SMALL and medium-sized enterprises (SMEs) do not have strong human resource (HR) practices and are especially weak in the area of learning and development, according to the results of the pilot run of a diagnostic tool designed to gauge the HR maturity of companies.
The diagnostic tool, which was developed by Spring Singapore and managing consulting firm Hay Group, was tested on 177 SMEs. Intended to reach out to 1,000 SMEs over the next three years, the tool is designed to help SMEs identify gaps in their HR management and development processes, and the steps needed to address them.
According to Hay Group, the companies which took part in the pilot scored an average of 2.05; companies are ranked from 1.0 (Rudimentary) to 4.0 (Progressive). Additionally, those in sectors which are more customer-facing seemed to do better; the services sector, for instance, scored 2.27.
As part of efforts to build a community of SME human capital advocates, Spring has also appointed a pool of volunteer HR directors. For a start, these 10 directors will engage SME bosses or HR managers on a voluntary basis.
Spring will also work with progressive SMEs with good HR practices to brand themselves as employers of choice and work with partners like the trade associations and chambers and institutes of higher learning to increase the number of SME-student engagement activities.
These initiatives were announced on Thursday by Minister for Manpower Lim Swee Say at the launch of "The Human Capital Movement", which aims to catalyse a mindset shift in SMEs towards the importance and urgency of developing strong HR capabilities and talent management within the company as a way of attracting and retaining talent.
Soon Aik Holdings, an engineering firm which serves the automotive and marine industries, was one of the SMEs which took part in the pilot.
Chief executive Jimmy Neo candidly admits that the company's HR capabilities are at the rudimentary level.
"Transiting from second generation to third generation makes us have to think of succession planning and also how to further grow the business, and attract people to the organisation," said Mr Neo.
But attracting talent to an industry which is not "sexy" continues to be a problem, said Mr Neo, who has since tapped Spring's capability development grant to work with a consultant.
"We are taking baby steps. We are at level one, we know where are the gaps, and now we are going to engage consultants to help us work on this."
Drawing talent to industries deemed "not sexy" was a theme echoed in the panel discussion at the launch event which was held with Mr Lim, several SME representatives, and Foo Chek Wee, group HR director of Zalora South East Asia and one of the 10 volunteer HR directors.
Susan Chong, founder and CEO of Greenpac, noted that her company is based in the packaging industry, which is widely viewed as a sunset industry.
"It's about mindset and how you reinvent the business so as to attract and tell people why packaging is so important," said Ms Chong. "All manufacturing companies in Singapore need packaging. It's an important supporting industry, and that's why it exists."
Greenpac also makes it a point to not hire from within the industry. Explained Ms Chong: "We want people from other industries. We cannot have people who are so used to the box that they think within the box. I have all sorts of engineers because we need people who think differently and do things differently."