Impacting Human Resource Quality on Business Operation Performance: A Case Study at Small and Medium Enterprises in Vietnam

Abstract

In Vietnam, small and medium enterprises account for 95% of the total enterprises and are considered essential to economic restructuring, industrialization, and modernization. The development of this type of enterprise makes a necessary contribution to gross national income and economic growth and solves many social problems. However, the competitiveness of this business sector is still minimal, mainly due to the low quality of human resources. Thus, the article aims to explore the key factors affecting human resource quality and its impact on business operation performance. The article applied structural equation modeling and data surveying from 900 employees working for SMEs. Finally, seven factors affected the human resource quality and its impact on business operation performance with a level of 1%. The authors proposed managerial implications to enhance human resource quality for many sides: managers, business leaders, local authorities, and the Government.