The SME sector is playing an important role in consolidating the country’s economic progress and international standing. This sector has been instrumental in creating millions of jobs, promoting industrial development in rural areas, and producing a variety of products with limited investment capital.
Going forward, small and medium-sized enterprises (SMEs) will need continuous support from the government to achieve their full potential. At the same time, SMEs also need to work on their internal structures, processes and practices to continue their growth journey.
However, small and medium-sized businesses are still grappling with a number of people- and culture-related challenges that HR managers need to address.
Characteristics of SME enterprises
Small and medium-sized enterprises are considered “job creation machines”, creating motivation for growth. These businesses can adapt quickly to changes in the economy thanks to their small and medium scale.
Small and medium-sized enterprises can be easily established because they do not require much capital, have a small number of employees, and have low infrastructure investment costs. But because of that ease, tasks such as investing in effective human resource management are often not focused on by businesses.
Small and medium-sized enterprise administrators often cover and manage most aspects of business operations. Therefore, administrators in small and medium enterprises often have low management skills and lack specialized skills to be able to manage the business effectively.
Characteristics of SME enterprises
Challenges of small and medium enterprises
No investment in human resources department
Small and medium-sized businesses often do not pay attention to building a human resources department. Without a human resources department, implementing people-related processes and policies will be very difficult. There can be many reasons for the absence or lack of human resources departments in small and medium enterprises.
First and foremost are budget constraints – SMEs mostly work with tight budgets and focus more on growth and scale aspects for people and related issues. related to culture. Having a fully functioning HR department can be considered an expensive activity for a small business.
Human resources is not given too much attention in SME businesses
Second, many business founders feel that their teams are currently too small for a complex HR system. However, it is advisable to build an HR system from the beginning that can carry out various people-related activities such as talent management, engagement, policies related to compensation and benefits.
Recruitment
Recruiting the right talent has emerged as one of the top challenges HR faces in their day-to-day operations. Fierce competition, a limited pool of qualified candidates, and sometimes the inability to offer competitive salaries are some of the top recruiting drawbacks.
Additionally, inadequate branding and associated risks make these businesses less attractive than larger, more established organizations. HR managers need to fight to create a strong middle management class, especially in urban areas where competition is fierce.
It is difficult for SME businesses to attract talented people with low salaries
Training and developing
Businesses need to have a skilled workforce. Large organizations are making a concerted effort to evaluate and enhance their talent by hiring experts to evaluate and provide various training programs.
However, for small and medium-sized businesses, relying on external suppliers is not always feasible mainly due to budget constraints. Therefore, they mainly conduct on-the-job or on-the-job training programs that may or may not be effective.
Value of the business
Another important challenge that HR managers face in small and medium-sized businesses is ensuring that the values of the business are communicated and aligned with all employees. Misalignment often occurs when people from the outside bring different values that directly conflict with the business and both parties fail to learn and embrace what is best for the business. In such a challenging situation, HR needs to play a vital role by creating transparent and two-way communication between both parties that can bridge the gap.
Ensure business values are communicated to employees
Human resources solutions for small and medium enterprises
With a budget suitable for small and medium businesses, human resource management software is the optimal and most effective solution. ezHR9 human resources software is a technology solution that helps businesses manage and automate their human resources activities.
Human resources software for small and medium businesses ezHR9 provides all the functions businesses need to build a human resources management department such as employee information management, timekeeping, payroll, recruitment and training. ,… helps small and medium businesses not have to invest too much money in a complex human resources system. Recruitment and training processes for employees in the enterprise are managed and automated through software functions to help ensure the quality of human resources.
ezHR9 software login interface for ezHR9 businesses
The portal that the software provides is an effective communication tool between businesses and the workforce. The HR department can use the portal to communicate to all employees about the business values, collect feedback to change the values and capture what is best for the business.
