When big organizations go on a rampage, small ones have to think smart .

This is the wisdom for Indias small and medium enterprises (SMEs)hat fail to keep pace with the growth juggernaut. Amidst lot of competition within SMEs, it becomes very important for the SMEs to benchmark various processes in order to remain competitive within the marketplace and ensure they can benefit from what their competitors are doing to stay one step ahead of the game. Human resources are one of the most essential growth indicators for these organizations. Growth-hungry large companies are scouring the market for human resources (HR), leaving only crumbs for SMEs who can never outpay the big ones when it comes to salaries. Moreover, typical about micro firms is the predominantly horizontal structure that one wants to preserve. The employees that surround the entrepreneur are mostly a tight group that communicates informally. That is why the challenge an entrepreneur is faced with in this phase is directly linked to maintaining the climate of participation unique in a micro firm. When the organization grows, it becomes more difficult to involve all employees equally in operational decisions. Moreover, with an ever growing team it becomes extremely difficult for the entrepreneur to keep the close partnership with every employee. The creative, intuitive approach that was fruitful in the start-up phase appears to become an obstacle for a number of employees. There is a lack of formalization, structure and clarity when thinking of performance, training or reward management. More specifically, employees report a need for a transparent training and compensation policy and a standardized introduction procedure for new employees. Employees miss a uniform strategy and functional organizational structure. The lack of in place and streamlined HR functions in these organizations come as a weakness when all the efforts invested in building a team become fruitless because of high attrition rates. There can be several reasons to this such as dissatisfaction with pay, HR policies and practices, lack of hygiene factors, employee loyalty issues, and the like. Some HR Issues in SMEs are discussed below in the article: Talent Attraction, Hiring and Retention Issues Talent Attraction Certain issues faced by SMEs in attracting talent can be:

Not maintaining an active database of potential hires adverts are placed each time there is a vacancy without harnessing past database effectively Not implementing comprehensive hiring channels such as referral, graduate recruitment, internal transfers etc., Lack of detailed job analysis which leads to ineffective recruitment (i.e. often it is not known what are the key criteria for hiring the personnel and key success factors on the job),

Weak or no employer branding candidates do not have a good knowledge of the overall organization OR do not have a good experience during the recruitment exercise Not able to offer higher than average starting salaries and having

standard benefits/rewards Hiring and Selection Building a strong workforce can be a challenge. The following factors contribute towards that challenge:

Top talent command premium: Well, after weeks of hunting and rounds of interviews, you found the right guy. But his pay expectations are way beyond your estimates. This is a typical scenario in many companies today. Talented people dont come cheap. Mind you, talent comes at a price. Talented folks command premium. If you are willing to pay more you get the right guy. Else, you lose him.

Wide Job opportunities: Continuing with the pay expectations topic, if you arent willing to pay a premium, someone else will. Just think for a moment who is the loser? Not the candidate! And you lost the guy just for a few more dollars! (perhaps a few hundred!) Currently, the market place is marked by war for talent and talent-focused corporates would go to any length to get the right guy. The world is not just flat but wide too! The marketplace is flooded with new age companies (read IT & ITeS companies) ready to offer more not only in terms of lucrative compensation but also challenging job profile, crossfunctional exposure levels, onsite job opportunities, higher responsibilities, plush work ambience and overall corporate culture not to speak of world-class brand image that would lend prestige to people who opt to work for them. Other factors that affect the hiring in SMEs are: Employer Branding The biggest question here is- Why should anyone work for my company? Corporate branding is a very important aspect for a job seeker to come onboard. Remember, today we are in an employee-driven job market and as such candidates have the luxury to choose whom to work for. Because, the candidate is entrusting his career in your hands for the next, say few years or so. Hence, it is understandable that he is choosy about his prospective employer. Talent shortage Talent shortage is the familiar refrain for long and in the times to come it is going to get acute than ever before. Too many job openings but too few candidates available. Its a classic case of too many chasing too few to fill in the jobs. While it is the general scenario prevalent across all industry sectors, this would be more pronounced if you are looking for folks in new technology platforms in the IT sector.

effective HR sourcing If talent doesnt come to you, youll have to go to it. Gone are the days when candidates used to hang around for jobs. Todays candidates are in a strong wicket to consciously choose their employers and if you stay where you are refusing to budge in your quest for talent, you will lose. SMEs need to take a hard look at their current HR sourcing strategies. Talent Retention

Lack of a comprehensive orientation program or induction training

Lack of clear career path development for individual staff

Lack of communication of corporate goals/vision

Lack of job-rotation: often SMEs lose talents as they are not able to provide new learning opportunities within the organization by redesigning jobs etc.

