HRM in Small & Medium Sized Enterprises

HRM in Small & Medium Sized Enterprises

Human Resource Management is a collection of procedures, methods, and tasks used by businesses to hire, manage, train, and retain staff members. It also includes putting rules into place to guarantee worker rights and adherence to relevant legal requirements. However, knowledge has developed skewed, giving the population of small and medium-sized businesses (SMEs) far less consideration (Hayton, 2003; McClean & Collins, 2019; Sheehan, 2014; Wapshott & Mallett, 2016).

The HRM was told to focus largely on SMEs, or small and medium enterprises, because SMEs frequently have fewer resources and tighter budgets. The HRM objectives are universal, but the means by which they are accomplished differ from one company to the next due to variables including size and available resources. Although all businesses aim to achieve the same things through HRM, the specific ways in which they do it differ based on factors like size and resources.

HR departments with experts in a variety of roles are necessary for large companies. HRM is typically the responsibility of one to five employees in smaller businesses. Small firm HR departments typically lack the resources that larger organizations have at their disposal. They must accomplish more with less, and HR managers must be a little resourceful in selecting tools and tactics that fit their budget.

For instance, in order to keep overhead costs down, payroll may be included in HR responsibilities in small to medium-sized businesses; but, larger companies are likely to have a separate accounting/payroll department.

Applicability of HRM in SMEs

Managing people as a leader in an organization, the work is in some way related to human resources. Regardless of the structure of the HR department, there are some universal best practices that are advantageous to all businesses.

1. Set a Strategic Goal

If a company wants to succeed, it must have strategic goals. They guarantee that everyone is working toward the same goal by giving them focus and direction. The same concept applies to SME industry as well.

2. Develop and Support Company Values

A small team has the advantage of making it simpler to gather employee input on these values. Employee engagement and commitment to the organization's mission can increase significantly when this process is opened up. Some of the major key values could be described as follows;

• Innovation
• Integrity
• Transparency
• Customer focus
• Accountability
• Diversity & Inclusion

The above serve as the cornerstone of an organization's identity and culture, influencing how it conducts operations, engages with stakeholders, and accomplishes its objectives.

3. Build A Robust Performance Management Process

Employees value (excellent) performance management regardless of the size of the team since it lets them see clearly what they have accomplished and what they still need to improve. There is more to this than the yearly performance evaluation.

In order to enable managers to take on more of the role of coaches and mentors, it is ideal to establish a continuous performance management process with frequent feedback. Incorporating career pathing and growth into this is also crucial.

4. Invest in Training and Development

Performance management and training and development (T&D) are closely related. Due to a shortage of funding, SMEs are less inclined to invest in T&D. Employees in startups and smaller businesses, in particular, may be required to fulfill management and other tasks without any prior training.

Even if it's merely time for workers to educate themselves, allocating resources for T&D helps them to perform their jobs more efficiently and become more motivated. Utilize the funds to collaborate with professionals using outside training resources or coaching platforms.

5. Implement Technology Enhancements

When it comes to increasing productivity for small and medium-sized businesses, the importance of technology and automation cannot be emphasized. One of the most significant benefits that technology offers SMEs is the capacity to optimize workflows and lessen reliance on human labor, which significantly boosts total productivity. Adopting new technologies not only increases productivity right away, but it also puts SMEs in a position to succeed in an increasingly digital business environment in the future by being resilient, adaptable, and competitive.

Conclusion

In conclusion, the success of SMEs depends on efficient HR management. SMEs must make investments in their employees and give them the tools they require to realize their full potential if they are to succeed in the long run. SMEs may foster a productive workplace that promotes growth and development, raises employee morale, and lowers turnover rates by putting in place thorough training programs, succession planning procedures, and other tactics. SMEs may establish a successful culture that benefits the entire company with the correct HR tactics.

References;

A quarter-century review of HRM in small and medium-sized enterprises: Capturing what we know, exploring where we need to go (2020) [Online]. Available at: https://onlinelibrary.wiley.com/doi/full/10.1002/hrm.22010. Accessed on 25th October 2024

Top 5 Technology Solutions Every SME Should Implement to Boost Productivity (204) [Online]. Available at: https://startup-house.com/blog/Top-5-Technology-Solutions-smes. Accessed on 24^th October 2024