This study explores the legitimacy mechanisms employed by entrepreneurial firms to attract and retain talent, addressing a critical challenge in talent management. The research aims to elucidate how these firms overcome resource constraints and lack of visibility to compete in the labor market. We conducted 20 entrepreneurs’ interviews. The findings identify seven distinct legitimacy mechanisms grouped into three categories: professional credibility and growth alignment, organizational reliability and fairness, and relational cohesion and social legitimacy. Key mechanisms include emphasizing mutual success, continuous training, transparent resource management, flexible work policies, and social impact initiatives. These mechanisms are dynamic, fluid, and adaptable, reflecting the evolving needs of employees and the competitive environment. The study contributes to theoretical understanding of legitimacy in entrepreneurship and offers practical insights on talent management. This research establishes a critical challenge for entrepreneurs: overcoming the liability of newness to compete in the labor market.
Palomino-Calderon et al. (Sun,) studied this question.