Edith Cowan University

Research Online
ECU Publications Pre. 2011

2007

Small business owners: too busy to train?

Elizabeth Walker
Edith Cowan University, elizabeth.walker@ecu.edu.au

Janice Redmond
Edith Cowan University, j.redmond@ecu.edu.au

Beverley Webster
University of Hong Kong

Megan Le Clus
Edith Cowan University, m.leclus@ecu.edu.au

This article was originally published as: Walker, E., Redmond, J., Webster, B. & Le Clus, M. (2007). Small business owners: too busy to train?. Journal of
Small Business and Enterprise Development, 14(2), 294-306. Original article available here This article is (c) Emerald Group Publishing and
permission has been granted for this version to appear here. Emerald does not grant permission for this article to be further copied/distributed or
hosted elsewhere without the express permission from Emerald Group Publishing Limited.
This Article is posted at Research Online.
http://ro.ecu.edu.au/ecuworks/6645

Research Paper
Small business owners: too busy to train?
Elizabeth Walker1, Janice Redmond1, Beverley Webster2 and Megan Le Clus1
School of Management, Edith Cowan University1 and Division of Learning,
Development and Diversity, University of Hong Kong2

ABSTRACT
Purpose - The reasons often cited for the poor relationship between small businesses
and their uptake of vocational education and training is because small business ownermanagers claim they are too busy to engage in training or any type of learning activity
and that most training is of little value to them. The aim of the research was to
examine the relationship between these factors.
Design/ Methodology/ Approach Using qualitative research methods the study
collected data of the knowledge, attitudes and needs of small business ownermanagers, both before and after participation in a training program.
Findings - This study has indicated that small business owners are interested in skills
development and training opportunities, providing they are directly applicable to the
current situation in their business, and as long as the delivery process is carefully
structured in terms of location, time of day, and length of session.
Practical Implications The success of a human resource management training
program offers both an incentive for other educators to continue to pursue small
business participation and useful guidelines for the implementation and the
development of new programs for the small business sector.
Originality/Value The approach taken in this research has offered important
insights of the value of training and how it is evaluated by small business owner-

managers. This is important as owner managers are the primary decision makers
about whether or not training takes place.
Key Words - small business, training, human resource management training, skills
development, adult learning.
Paper type Research paper

INTRODUCTION
Poor managerial competencies have often been linked to small business failure
(Gaskill, Van Auken, and Manning, 1993; Jennings and Beaver, 1997; Perry, 2001).
However small business 1 is vital to all economies and within the Australian context,
small business represents a significant employer of labour as well as providing
employment for the owners of the business. Of the 1,179,300 small businesses in
Australia, an estimated 1,591,500 people were business operators (ABS, 2004).
Consequently, small enterprises represent a significant component of the private
sector workforce in Australia.

It is also acknowledged that small business owner-managers, compared to ownermanagers of larger businesses, have lower formal education levels and participate less
in skills development and training activities (Bartram, 2005; Billet, 2001) and that
there is a lack of emphasis on the relationship between successful business operation
and management training (Billet, 2001; Westhead and Storey 1996; Wooden and
Baker, 1995). An educated and skilled labour force is considered to be essential to the
success and growth of small business and for businesses to gain some competitive
advantage in the global economy (Cosh, Duncan, and Hughes, 1998; Huang, 2001).

The Australian Bureau of Statistics define a small business as a business employing less than 20 people, independently owned,
displays close owner/manager control, and where principle decision making is made by owner/managers (ABS, 2004).

The influence of the human resource capabilities of the small business ownermanager is therefore critical in this process.

Recently, Hiltrop (2005, p.122) has asserted that a number of studies have provided
growing evidence that "indicate overwhelmingly that good management fosters
organisational success, whereas less effective people management practices foster
failure and distress." A key to gaining small business interest in training per se may
be to establish sufficient evidence of the relationship between participating in training,
increased people management skills and improved business performance. Hiltrop
(2005) has suggested that the level of business performance achieved will be directly
related to the extent that the owner-manager is able to implement the management
practices required to manage people and their contribution to the success of the
organisation. Therefore, the better skilled owner-managers are at human resource
management, the better potential they will have to contribute to the success of their
business.

