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Wage and hours
During the nineties, Mitra and Pingali (1999) acknowledged that small businesses had an
advantage of cheap labour, which may be understood as a lower pay for workers. Van Praag
and Versloot (2007) provided ten articles examining the quality of jobs in SMEs. One of
them was by Frey and Benz (2003) who showed the difference between smaller and larger
firm employees’ satisfaction levels in the UK, Switzerland and Western Germany. This and
another study performed by Clark and Osward (1996) found that employees in SMEs were
more satisfied than others. Contrary, many studies focusing on either wages (Troske, 1999),
benefits (Litwin & Phan, 2013) or productivity-related pay (Cowling, 2001) revealed that
small firm employees were worse-off than workers in larger firms. However, as Sengupta et
al. (2009) showed, responses varied between industries.
Those factors may be even greater in HGFs. Penrose’s (1959) theory viewed firms as a
collection of resources, which were tightened with firm performance. Researchers (such as
McKelvie and Wiklund, 2010) were interested in the factors enhancing HGFs to sustain
growth. Eisenhardt and Schoonhoven (1990) showed that the main factor was a high skilled
management team. Similarly, Wennberg (2009) hypothesized that HGFs might create wellpaid
jobs to attract rich human capital. Contrary, since the nineties, there have been
continued speculations about HGFs employees being low skilled (Lepak and Snell, 1999) so
that they may reduce costs. The recent Swedish study (A. Coad et al., 2014) gave insights on
those matters. They concluded that ‘HGFs are more likely to employ young people, poorly
educated workers, immigrants, and individuals who experienced longer unemployment
periods’ ( 293), which may show the type of low paid jobs HGFs created.
Security
Despite wage and hours, job security may be necessary to providing high-quality jobs (see
Figure 3). Gertler and Gilchrist (2013) and Sharpe (1994) found that small firms were more
responsive to financial and monetary policy shocks. That may decrease the quality of jobs
created. Empirical findings contradicted with each other by providing either neutral
(Smallbone et al., 2012; 2012a; Coad et al., 2013) or negative effects (Cowling et al., 2015;
Taylor & Bradley, 1994) of recessions on small firms. However, it was agreed that across the
recessions, primary industries, such as agriculture, food and oil, were less vulnerable (Taylor
& Bradley, 1994). Similarly, the location and environmental context of SMEs were critical in
its resilience to the recession (Dixon, 2007).
Contrary, it may be argued that small firms may strive during the recession because they
were, according to Reid (2007), more flexible in adjusting resources, processes, products
and prices. However, Butcher and Bursnall (2013) showed that crisis hit new workplace
creations particularly strongly, especially among small firms. The recent study by Cowling et
al. (2015) added that although SMEs were affected during the recession, they recovered
relatively fast. Furthermore, Smallbone et al. (2012) showed that firm’s adaptation to
recession influenced its performance during and after the recession.
In addition, Evans and Leighton (1990) and Storey (1991) developed theory suggesting that
increasing levels of unemployment such as during recession reduced the prospects for
finding paid employment. Therefore, more people chose to create micro firms. This was
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