Talent Management in SMES: Unravelling the Role of Contextual Factors

Employing a multiple case study analysis, this paper explores the contextual factors – internal, external and relational – that affect small and medium-sized enterprises (SMEs) in designing their approaches to talent management (TM). Results underscore the significance of two prominent internal variables – namely, organizational size and ownership structure – alongside an external determinant represented by the industry/sector within which the company operates. The study also revealed that the economic and social context in which the company is situated is not only a geographical characteristic (thus constituting an external factor) but also furnishes valuable relational resources subsequently influencing the approaches to TM. Additionally, we found that while industry/sector simply dictates competency needs (hard or soft), the size of the company (affecting TM resource availability) combined with the ownership structure (affecting TM scope and level of formalization) generate specificities in TM practices. Relational factors – namely “local embeddedness” – appear to assume a pervasive role.