Abstract

Human resources management (HRM) is one of the most crucial functions for small and medium enterprises (SMEs) to achieve competitive advantage and sustainable growth. Although SMEs play a critical role in the national economy, they face several unique challenges in HRM, especially in terms of limited resources, organizational flexibility, and external regulatory pressures. The present review examines specific HRM challenges of SMEs in Saudi Arabia within the context of socio-economic changes initiated by Vision 2030. Recruitment and talent acquisition form a major issue as SMEs face challenges to attract and retain skillful employees competing with large enterprises. Moreover, poor training and development structures create barriers to the productive and innovative performances of employees. High employee turnover also adds further complexity to stability in the workforce, affecting productivity. Performance management, along with the implementation of technology-based human resources (HR) solutions, often lags due to budget and strategy constraints. This review proposes a holistic roadmap to alleviate the aforementioned bottlenecks, along with the knowledge of digital HR solutions, capacity-building programs, and strategic workforce planning through initiatives such as skills development and talent mobility. These initiatives have the potential to support SMEs in achieving the priorities of Vision 2030 by creating a pool of local talent that could provide services for SMEs. Aligning HRM strategies with national development goals, as well as using government incentives and private sector partnerships to mitigate the challenges of resource constraints, is important in this roadmap. With such an adaptive and strategic approach in HRM, SMEs in Saudi Arabia are going to become more resilient and competitive in an ever-changing business environment. The insights developed in this review contribute to the understanding of HRM complexities in emerging markets and provide actionable recommendations for policymakers, SME owners, and HR practitioners.