Minimum investment in training & development

Talent Management Issues: SMEs face the same fundamental talent issues that large firms do. They need to attract, select, motivate, deploy, develop and retain talent. However, SMEs face some particular constraints; constraints that are more pronounced the smaller the firm. These constraints are: Lack of Specialized Expertise- Large firms will have experts in specialized areas of talent management. For example, they may have experts in assessment methodologies, diversity or instructional design. Smaller firms may know that sourcing is important, for example, but not have much specialized expertise in the subject. Fewer Economies of Scale- Large firms can afford to invest in researching what psychometric tests are best or which talent-management software is most reliable. Smaller firms often cannot afford to do the kind of in-depth assessment of talent management tools they would like.This matters because not all tools are appropriate and/or good for every company. Criticality of Each Hire- A firm with 1,000 call center reps will not be much affected by a very bad or very good hire. However, if you only have five reps then each individual is touching 20 per cent of your customer base. Criticality of Turnover- The smaller the firm the more of a continuity problem it faces when there is turnover in key jobs. For example, the loss of one marketing person may mean losing the relationship with the ad agency, the history of what worked, and the location of the relevant files. Interestingly, the reverse problem can also occur. Ann Bartelstein, who spent many years in HR in SMEs, says lack of turnover can mean the firm is stuck with the wrong people. WHAT SHOULD SMEs DO? Outsource Outsourcing non-core activities is increasingly becoming popular even for SMEs. Instead of incurring huge fixed costs in manpower to manage recruitment / retention issues with sophisticated IT software, SMEs can reap the following benefits by outsourcing such functions to the experts in the field

Cost savings Focus on strategic functions Access to world-class recruitment/retention strategies

Create employer branding Quality of Hire

Employer Branding Having mentioned outsourcing as one of the strategies in managing talents, the responsibility on employer branding still remains with the organization. Companies need to brand themselves as choiced employers just like how they brand their products and services. There are some distinct advantages of being an SME which need to be communicated to job seekers and existing staff. Being small can be an asset in many instances. Having a staff strength of less than 300 makes an organization a lot more nimble, fast and flexible compared to larger MNCs which often wait for global initiatives before implementing changes in their HR policies and practices. The following are some tips for SMEs: Talent Attraction

focus on key strengths such as innovative, fast-growing regional exposure Provide flexible and innovative benefits/rewards that cater to individual needs Measure the current hiring effectiveness indices such as cost per hire, days to fill a job, effectiveness of hiring channels, candidate experience are critical so that SMEs can track where there are bottlenecks and where the hiring process can be improved. Plan career path for individuals More growth opportunities, regionalization which is attractive to the younger workforce

Talent Retention

Shift from being family-oriented to more performance-based Communicating the corporate goals, vision, direction (for a more engaged workforce) HR can afford to give personalized attention to individuals needs in terms of benefits, rewards, career goals, training & development needs Invest in meaningful training & development that leads to job expansion for staff. Once the SME has established themselves as a choice employer with attractive and innovative HR policies, retention strategies and career advancement opportunities, it is only a matter of time that happy employees spread the word. There is nothing more powerful for an organization than happy staffs who become their ambassadors wherever they go! This inevitably does wonders for enhanced emplo yer branding and attracting better talents over the years.

Growth is often the bulls eye businesses aim for, yet ironically enough, when it arrives the sudden surge can cause a company to falter or even fail. James Phillipson, a chartered accountant who provides strategic financial management skills to small and medium sized businesses (SMEs), has a good grasp of the "growth challenges" smaller companies face. For the last twenty-five years he has helped companies use financial systems and processes to grow their business. While successful firms will normally take care of routine accounting requirements, explains Phillipson, quite often their staff and management both lack the experience needed to meet the challenges of growth. "When a business is successful and grows, particularly when the growth is rapid, management is almost always operating with limited resources and one of those is limited financial management expertise," said Phillipson. "This is not surprising if the owner does not have any financial training." "A SME cannot justify a full-time, suitably qualified Controller until it reaches a certain point and so it often continues to utilize the same staff as was necessary when the business was much smaller. Often this Accountant is capable of preparing the necessary compliance referred to above. However, that person often does not have the experience to effectively manage the slightly more complex challenges that success and growth entail."

