"SUCCESS in business is all about people, people, people," Richard Branson once said. Indeed, talent is the heartbeat of any organisation. For small and medium-sized enterprises (SMEs), attracting, retaining and bringing out the best in talent are essential to business growth.
Creating 70 per cent of jobs in Singapore and contributing more than 50 per cent of economic output, SMEs are the backbone of Singapore's economy. But, hit by a manpower crunch and rising costs, SMEs are being forced to restructure in order to survive.
Unsurprisingly, the government is giving this sector widespread attention. Numerous initiatives have been implemented to help SMEs to internationalise and deepen their capabilities. These include the enhanced funding support for the Capability Development Grant (CDG), which helps to defray the qualifying costs of upgrading projects in various areas. One of these areas is human capital development.
The success of any organisation rests on having talented people to drive the company forward. For SMEs, this is even more critical given that they are pitted against multinational companies (MNCs) in the war for talent.
The business drivers of SMEs are inextricably linked to the people challenges they face. Of all the barriers that can impede execution, talent by far carries the heaviest weight.
SMEs need to be nimble and operationally agile. This means getting the right person at the right time at the right location and at the right cost to do the job. Not many SMEs have their talent management process locked down to get this right. SMEs need to explore the widest talent pools, while focusing on practical and tailored development to upgrade their people.
Another important business driver is cost competitiveness. Getting the balance of quality and quantity of resources for the right price can be tricky. SMEs may not have a good understanding of the internal and external supply and demand forces in getting talent, as well as having a grasp on the productivity of talent.
Developing a talent strategy
Businesses spend time defining products, services, markets, customer acquisition and retention strategies but often neglect the enabler which brings it all together in an organisation: people.
Often, SMEs may have no formal system or documented approach to train, develop and manage their workforce. They may also lack a well-developed performance and rewards system. This leaves employees with little or no guidance on potential career paths or leadership opportunities.
How can SMEs initiate a talent strategy? For a start, they should ask themselves the following questions: What is the source of our talent? What skills do we need to hire? How can we be optimally structured to get the best for the organisation? What is our employee value proposition? Why should an employee work for us? What behaviours or competencies do we expect from employees? What are the performance goals for the roles in the organisation? How will we reward the employees? How do we enhance the productivity of the organisation? How will we train and develop our people? How will we be flexible to manage employee needs?
The answers to these questions will form the basis of the SME's talent strategy. Then they will be able to measure talent outcomes, just like business outcomes.
Capitalising on competitive advantages
Compared to MNCs, SMEs may not have financial muscle or large resources at their disposal. But they can leverage their competitive advantages to embrace change and invest in talent management strategies.
Understanding the needs of workforce
SMEs have a greater understanding of their workforce and can respond to individual needs without having to adopt a one-size-fits-all approach. While larger organisations may have to use tools such as engagement surveys to identify critical trends, SMEs can follow a more on-the-ground approach to gather information. This is only possible if channels of communication are constantly open.
Commitment from senior leadership
To engage employees effectively, it is critical to communicate organisational goals and available career opportunities clearly. SMEs are uniquely placed to thrive on this as employees have direct access to leaders who can share the goals of the organisation and showcase how each individual's role contributes to those goals.
Delivering performance-linked rewards
Entrepreneurial individuals are motivated to seize opportunities offered by digital advances. SMEs can capitalise on this by creating ownership across a key group of employees through both short and long-term incentives. The alignment of rewards to performance will enable SMEs to compete effectively for talent in the marketplace. Here, overall compensation and benefit programmes need to be market-competitive.
Focus on high-performers
SMEs can identify future leaders early in their career and help them close any skill gaps. High-performers could be given multiple opportunities including involvement in strategic projects, international assignments and mentorship programmes.
SMEs need to develop a strong employee value proposition to ensure the talent pipeline is healthy. Harnessing the full potential of their human capital is an integral part of their business strategy.