Its never been so critical for small and medium enterprises (SMEs) as today to focus on attracting and retaining sound talent to cope with the ever changing market conditions and technological upheavals. The economic slowdown this year has prompted SMEs to be judicious in their approach to business growth and people investment. Rather than scaling up operations, the sector is now looking to focus on operational excellence, and this has reflected in their manpower needs as well.
For instance, employment for the year was rather stagnant in most sectors. Net employment in the current year grew only by 8%. Manufacturing, the mainstay of 67% SMEs, saw a decline in job levels in the second quarter and overall stagnation in 2012. The good news is that the sector can keep up its growth momentum through innovative HR practices that minimise employee spend.
Social media: SMEs have to enter the space of social media to attract the right people at the right cost and quality; entering the new age media to bring a brand positioning and recall value would go a long way in letting the pool of future employees know about the enterprises values, ethics and goals. The effect of social media branding would be not just working in the mind space to attract people but also leaving a technological lead for creating an alumni effect. This is linked to the next option crowd sourcing.
Crowd sourcing: Another novel way adopted by tech-savvy SMEs is crowd sourcing, a recent concept that involves outsourcing to online communities tasks that were traditionally performed by an employee or an outsourcing unit. Crowd sourcing enables companies to send out an open call to a large group or crowd available onlinecalled the freelance marketplaceand get quality job done online at best possible prices. Crowd sourcing is largely used in areas such as software, writing, data entry and design.
Outsourcing & vendor consolidation: Though both are diverse strategies, these are interlinked. The growing workforce complexities and the lack of skilled labour have forced the SME sector to rope in professional agencies to make their organisations more structured. Apart from recruiting, SMEs are availing of professional help in performance management, compensation, rewards and HR policies. Companies that have already done vendor management would do well to evaluate and consolidate their options in the market to ensure competitive pricing.
Temporary staffing: More and more SMEs are warming up to the concept of having temporary staff or Flexi staff. Flexi staff or temps are employees who are hired for a specific task or period. In most cases they are hired on short-term projects or to meet a sudden burst in demand. This helps enterprises to reduce the staff cost and administrative burden. The volatile market scenario has aided the trend of temp staffing in the sector. Another trend is outsourcing of temp recruitment to professional agencies. Such agencies help enterprises in managing the pay roll and related complexities.
Talent management: Attracting the right kind of talent is not the only challenging task for the SMEs, retaining talent also requires equal effort. To address this issue, several SMBs have successfully developed their own methodologies to keep the attrition rate down. It involves rewarding good managers, scaling up bad ones; investing on re-skilling and intrapreneurship. In intrapreneurship, the approach is to handle each employee as an entrepreneur within the organisation. Each employee is empowered to take decisions within a broad set of parameters and is responsible for all aspects of the project.
In an unequal dispensation where small companies compete with large, resourceful companies for skills and talents, it is important for SMEs to keep abreast of the new concepts, trends and channels in the human resources space.
The author is senior vice-president & co-founder, TeamLease Services