Success inhibitors and what you need to do to overcome them

Phillipson has identified eight major challenges that a company must overcome as it grows. Here is his advice on where the problems lie and what you can do to resolve them. 1. Lack of capital Lack of capital is often the most critical challenge that a successful SME faces as its very success creates this and it quickly becomes a vicious circle. Without very diligent cash flow management and/or raising of more capital, including debt, the business often is constrained by capital as it grows. Often the profit in one operating cycle is insufficient to fund the extra working capital required for the next operating cycle. This is especially the case where a business is either inventory or receivables intensive and/or the operating cycle is a long one. (The operating cycle is the average time that it takes from the first receipt of inventory to when the customer pays for the goods sold.) This can be made even worse where capital goods are required to process the goods and the company cannot finance the acquisition of these capital assets. Many capable

entrepreneurs cannot overcome the obstacles in their businesses cash flow cycle and cannot understand why bankers and other lenders often cannot provide the financing as the SME often does not have the security to support the debt. The solution is often easier than most entrepreneurs realize. It often starts with a plan to see what your cash needs are and when your cash needs arise. Then one is in a position to manage it and focus on the cash management techniques most likely to be successful in your business. 2. Lack of management skills Lack of management skills is a problem that is very difficult to deal with in most SMEs as the size of the senior management team is necessarily limited. These areas of weakness could be in finance, human resources, marketing any area where the current management does not have the expertise, or the time to deal with the issues. The solution is to determine what those areas of weakness are and then to develop a plan for dealing with those challenges. Once you spend the time to recognize a weakness -- as long as it is not in a core area for the specific business -- it often can be compensated for without a lot of time, effort or money. Solutions can be as simple as assigning the responsibility to an existing manager with a requirement to watch for the obvious pitfalls, to hiring a person part-time or a consultant. The solutions are often obvious if one spends a little time planning and assigning responsibility. And yes, it often is effective to assign that responsibility to yourself as you then know that you have to deal with the issues rather than waiting for an issue to become a real problem. 3. Lack of information about what is - and isn't - working Lack of information about what is working, and what is not working, in the business can be an issue. Often companies do not measure their results and when something specific causes a blip (positive or negative) in results they do not know what has caused the success or problem. Implementing a process for measuring and tracking key performance indicators (KPIs) on a weekly, or at least monthly, basis is key to enabling management to react to challenges and opportunities alike. The old saying that you cannot manage what you do not measure is so true. If nothing else, it often alerts you to a change from the norm much sooner than waiting until you otherwise become aware of it. Once awareness is established, solutions are easier to find. 4. Lack of a plan Lack of a plan is often a fundamental problem for many SMEs. The arguments for planning are many and irrefutable and yet this is a very common failing for most SMEs except those that are enjoying very rapid growth. In my opinion there are three very fundamental reasons for implementing a planning process: a. If your plan sets out certain objectives you are much more likely to achieve - or exceed - them than if you just keep barreling along. Research has often shown this to be true and it stands to reason that having a plan will enable you to often think through and implement the steps necessary to achieve that plan;

b. Most SMEs spend so much time dealing with the "alligators" that are snapping at their rear end that it is difficult to recognize the steps necessary to achieve your long-term objectives. A plan disciplines you to look "beyond the weeds" from time to time; and c. A plan can often alert you to inconsistencies that need to be managed e.g. a lack of capital or other resources necessary to fund the growth projected. Once recognized you are in a position to better manage the limiting factor. 5. Poor procedures Poor procedures are a constant challenge for a SME trying to manage with limited resources. Most entrepreneurs do not realize that the procedures in place for managing the business need to be well designed to reduce the incidence of errors. Error correction is often a major waste of time and particularly management time. Good procedures with a little time and effort invested up front will usually pay enormous dividends in time and cost savings on an ongoing basis. 6. Ignoring risks in their assessment of alternatives and opportunities Many entrepreneurs ignore risk in their assessment of alternatives and opportunities. A business is about taking managed risks and one cannot insure for or avoid risk if one is in business. However in my experience few, once they have chosen a course of action, pause to consciously think of ways to manage the risk and determine procedures or steps that can be taken to reduce the risk and increase the chances of success. Often, this is as simple as "diarizing" to follow-up on an issue so that it does not get forgotten or having a second person review something to reduce the risk of error. 7. Lack of focus Lack of focus is often a real challenge for an entrepreneur in a SME as there are constant changes in priorities, issues that need attention and other fires to be extinguished. Often opportunities present themselves and it is difficult to say "no" to a short-term opportunity that will distract you from your long-term goals. Be clear on your long-term objectives and the opportunities that will facilitate your achieving this. Then evaluate other opportunities by the extent to which they draw resources away from your ability to achieve those long-term goals. 8. Failure to plan for issues absorbing the majority of your time Each of the above potential mistakes are common and are often encountered in businesses that could do lot better. However, the greatest failing that I encounter is an owner/manager not pausing to plan for the issues and solutions that are absorbing so much of his/her time and energy. Probably the scarcest resource in most businesses is the time of the owner/President and a little time developing a strategy can often free up the opportunity to focus on real priorities.

