How Do SMEs Survive Without Human Resources? [By Nadine Jazmati]

For some Small and Medium Enterprises – organisations with less than 50 people – HR management is not as common as in multinationals with complex structures. But how can these organisations sustain positive growth along with healthy human capital in a productive environment? With a clear, simple and coherent structure these companies can successfully grow their businesses and engage their employees without necessarily allocating an HR division. In fact, some SMEs choose not to engage HR professionals but to invest more to elevate the awareness level in its employees, particularly in their Managers or Heads of Divisions who will be the parties in charge of the strategic roles of their teams. Therefore, successful leadership styles and business growth always start from the CEO’s directions.

The Manager’s influence on the individuals they lead and in overall organisation performance can be a great asset for the companies looking to get ahead of competition with a highly effective team. Managers need to be properly equipped to take the role to lead themselves and others effectively as well as taking on a human capital strategic role. The role of the CEO is thus to personally select and recruit the managers with the correct mind-set of productivity, able to embrace the need of their team in strategic and long-term focus perspectives.

In this regard, Managers in small organisations know best who to promote and can identify the champions within the teams. Managers can reinforce them and leverage on them to lead by example, train new employees and strategically enhance the productivity level to keep it aligned with the business goals. However, 57% of SMEs who participated in the 2014 SME Survey conducted by DP Group expressed that they are facing some concerns of tight employee mind-set with not much input in midterm or long term strategy. These firms acknowledge that having the right people is an utterly crucial component of firm productivity and business success.

On the other hand, Managers in these SMEs may consider the daily operational implications of human capital management a tedious and time consuming process. With little upfront investment in automation of human resource operational function, SMEs can enjoy enterprise-grade HR solutions that can help them to manage end-to-end employee’s needs with minimum involvement from Managers.

With this dynamic approach, SMEs can react to new opportunities and sustain the growth of their business, without depending on an HR professional. Putting attention and effort into re-examining their business model, reducing dependence on hierarchy and automating daily operations are pillars to their success to move towards higher levels of productivity.

By Nadine Jazmati