In the war for talent, Small Medium Enterprises (SMEs) are inevitably disadvantaged against the Multinational Corporations (MNCs) with regards to their attractive compensation and benefit packages, which SMEs find hard to match – dollar to dollar.
Even if tangible benefits are made at par, the allure of the brand, scale and stability of the MNCs is hard to beat. Truth be told, many opportunists hop on to the SME brand with a dream, that the additional experience and exposure they gain working for an SME could lead them to greener pastures elsewhere.
And yet, dearth of talented resources makes SMEs to retain talent in order to propel their companies forward. Is all hope lost? There are countless evidences and examples to testify that the small can triumph.
Both Apple and Microsoft were founded in garages, Starbucks had started selling coffee beans from a corner store, while Coca-Cola was first sold in a pharmacy. The fact that MNCs exists at all is the best proof that, these were once humble SMEs who survived and have grown to become multinational corporations of today.
SMEs are fighting the opportunity battle, but it’s given that over 90% of small businesses fail in the first 5 years. By adopting talent management strategies and ideas discussed, SMEs might just be able to turn the odds in their favour.
Sustain a Learning Culture
SMEs are short of hands. This means that everyone is required to take on more roles and more responsibilities. This makes SMEs seem as fertile learning grounds.
Employers should know how to sell this point during hiring, but also on how to sustain the brand appeal during employment. SMEs need to continuously create development opportunities and challenges for employees to learn and grow.
Through this approach, they could become self-sustaining. When employees grow, this will foster companies’ growth to create leeway for new opportunities and challenges.
While this idea is not new but the strains of operational needs often cause aspects to employee development being neglected or overlooked. Hence it is critical for HR managers to drive a culture of innovation that stimulates and catalyzes employee development through various means.
For instance, if employees cannot spare time to attend training sessions, then conduct lunch-time talks, or tap on technology to implement mobile learning, e-learning or discussion groups in WhatsApp.
Hire the Right Talent
A wrong hire is not only an expensive mistake for the company but it can have a toxic impact on the productivity and morale of other employees as well.
Though SMEs might lack access to more advanced talent identification and hiring technological systems on the likes of psychometric assessments, job and competency libraries and benchmarks, there are other alternatives they can resort to.
Taking a page from Donald’s Trump “Apprentice”, where potential employees are put through a grueling selection process over a period of time, likewise HR professionals working for SMEs could work towards reaching out to schools to recruit interns, instead of just placing them in administrative positions.
More challenging work can be assigned to these energetic new hires to assess their talent potential and based on their caliber, these talents could be wooed to join the companies post graduation.
Given the smaller size and flatter hierarchy of SMEs, the workplace culture tends to be more close-knit, familial and informal compared to MNCs. The smaller scale and size of operations makes it easier for employee management, faster communication and feedback.
In this workplace dynamics, HR professionals tend to become an ear from the ground and effective business partners responsible for coordination with the key stakeholders.
As such, during interviews, HR managers are in a better position to size up candidates, who meet the business needs and are a good organizational and cultural fit as well.
The process might seem protracted with the selection criteria becoming more stringent than ever before, but it is better to hire late then recruit a wrong one on board.
In midst of all these talent recruitment challenges, if there is any manpower shortage, then HR can consider leveraging on the growing pool of part-timers, contract workers and freelancers, who yearn for greater flexibility in work schedules. This will help hiring managers to get the productivity goals accomplished, without compromising on a bad hire for short-gap arrangement.
Retain the Star Talent
A competitive pay scheme is critical for any talent management practice and retention strategy. While the SMEs (or even the MNCs) would never be able to fully pander to the desires of the human appetite, they should provide fair compensation to the talented workforce.
As the psychological contract between modern employees and organizations weaken with shorter tenures on job being the norm, it becomes increasingly important for HR managers to ensure that the monetary aspect is rightfully satisfied.
A “50th percentile pay philosophy,” which in essence means paying the average market rate could work; it is worthwhile for employers to consider the implications. Essentially, what type of worker would demand or deserve the average pay in the market? Plausibility, it will be an average worker.
With the advent of internet and social media, there is an explosion of information. Previously, confidential compensation and benefit information that was secretly held within the HR team might not be so hard to obtain after all for the Internet-savvy workforce – at least in terms of market benchmark data, with research reports and statistical data readily available on the web.
There is a high likelihood that star talent will be in demand in the tight talent market and they might have probably received more than a few phone calls from headhunters and recruiters.
The fact that geographical boundaries are getting blurred through use of technology and a new generation of mobile-friendly workforce reigns the future world of work, things haven’t changed much.
Beyond identifying and monitoring these young, enthusiastic and rising talents closely, the HR managers of SMEs should be able to market benchmarks and implement competitive pay strategies. This further ensures that although the pull factors cannot be deterred, at least the push factors are carefully mitigated.
Chew Han Guan contributes articles regularly for the HR community, and is currently working as a Human Resource Manager with a luxury company. He holds Ph.D in Material Science from NUS and an MBA with distinction from the University of Bradford.
Ramesh Muthusamy is the founder of Alvigor Organisational Development. They partner with HR leaders to create and conduct highly provocative and result oriented programs, to help companies scale up to the next level of growth.
Image credit: smeworld.asia