Small and medium‐sized enterprises (SMEs) represent the backbone of the global economy and therefore are an integral part of the HRD research agenda. The HRD literature has predominantly focused on both large firms and formal practices, and as a consequence HRD in SMEs is considered deficient. In this article, we question these assumptions by invoking Mingers’ (2000) “four aspects of being critical” framework. We argue that the current knowledge base is flawed as research has not moved beyond the deficiency model to explore, accommodate, and explain HRD in the SME setting. The role of SME context and informality is insufficiently conceptualized in the literature. We make theoretical and methodological recommendations to advance HRD research.