Earlier this month, Wallace Immen, staff writer for The Globe & Mail highlighted three HR areas where small to medium-sized enterprises (SMEs) may face challenges in 2013. In the article, Management challenges you cant afford to ignore in 2013, Immen identified Engagement, Turnover, and Leadership as the most concerning HR issues, as reported by a Forbes Insights survey for Deloitte & Touche LLP. With these three topics in mind, we would like to take this opportunity to offer our tips for SMEs that are looking to tackle these challenges while growing their business in the year ahead. Engagement Countless reports and studies (including our own) have confirmed that employees want to know that their work is meaningful and recognized as such. While compensation and benefits are important factors in retention initiatives, few employees are willing to stick around solely for the health coverage if they dont believe their role is reflective of their skills and abilities. The key to addressing engagement is to first focus on fit. Hiring employees that have the right skills and the right attitude for the position will ultimately have higher levels of engagement. After the hiring process, engagement can be further supported with performance management and recognition programs. Turnover Immen identified that both millennials and employees with less than two years on the job are more likely to consider leaving for another employer. To reduce the levels of employee turnover, our advice to employers is to start with immediate supervisors. Our internship model includes coaching as one of the four pillars of successful internship experiences because we believe in the power of supportive intern onboarding. Immediate supervisors and/or informal mentors can drive performance management and show appreciation, resulting in greater engagement and lower levels of turnover. Internships and mentoring programs also allow employers and new employees alike to determine cultural fit in a low-risk context. The better the fit is initially, the lower turnover will be in the long run. Ultimately, if employees like their coworkers, feel valued and respected by their managers, and believe that their work is important, they will stick around. Leadership As Immen notes, employees that trust their corporate leaders are less likely to consider leaving their organizations. But we believe leadership goes beyond establishing trust. Leaders especially those in small and medium-sized businesses must clearly communicate the mission, goals, and direction of their organization to employees while reflecting these points in their own work. Ensuring that your onboarding process includes palpable communication and exemplification of your organizations corporate culture will not only show leadership, but will help employees understand how their role and attitude is reflected in the organizations structure

Mentoring: we match promising startups and SMEs with advisors and board members who have relevant experience and a personal interest in promoting the growth of young organisations and entrepreneurs. Idea formulation and implementation: we take startups and business owners through a checklist of marketing and due diligence questions utilised by VCs and corporate business developers to refine new business ideas and assess feasibility including alternatives, opportunities and risks. With a clear view of the market, a roadmap can be developed with measurable targets and outcomes.

Partnership development: a major challenges for SMEs, particularly in East Africa is developing sustainable and equitable partnerships with other SMEs and larger businesses to achieve common goals. Our expertise in incentives, contract formulation and negotiations help SMEs overcome this obstacle.

Value Chain Analysis: we help break down the specific market values chain to identify gaps and areas for value creation that can give an organisation an edge in delivering its services. Systems Implementation and IT: our expertise in organisational design, operational research, quality management and risk management enables us to develop streamlined and scalable processes for a productive and stress-free work environment. Our partners in information technology will also help identify an organisations information needs, recommend and implement a cost -effective mix of IT solutions for our clients needs.

Career Development and Succession Programs: SMEs and family businesses have unique objectives and challenges in developing and retaining talent. We work with the owners in succession planning and we implement a career development program that facilitates the development of strong and motivated middle and senior management.

