Human Resources in SME Sector

Human Resources in SME Sector

The SME sector is focussed on survivability and anything that can help a company to continue to exist. Maybe the SME sector has always been focussed primarily on how to survive with few exceptions to this. The question is what can HR do to assist the survival of an SME Company and even beyond survival growth?

There aren’t a fixed number of HR strategies to solve all SME company problems but rather variations of HR practices which should be applied to a company depending on its needs based on the environment it operates in. A diagnose should take place to understand where the company stands and what HR practises could be helpful in tackling the issues at hand. If a good diagnosis and implementation are completed then HR can help to strengthen a SME company’s ability to survive and develop.

The question of HR as a strategic partner in the SME sector is irrelevant as most plans are short term and don’t have long term strategic implications. Good SMEs operate on the basis of entrepreneurship and flexibility and companies will easily change their approach to issues in order to find the right way forward. When dealing with SMEs you will very often see fire fighting without knowing what exactly is causing the problems in the first place. Taking some time to understand what exactly is happening is crucial in order to reach a positive conclusion.

The basis for any HR approach in SMEs is a sound legal footing. There are too many legal requirements for companies to ignore this. Employment legislation, through the EU, has increased dramatically in the last number of years. However the NERA reports make it clear that a lot of companies do not comply with basic legal requirements and this in itself can jeopardise the future of any company. It is foolish to think you can ignore this.

When assisting SMEs with their survival there are a number of HR practices which can be helpful, such as: –

  • Staff Selection – too often staff selection in the SME sector is done unprofessionally and ends up being a stop gap solution to a problem. Selection criteria is seldom established or adhered to. Furthermore training on how to interview candidates is essential for successfully selecting new excellent employees. Getting the right new employee can save money and getting employees with the right attitude is essential.
  • Staff Development – in difficult times staff development is often overlooked. However if you want to do more with less then you need to develop the fewer employees to do more. Even the best employees will not be able to perform new tasks if not properly instructed. For instance employees who need to find better and faster ways to perform tasks need to be instructed on how to do this.
  • Employee Engagement – Employee engagement is also important for small companies. It can make a huge difference having the right culture and attractiveness. Small companies even have an advantage over bigger companies as people should find it easier to understand what the company is about and how to relate to it. However in SMEs personalities can make employee engagement difficult.
  • Performance Management – SME companies need to have a clear picture of who is helping them to achieve their goals and who isn’t. Staff need clear Key Performance Indicators which will be evaluated. Employees deserve feedback on how they are performing in order to improve their performance. Repeated underperformance needs to be tackled and resolved or else it may take too much time and effort to manage.

SMEs are focussed on survivability especially in these days. We have to remember that the SME sector is the backbone of any economy. The right flexible HR approach can give the small and medium size companies the support they need in difficult times in order to survive and create employment.

By | November 19th, 2012|News|

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