Whereas it could be assumed that all small business owner-managers want their
businesses to be successful and strive towards that goal on a daily basis, the reality is
that many small business owner-managers are poorly equipped to deal with the
continual and relentless issues that face business today. Indeed many small business
owner-managers have few managerial competencies when they start their businesses
and do not actively seek opportunities to further develop their managerial skills
(Webster, Walker, and Turner, 2005).

To facilitate greater participation by owner-managers in training activities Ehrich and

Billett (2004) have recommended the development of pedagogic principles that are
suited to the changing skills development needs of small businesses. Of particular
interest to the business owner-manager will be the impact that training will have on
the business, not just in terms of the bottom-line, but also for its relevance and
application to day-to-day operations. Storey (2004) and Westhead and Storey (1996)
have also highlighted that there is not enough emphasis placed on the link between
management training of small business owner-managers and business performance.
This is despite owner-managers recognising the importance of developing and
maintaining management skills (Loan-Clarke et al., 1999; Smith & Whittaker, 1996).

LITERATURE REVIEW
While it has been found that small business owner-managers are reluctant to
participate in formal training and development, they do acknowledge that human
resource management is important to their businesses (Webster, Walker, and Brown,
2005). Unfortunately, there are few empirical studies on the relationship between
small businesses and human resource management practices. One of the challenges
facing small and medium enterprise (SME) researchers according to Mazzarol (2004,
p.1) is that the majority of small firms are led by owner-managers who are
strategically myopic and "lack the long term vision that is required for owner
managers to identify the future direction of their business". It is therefore important to
know why many small business owner-managers do not embrace lifelong learning for
their business and personal development.

Current training practices of small businesses

The training needs of small businesses have been widely researched (Billett, 2001;
Gibb, 1997; Matlay, 2000; Storey, 2004; Storey and Westhead, 1997; Webster,
Walker, and Brown, 2005) but significant gaps in the knowledge still exist. For
example, the literature shows that despite the importance of small businesses to the
economy, little attention has been given to the effectiveness of training programs for
these businesses (Huang, 2001) or to the study of other training and development
practices (Chandler and McEvoy, 2000; Heneman, Tansky, and Camp, 2000; Kotey
and Sheridan, 2004).

Small business training and development can be complex and resource intensive
(Billett, 2001; Westhead and Storey, 1996). In fact, Billett (2001) has found that the
real price of training is higher in small firms than large businesses. This is then
compounded by the fact that most businesses, but especially small businesses, are
time poor (Beresford and Saunders, 2005; Billett, 2001; Gibb, 1997; Webster, Walker,
and Brown, 2005) which leads to the widespread misconception that small business is
too busy to train.

In recent years, increased attention has been given to human resource management
(HRM) practices in small businesses (de Kok and Uhlaner, 2001; Mazzaroll, 2004).
Whilst this is a step in the right direction the reality is that small businesses are faced
with many challenges in their attempt to develop and implement training and HRM
practices and procedures. Challenges identified include: time and resources (Klass,
McClendon, and Gainey, 2000); firm size (Heneman, Tansky, and Camp, 2000); and
cost (Arthur, 1995). More significantly, according to Klass, McClendon and Gainey

(2000) small businesses may not recognise the complexity of human resource training
and expertise, and therefore rely on what they have vicariously learnt from previous
work experience.

Small businesses, training and human resource management

Although some owner-managers of small businesses consider their human resource
practices and problems as a high priority (Hornsby and Kuratko, 1990) and
acknowledge that they can play a significant role in developing competitive
advantage, one of the biggest difficulties faced by them is gaining competitive edge
from the improved capability of people (Ulrich and Lake, 1990, p.40). Reid and
Adams (2001) support the concept that employees should be regarded as valuable
assets and that there should be greater emphasis on commitment, adaptability and
recognition of employees in small businesses.

One opportunity for small business to demonstrate these values is by providing

employees with training that is of benefit to both the employer in the first instance but
is of equal value to the employee as they will have acquired a new competency. In
return, overall competitive advantage may be realised, however, before this can occur,
the owner-manager may be presented with two additional challenges. First, more time
and resources may need to be invested in order to implement what has been learned in
the training. Second, and perhaps of more concern to small business, are the
challenges associated with the retention of employees with increased skills and
knowledge (Barrett and Mayson, 2004; Klass et al., 2000; McElwee and Warren,
2000). This second issue can cancel out any gains for the employer and also the

possibility of increasing the expectation on the part of the employee of more training
and training being seen as a right rather than at the benevolence of the employer.