Enterprise Consulting: is a comprehensive distribution, operational, strategic and financial solution incorporating all of our services to meet the needs of startups and SMEs seeking an integrated, streamlined and scalable enterprise platform in a 3-month intensive program or 6 to 12-month paced program. We work with management to structure the organisation to achieve specific goals, be they growth, profitability, innovation or market leadership and we provide the plans, systems, and financing if necessary, needed to transition the organisation through its near-term, mid-term and long-term objectives.

The picture emerging from the research is one of European SMEs understanding the need to move HR on to a higher plane in terms of its contribution to the organizations overall strategy and searching for ways of doing this through talent management supported by improvements to the way they gather and analyze workforce information. The competition for experienced and knowledgeable employees has remained key throughout the recession and is likely to intensify as the economy improves. Smaller organizations are aware of this challenge and the fact that a more strategic approach to HR can help to meet it, for example, by appointing HR business partners to work closely with business managers to provide advice in specialist areas such as recruitment and retention, as their larger company counterparts do. SMEs historically have a harder battle for talent due to their size and more limited HR resources. As a result, the more agile their core HR processes and systems are, the more time and resources can be freed to deal with the main challenges. They may be later on to the scene in terms of automation and outsourcing, but many are starting to increase investment in these solutions as part of their development of the HR function into a true strategic partner. Their size, allowing for more flexibility, and the availability of new and, by now, proven and integrated technology might even work to the advantage of SMEs, with the new generation of employees looking for a rewarding lifestyle rather than a long-term career in an organization To summarize, SMEs are required to narrow down on the right resource after a meticulous consideration of the position that is required to be filled. HR functions deal with different dynamics when contributing to SME growth plan. While the organization plans to follow a successful trajectory, there is a need for both HR and senior management executives to discover change agents for successful hiring. SMEs must understand the difference between the traditional and the conventional approach of Talent Attraction to execute the much required change for effective hiring. SMEs largely require focusing on recruiting individuals with the appropriate skills, using suitable evaluation procedures that verify the candidates expertise.

More than two-thirds of the UKs workforce is employed by SMEs. They are the lifeblood of the UK economy and are vital for jobs, growth, productivity and innovation. Many SMEs recognise that good people management is fundamental to their long-term performance and growth. What is the impact of HR on SMEs? Many delivering HR in SMEs can find themselves sidelined into administrative duties and are not seen as core to the overall strategic direction of the organisations they work for. The issue needs to be addressed by exploring business focused HR practices and providing practitioners with the tools they need to be a successful HR professional within an SME. Many SMEs face the same people management challenges as larger organisations, but dont have the HR focussed resources and capabilities. A further analysis around research and learning outputs is needed, specifically designed to help SME business leaders, HR professionals, and the consultants that support them.

Whether an SME is newly established or experiencing growth or transition, the way that people are managed can play a crucial role in driving the long-term performance of the organisation. HR professionals in SMEs need to skilfully couple a deep understanding of the business strategy and the organisations values, with their own knowledge of people management opportunities and challenges. They need to move beyond admin and make a real contribution to business growth moving from transactional to transformational people management practices. The Chartered Institute for Personnel and Developments (CIPD) report on achieving sustainable organisational performance through HR in SMEs focuses on innovative approaches that can help move HR from an administrative function to the strategic function needed for sustainable business growth. The research, which identified a number of key insights applicable to those working in SMEs, found that process driven responses to people management challenges as a business grows may only provide short term solutions and may miss a golden opportunity to support the longer-term goals of the organisation. HR practitioners need to look at people skills, strengths and strategies to facilitate continuing growth, explore the importance of HRs link to the CEO and what expectations and priorities they may have for HR in their organisations and consider how to maintain organisational values and culture whilst growing the brand and people. The result will be that a true strategic contribution will be made to their organisation.

When big organizations go on a rampage, small ones have to think smart.This is the wisdom for Indias small and medium enterprises (SMEs)hat fail to keep pace with the growth juggernaut. Amidst lot of competition within SMEs, it becomes very important for the SMEs to benchmark various processes in order to remain competitive within the marketplace and ensure they can benefit from what their competitors are doing to stay one step ahead of the game.

Human resources are one of the most essential growth indicators for these organizations. Growth-hungry large companies are scouring the market for human resources (HR)