Human Resource Management Issues as Growth Barriers in Professional Service Firm SMEs

This paper analyses how SMEs and more specifically Professional Service Firm (PSF) SMEs, face the growth barriers that arise when the managerial roles in the firm need to change. Human resource issues will be important in every organisational setting. These issues will, however, be of paramount importance for service firms as the human contingent within the firm is effectively its only real 'asset', and constitutes 100% of the product portfolio. Growth within PSFs requiring the mass production of specialist service, will change the nature and shape of the organisation and increase the requirement for 'managerial' processes to exist within the so-called middle line. The very existence of management, in a professional context, can be the source of organisational tension as professionals tend to regard themselves as self-regulating individuals government by the standards and codes of practice established by their own professional body. The natural resistance to external managerial influences, and a desire to progress, both professionally and financially, will mean the firm has to 'strike' a delicate balance between the desires of its professionals for advancement, and its own organisational objectives which will, inevitably, require the creation of congruent environments. The purpose of the paper is to look at the growth issues typically facing entrepreneurial start-up and small firms. The intention is to focus on the issues of a Human Resources and to consider how these act as growth barriers. More specifically, this will be considered for PSFs as they rely solely on 'human capital' as their primary source of production, and because the complex nature or professional working environments give rise to particular management challenges. To clarify, the study focussed on firms located in the UK and the US