Staffing Practices in Australian ICT Micro-Firms: growing virtual?

Human Resource Management (HRM) research, theory and practice overwhelming views the staffing of firms as a series of discrete functional activities, such as recruitment, selection and training. In this study, we investigate how organisation theory, specifically transaction cost economics (TCE), agency theory and the resource-based-view (RBV), may enhance the understanding of functional HRM practices within the very smallest of firms: micro-firms with fewer than five employees. Our study finds that organisation theory is indeed a useful complement, shedding light on how entrepreneurs manage staffing issues and challenges. Further, this study lends support to the notion that research on entrepreneurial firms differs to that of large, established organisations. Whilst functional perspectives may be appropriate for the latter, due to their greater size and formalisation, a combination of functional and organisational perspectives is beneficial for the former, as using the functional lens on its own does not align with how the owner-managers of micro-firms perceive the issues they need to resolve in managing their organisations, their employees, and their contractors