Post on 23-Mar-2016
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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.