Decision making about training participation

When owner-managers are confronted with the decision to take time off themselves or
release another staff member to train, several issues are often considered including:
training relevance, delivery method, small business sector focus, cost, timing, and the
training environment. Each of these is important but arguably the delivery method
will have the greatest impact on the final decision and the outcome of the training.

Adult learning, "the process of adults gaining knowledge and expertise" (Knowles,
Holton, and Swanson, 2005, p.174), is central to the context of training and
development for small businesses. This training method is compatible with the
humanistic workplaces where individuals have control over their own learning and it
also acknowledges the need for organisational performance. Knowles et al., (2005)
confirmed that adults have three key need to know factors prior to learning which
are; (a) how the learning will be conducted, (b) what will be learned and (c) why it
will be valuable. It would thus appear that when training is offered that can provide
appropriate responses to these questions, small business owner-managers would be
more likely to respond positively as, not only will they be aware of what is in it for
them but also, they would be able to use this knowledge to improve their business
performance.

Strategic human resource management and small businesses

Strategic management is rare in most small businesses due to the just-in-time nature
of commerce today. Jennings and Beaver (1997, p. 63) suggest that "the root cause of
either small business failure or poor performance is almost invariably a lack of
management attention to strategic issues." Whether small business owner-managers
respond to training needs in a strategic way is debateable and little is known about
this area (Bartram, 2005). In addition, according to Marlow (2000) little is known
about how, or whether, small business owners use their own, or their teams,
management skills and experiences, as a strategic part of developing the business. In
most cases, there is little evidence of businesses translating human resource awareness
into action, and therefore human resource management strategies are not generated.

Barrett and Mayson (2004) have suggested that although the literature on strategic
HRM is more commonly associated with large firms, it may be useful to extrapolate
this in order to better understand the role of HRM training in small businesses. One
of the most significant differences between large and small organisations is that in
large firms, HRM applications tend to be based on formal management procedures
whereas similar applications in small businesses tend to be informal (Barrett and
Mayson, 2004; Hornsby and Kuratko, 1990; Kotey and Slade, 2005; Marlow, 2000;
Mazzarol, 2003). Thus, many small businesses trying to balance formal HRM policies
and practices (used by larger firms), with the informal culture of smaller firms, can
get into difficulties with this strategy, due to the resource constraints of small
businesses (Cassell et al., 2002).

For example, small businesses are often hardest hit when there is competition for new
staff and in retaining existing skilled staff. This is because of factors such as; larger
businesses having the ability to pay more and offer financial and non financial
incentives that are difficult for small businesses to match; uncertainty regarding
continuous workflow; perceived difficulty of finding appropriate staff; ability to
manage staff and not knowing how to terminate unsuitable staff (Barrett and Mayson,
2004; Klass et al., 2000; McElwee and Warren, 2000; Storey, 2004). All of these
issues have the potential to be an additional burden on small business if the ownermanager is not skilled in human resource management. Because of these issues there
is a the need for smaller firms to develop effective HRM practices (Audretsch and
Thurik, 2001).

One of the most significant issues emerging from the current literature concerns the
growth aspirations of the small business. According to Mazzarol (2003) and Fraza
(1998) the faster the growth, the more likely the business is to experience human
resource problems and one of the main problems is finding and retaining high quality
employees. Mazzarol (2003) warns that as a firm grows and the number of employees
increases, so the complexity of human resource management intensifies and therefore,
developing formal human resource policies and practices becomes of greater
importance to the long term success of the small enterprise. Further, research has
shown that the informal nature of human resource management in small businesses
contributes to difficulties in recruiting and retaining employees (Barrett and Mayson,
2004).

The literature is showing a clear need for small business to participate in human
resource management training to assist with success and growth. Yet the literature is
also suggesting that small businesses are reluctant to participate in formal training or
learning activities. In addition, there is a lack of empirical research and evaluation of
training specifically relating to human resource management for small businesses.
The results presented here are an evaluation of the competencies learnt from a training
program developed and delivered specifically for small businesses on the topic of
human resource management.

