The importance of human resource (HR) practices to firm productivity is a hardy perennial in academic and policy commentary. Bafflingly absent from this discourse is an important segment of the small firm population: ethnic minority microbusinesses (EMMBs), which consist of firms with between 1 and 9 employees. This omission is surprising given the economic and social value of EMMBs: they contribute £25 billion Gross Value Added to the UK economy, and can provide a route to social mobility for marginalised communities. In a novel collaboration comprising researchers and community-based intermediaries, we set about engaging EMMBs in a long-term programme aimed at encouraging the more productive use of HR practices in firms that rarely utilise formal HR expertise or business support. Our experience challenges pre-existing academic views of HR in EMMBs, and suggests such firms are open to engagement if interventions are appropriate to their context.
Promoting HR change in EMMBs is difficult for several reasons. Informality is pervasive in these firms, with an associated absence of formal HR and management practices. ‘Owner-centrism’ prevails – where the personal preferences of the proprietor and family members often trumps conventional management techniques and processes. The ascendancy of the owner-manager, coupled with his/her confinement to family and social groupings, means that EMMBs are often detached from ‘mainstream’ business support and HR networks. Such firms operate in competitive market niches and use a restricted pool of co-ethnic labour. Owners are often intent on survival rather than growth; and they rarely utilise external networks that promote the uptake of HR practices or modernisation.
We addressed these challenges by engaging in a programme of action research (during 2019-2021) comprising researchers and community-based intermediaries who enjoyed trust-based relationships in the two sectors we focused on: Bangladeshi catering and creatives (representing the traditional and new economy). The pandemic – which struck midway through the project – proved to be a key turning point. Many of the business owners in our study effectively lost their market overnight and were desperate for support. The research team tried to facilitate connections between the owners and mainstream support agencies, but the process proved too cumbersome or irrelevant to the pressing needs of the entrepreneurs.
The close dialogue between researchers and business owners – typical of the action research method – led to exploration of alternative approaches and resulted in two co-designed interventions.
The first of these was THE P WORD, a programme that: connected creatives to business support networks from which they were previously excluded, provided urgent commercial guidance on surviving the pandemic, and resulted in several contracts. The programme also kindled an interest in leadership development and structuring informal collaborations between creatives – both processes are precursors to nurturing interest in HR practices that can boost productivity.
In the second case, caterers expressed a need for digital training to help them ‘pivot’, and to avoid what they saw as the exorbitant fees of well-known online delivery platforms. The researchers enlisted the support of the Aston Business Clinic to design and deliver an intervention on digital transformation in the Bangladeshi catering sector. The intervention was well received and cultivated an interest in longer term processes of support aimed at the more productive use of human resources.
Academic and policy commentary on productive ways of working to date has largely ignored EMMBs. This neglect is detrimental to the public commitment of the HR profession and business support agencies to ‘inclusion’ and ‘access to opportunity’ for all businesses and communities. Our study shows that the perception that EMMBs are uninterested in engagement and more productive ways of working is in urgent need of modification. Several implications follow:
• The lived experience of EMMBs needs to be fully appreciated. It is often at odds with conventional academic and policy perspectives. Working with appropriate intermediaries to elicit this understanding is hugely beneficial
• Sustained commitment from intermediaries and academics is required if EMMB owners are to be engaged in effective programmes of business and HR support
• A more inclusive ‘ecosystem’ of traditional and non-traditional partners helps to engage EMMBs in development programmes focused on more productive methods of operating
• The shock of COVID-19 may prompt significant changes to traditional working practices and represents an opportunity for HR and business intermediaries to deepen their engagement with a community that has often eluded their attention.
Monder Ram and Imelda McCarthy, CREME
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