Linking Strategic HRM and talent management for competitive advantage in Cape Town Retail SMEs

Orientation: The retail sector is a foundation of the South African economy, yet its small and medium enterprises (SMEs) face major human resource challenges. This study investigates the relationship between strategic human resource management (SHRM) and talent management (TM) as a basis of competitive advantage for these corporations.

Research purpose: This research aimed to provide firsthand evidence on how SHRM practices impact TM and, consequently, improve the competitiveness of retail SMEs in Cape Town.

Motivation for the study: Regardless of the acknowledged importance of human capital, various SMEs operate with casual, ad hoc HR practices. Comprehension of the strategic integration of HR can give these corporations a viable path to better performance and sustainability.

Research approach/design and method: A quantitative, cross-sectional survey design was employed. A structured questionnaire was administered to 47 owners and managers of retail SMEs in Cape Town. Data were analysed using descriptive statistics, correlation, and regression analysis.

Main findings: The study found that 65% of respondent businesses viewed their people as a strategic resource. A moderate positive correlation (r = 0.5) was identified between SHRM and TM. Furthermore, regression analysis indicated that SHRM is a significant predictor (β = 0.500, p < 0.001) of positive organisational outcomes, while TM’s direct influence was not statistically significant in the model.

Practical/managerial implications: Retail SMEs should formalise and align their HR practices with strategic business objectives. Prioritising SHRM can create a foundation for effective talent management, leading to higher employee retention, productivity, and competitive advantage.

Contribution/value-add: This study addresses a critical gap in literature by focusing on the SHRM-TM relationship within the under-researched context of South African retail SMEs, offering context-specific insights for both practitioners and scholars.