METHODOLOGY
Aim
The aim of the research was to examine the relationship between small business
owner-managers, their current knowledge of human resource management and the
value they placed on the training they received. The study therefore measured, both
before and after the training program, the knowledge, experiences, attitudes and needs
of SMEs from the small business owner-manager perspective.

Program Design
The workshop series was designed to assist and support small business ownermanagers who were seeking to develop better human resource management skills by
increasing their general awareness of issues relating to: recruiting, selecting, retaining,
training and managing employees. One of the critical success elements of the
workshops was the interactive opportunities provided to the participants to engage
with each other and be able to relate their own personal experiences in dealing with

10

human resource issues. This interaction in a non threatening environment is a key

adult learning requirement.

The workshops were held in venues specifically selected, both in terms of location
and character, as appropriate for small business training, in that they were in situ and
utilised local facilities, as opposed to traditional educational establishments. This was
arranged to heighten the focus of the training as being relevant to small business and
to demonstrate that the deliverers of the training understood the needs of small
businesses. The two locations were chosen because of their close proximity to the
owners operating base to reduce travelling distances, which would take precious time
away from the business. Marketing of the workshops also emphasised the small
business focus and an adult learning interactive approach that would provide
opportunities for networking and the sharing of experiences.

The time of day is also important to small business owner-managers who are often
unwilling to participate in training during the busy periods in their day. Therefore two
session times, a lunchtime and an evening session per location were made available
for each workshop. This allowed the businesses to choose an appropriate time for
each workshop and attend the later session if work commitments had meant they had
to miss the earlier session.

For similar reasons the sessions were also conducted over a fortnightly period. This
structure was designed to limit the amount of time the participants had to commit to
training, and also provided important opportunities for participants to reflect and put
the knowledge gained during each session into practice where possible. The overall

11

design was selected in order to facilitate expansion in the participant's businesses by

delivering current and targeted human resource skills that would help them when they
employed their first staff or when employing additional staff.

Research design
The research was conducted in three stages. Prior to the commencement of the
program, each participant was interviewed by telephone.

The aim of the first

interview was to determine current human resource issues as identified by the ownermanagers. In the second stage, participants attended six fortnightly human resource
training workshops and were required to complete an evaluation after each session.
The final stage involved a follow-up interview with all of the participants
approximately 4 weeks after the completion of the program. The purpose of the
follow-up interview was to give participants the opportunity to provide feedback on
the workshop sessions, to determine their learning outcomes, and to identify future
training needs.

Sample
The program was conducted with financial assistance from a federal government
agency and a local government authority, which enabled the workshops to be
conducted in one discrete geographical area in metropolitan Western Australia. This
was the first time that such a program had been conducted in this area using this
particular methodology for this specific topic so there was no way of knowing exactly
how many small business owners would seek to do the training. Initial expressions of
interest were solicited via local newspaper advertisements and through local chambers
of commerce and business associations. All enquiries were screened using the broad

12

criteria of having been in business for more than 2 years and either having, or about to
employ staff. This was to ensure that the participants had some common
understanding of the general process of managing a small business.

In total 80 small business owners completed the 6 session program. The participants
covered most industry categories and ranged in the size of their businesses from no
employees (but looking to recruit within the following 3 months) to businesses
employing over 20 staff, with the mean number of staff being 8. There were more
women than men (65%: 35%) which possibly indicates that human resources is still
seen as something of a soft management skill.

RESULTS AND DISCUSSION

Before the program
The pre program interviews gained background information on the participants and
assessed their current human resource competencies and their current HR situation in
their business and ascertained why they wanted to participate in the workshops. Their
current HR competencies were important to know in order to be able to structure the
workshops to cater for their requirements. The interviews revealed that the majority of
participants had little or no prior experience or skills in formal human resource
management. Only one participant, who was studying human resource management at
the time of the study, had any formal qualifications in human resource management or
a related discipline.

