From the tree’s roots Dear Readers, As we step into the second successful year of our existence, it gives us immense pleasure in welcoming you to read our third exciting edition. In this issue, we have tried to focus on some key areas in HR such as Talent Acquisition, Talent Management, Employee Engagement, HR Transformation and HR Challenges. We have also tried to reiterate the importance of the much talked about, but least worked upon aspect of “Work-Life Balance”. We express our heartfelt gratitude to Ms. Barsha Chakraborty, AVP, Human Resources, G-Cube Solutions,Mr. S.Padmanabhan, Director HR, Dr.Reddy’s Laboratories, Mr. Aloke Tagore, Regional HR Head - East ,Deloitte Touche Tohmatsu India Pvt. Ltd and Ms. Linda Johansson, Global Sustainability Coordinator, H&M, for their valuable time and insights. We take this opportunity to congratulate all the winners of “The People Tree Article Writing” competition. We would be delighted to have your valuable suggestions and feedback. Please feel free to write to us at thepeopletree.mhrm.iitkgp@gmail.com . Happy Reading!!! Editing Team

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The HR Challenges in SMEs By

N.N Subburam Amrita School of Business

The Small and Medium Enterprises (SMEs) in

India have performed substantially well and

enabled the country to achieve huge industrial

growth and diversification. Today SMEs have

become a dynamic, vibrant and vital sector for

the growth of the Indian economy and it

contributes around 45 % of industrial output,

40% of exports, 42 million in employment,

create one million jobs every year and

produces more than 8000 quality products for

the Indian and international markets. The

growth opportunities for the SMEs in India look

impressive but there are numerous challenges

they face every day and the most crucial

challenge they face is in the Human Resource

Department.

In this highly competitive and constantly

changing business scenario the most valuable

resources that need to be leveraged is the

Human Resources. Traditional organizations

distinguished them from the competitors by

their products, services or even processes.

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But today, these are no more considered as competitive

advantage because they can be easily emulated. Building and

retaining a passionate workforce which is committed to the

organization, ready to take up numerous challenges, willing to

run the extra-mile is very difficult. The role of HR does not end

just at attracting and retaining the best of the best employees

available in the industry. Motivating them, engaging them to the

strategic goals of the organization and making them fit to the

organizational culture are important issues which create

nightmares to business leaders, top management and HR

professionals.

This article would mainly focus on the challenges faced by SMEs

in

Recruitment

Retention and

Employer Branding

Challenges in Recruitment

Employees in an organization are the most essential growth

drivers. Finding out the right candidate is highly challenging for

SMEs because they are not adept in modern methods of hiring

and find it difficult to locate the best talent available in the

industry. Most of the SMEs do not provide a clear job description

as most of the large companies do. So candidates applying in

SMEs do not have a clear picture of the job which they are

applying for. Top talent comes always at premium price, and if

the pay packages are not attractive then they would be lost to the

competitors.

In India many SMEs in Tier B, Tier C cities are not aware of

the modern techniques of recruitment such as online

recruitment or E-Recruitment, boomerang recruitment, social

media recruitment and mobile recruitment. They still follow

traditional way of recruitment such as newspaper Ads,

employment agency or search firms. The roles and

responsibilities of the candidates are not clearly formed in

most of SMEs and at the fresher level most candidates

accept it and crib later, which leads to high attrition.

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Solutions for Recruitment issues

SMEs should adopt new recruitment methods. They should

implement effective hiring channels such as employee

referrals, graduate recruitment and so on.

SMEs can maintain an active database of the candidates who

have applied earlier and during vacancies, the companies can

retrieve them according to the requirements and reduce the

search cost and time.

Proper job analysis should be done and detailed job

description should be provided to the candidates. It should be

kept as a tool for measuring the traits of the candidates.

Retention

Executives are extremely worried how to retain their key people in the

organization and make their alliances continual. Companies should

strive to know the reasons for attrition in SMEs and the factors leading

to attrition should be identified, analyzed and measures should be taken

to reduce attrition. There are several factors which lead to the departure

of the people such as

Unfriendly manager-employee relationship

Bad working conditions

Nature of the job

No job security

Improper work/life balance

Less opportunity for growth and advancement

If these factors are analyzed beforehand, the HR related issues can be

reduced.

Employer Branding

In the corporate ecosystem, employer branding is gaining tremendous

momentum and because of this, SMEs are finding difficult to attract and

retain the talent. Earlier, employer branding was not considered

seriously by many organizations. But today it’s crucial because of the

economic climate in India, where businesses experience heavy pressure

to cut costs and increase productivity. Getting the right people with right

skills, attitude, knowledge and experience to drive the business is

strategically important. Developing an employer brand will help SMEs

to attract the best talent and building an image in the minds of

employees as a “great place to work” would reduce the time and money

spent on quest for talent.

These are the few typical HR challenges that SMEs face and they should

overcome these obstacles through a well-thought process and realistic

plan. SMEs should collaborate and channelize the skill sets and strengths

of their employees to achieve the overall business objectives.