit‟, viewed as the compatibility between the individual and environment. Although there are models of recruitment but its „fit‟ as a SHRM process in firms is unclear. In SMEs the assumption is the probability of disconnect between the recruitment process and SHRM initiatives. Although most HR managers in Malaysia may be familiar with the philosophy of SHRM but the understanding of recruitment and selection process as a HR architecture linking the firm and HR strategy may be vague. The objectives of this review paper is to investigate theoretical approaches that may determine whether the recruitment and selection process in SMEs shows evidence of strategic „fit‟ and second, examining the extent of a structured recruitment and selection process in SMEs which is innovative and flexible. JEL Classifications: M05, M51, M510