For the majority of small business owner-managers, the main reason for participating
in the workshops was to gain general skills in dealing with staff, due to having

13

experienced staffing issues in the past. As had already been revealed in the
literature, most small business do not operate in a strategic way and therefore the
assumption was made that the information the participants would be seeking would be
operational. It should also be noted here that many of the small business ownermanagers regarded employees as staff and the term human resources was a phrase
used by big business not small businesses. Most staffing concerns were the result of a
reactive rather than a proactive issue.
Some specific skills were also mentioned such as a better understanding of the
recruitment processes and the legal requirements that are necessary for human
resource management and dismissal procedures. Other participants expressed an
interest in skills related to retaining good employees, and motivating employees on a
daily basis.

Dealing with current staff problems

Although the majority of participants had few current staffing problems there
continued to be concern about the issues outlined above. The participants stated these
were persistent and recurring themes for small business staff management. Generally
the participants did not know how to deal with these recurring problems.

While verbal one-on-one communication appeared to be the most commonly used

method for dealing with these ingrained problems and issues in the workplace, a
tendency to 'put up' with the problems and hope they 'go away was also used as a
strategy by some small business owner-managers. Obtaining assistance from external
sources was not mentioned as an option for dealing with these issues. The use of these
strategies and the continuing problems with these issues demonstrate both the practice

14

of informal human resource methods by small business and the strong dependence on
the relationship between the employer and the employee to resolve issues in the
workplace.

Another example of the informal methods used in small business was that, aside from
a general welcome package in some instances being provided to new employees, no
formal staff policies relating to the HR issues were provided to employees.

Advantages of doing the program

Participants saw the following advantages in participation: (a) gaining a better
understanding of human resource management, training, and related issues, (b)
gaining skills so that they could recruit, interview, manage, and retain staff
confidently, and, when needed, dismiss employees using correct procedures and (c)
networking and talking to other people about their small business and human resource
management related experiences.

After program completion

At the completion of the program, participants were interviewed again by telephone.
The purpose of this post interview was to determine the effectiveness of the training
program and to identify the need for future training opportunities. Overall all
participants acknowledged that they were now more informed and confident about
human resource issues and the daily management of human resource operations of
their small business. For example, one participant noted that,

15

This program was a whole lot of value. It was a valuable experience, it was
facilitated well, and it really opened up my eyes to the world of staffing.

The increased confidence and knowledge was demonstrated in the way the
participants openly discussed many of the aspects of the workshops and could see
how important it was to start at the beginning of the HRM process, that is, by
recruiting the right person in the first instance. Many participants expressed similar
views as the business owner below:

I now know how to identify suitable candidates for my business. I feel

confident that I will be able to find the best person for the job, whereas
before it was a bit hit and miss and I was always rushing the process
as being a retail business there was always the issue of having to have
someone, anyone really, to be in the shop.

What was of initial interest to most participants was the difficult issue of terminating
staff. During the post interviews many expressed a much greater sense of
understanding and therefore control over the situation having worked though
scenarios in the workshops. As one participant stated:

Ive been a boss for 15 years and having to sack someone is the worst
feeling, even when you know that they have done something wrong. I now
feel I know how to put some strategies into place, like addressing issues
when they first come up and not let things drift, and putting things in
writing so that giving someone the flick is the last resort.

16

Another important issue raised by the participants was that the structure and time
format of the course allowed the majority of the participants the opportunity both to
reflect on their learning between sessions and to put the knowledge they had gained
into the everyday practice of their business. For example, following the first session
on the value of employees, several participants stated they now recognised the
importance of developing a values statement by reflecting on what they had learnt and
then constructing their own. In a similar manner, following the second session on
appropriate recruitment and selection, several participants had implemented their
learning by starting to write job descriptions and to develop job advertisements. A
further workshop was on retaining and motivating staff and one participant
acknowledged that:

With this new information Ive been given, I can now sit down with my
employees and re-write our procedures and policies, whereas before I
did it the way I thought things should be done, without consulting the
people actually doing the jobs. I guess I didnt place much value on
their potential contribution.

In this context, transferring new knowledge into practice was encouraged by the
fortnightly format and the two hour time limit of the training sessions. Participants
also had the opportunity to ask questions the following week and it was
acknowledged that this follow through approach was beneficial and suitable for their
training needs. For example, one participant stated:

17

The information we received was concise and well structured. The format
was suitable because I didnt want this important information all crammed
into one or two days. I needed time to reflect. Also my business is
constant, there are lots of things I would like to do but the reality is there
are also things that I have to do, so the structure gave me some time to
process the information.

In regard to the two hour session, all participants agreed that this was long enough
and did not take too much time away from their business. The time period also
facilitated enough time to gain an understanding of each topic, without being too
overloaded with information.

All participants acknowledged that they had gained an overall understanding of the
human resource issues that affect and influence their day to day operations.
Participants also acknowledged that discussing the issues in peer groups and
recognising that everyone has similar problems was a key learning point. The legal
aspects of business, in particular employee termination were keys issues that many
participants stated they were keen to participate in further training in. Other
participants said that they would like to attend refresher courses on similar material,
thus supporting the argument that small business is not too busy to train.

The results have demonstrated that small business owner-managers who recognise
and act on their need for further training, and in this instance the topic was human
resource management, are able to make significant gains in both their knowledge and
confidence to deal with operational issues in their business. In achieving these

18

outcomes the research has highlighted the need for small business owners to recognise
and act upon their needs for management training in general and to have a broader
understanding of their importance.

CONCLUSION
The key finding of the research was that given certain conditions and business
requirements, small business owner-managers are not too busy to train. Two factors
appear to influence the small business owner-managers attitudes toward training and
development, which are the relevance of the training and the delivery process. Small
business owner-managers will participate in training opportunities if they are directly
applicable to current situations in their business, and if the delivery process is
carefully structured in terms of location, time of day, and length of session. This
confirms the work by Loan-Clarke et al., (1999, p.306) who after surveying 551 UK
small businesses and found that "small businesses not only recognise the potential
benefits of MTD [management training and development] but are prepared to support
their belief with cash".

If there is a down side to this particular type of skills development training for small
businesses, it is that the process was found to be most often an operational rather than
a strategic decision by the owner-managers to become involved.

This confirms

existing research that small business by nature does not have long term strategic plans
in place to manage their resources.

To enhance participation in training by small business it is suggested that the location

of the training venue needs to be in close proximity to the businesses operating base,

19

as travelling long distances inevitably takes precious time away from the business. In
addition, the time of day is also important. Business owner-managers are unwilling to
participate in training if it removes them from their business during the busy periods
in their day. This recognition was a factor in structuring the sessions over a fortnightly
period. This structure was designed to limit the amount of time the owner-managers
were required to commit to participate in the training, and also provided important
opportunities for participants to put the knowledge gained during each session into
practice. They were then able to come to the following session with any questions or
feedback. This structure was integral to the quality of the learning process, especially
for adult learners and when providing for the many small businesses who are resource
poor.

It is acknowledged that this particular delivery method is neither new nor

revolutionary and is in fact what advocates of just-in-time training for small business
have been arguing for. However, the Vocational Educational and Training sector in
Australia has been slow to pick up on this and therefore it is hoped that this piece of
research adds more evidence to the just-in-time delivery argument. The fact that 80
small businesses completed this program, demonstrates that there is willingness on the
part of small business owner-managers to learn and to implement new ways of
managing business, so long as certain conditions exist.

In relation to the actual content of this particular program, the initial findings were
that these small business owner-managers had recognised that they had little
knowledge of human resource issues prior to the training. They initially expressed a
strong need to learn more about recruiting, retaining and dismissing staff using correct

20

procedures. However, following the workshops, all participants acknowledged that

they felt more competent and informed about human resource issues, particularly in
recruitment and selection, retaining good staff, legal requirements and procedures, job
advertisements, motivating employees and developing vision statements for their
small business. These results highlight the need for small business owners and their
staff to recognise their human resource training needs, and to have a broader
understanding of the importance of their training and development needs.

This paper provides much needed evidence of the capacity of appropriate training to
provide positive outcomes for small business, in this instance in relation to human
resource management. The next stage, currently being undertaken, is a longitudinal
study on this particular cohort, to determine whether any longer term behavioural
changes on the part of owner-managers who participate in human resource training
occur and whether or not this type of training is able to assist small businesses in
regard to operational performance.

21

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