SMALL and medium enterprises (SMEs) in Singapore suffered a year of uncertainty in 2016, with the number of SMEs that tapped government grants for productivity initiatives falling by over 18 per cent to 16,300.
Yet, despite the drop, SMEs are still expected to create 21,400 new jobs for professionals, managers, executives, and technicians (PMETs) and contribute S$7.8 billion in value-add to the economy.
At the same time, the latest macroeconomic review from the Monetary Authority of Singapore (MAS) shows that a combination of slow economic growth and skill mismatches - with an increasing number of redundancies - sees PMETs struggling to find jobs in a grim market.
Although more jobs will be created by SMEs, PMETs in Singapore may not have the required skill sets for those jobs.
The MAS advises that workers "should equip themselves with the necessary skills to fill the jobs that are currently available and will be in demand in the coming years". This sentiment is echoed in the Aon Best Employers Singapore 2016 study, a flagship programme designed to improve employee engagement, leadership effectiveness, employer brand, and culture to drive high performance. In Singapore, the study includes an SME category and deep-dives into the people issues faced by this critical segment.
Eighty-three per cent of SME CEOs named "poor availability and selection of talent in the external labour market" as one of the key people risks to their businesses. As a result, leaders of these SMEs place great importance on developing a culture of learning and development in order to deliver the right results.
In fact, 73 per cent of employees in SMEs that participated in the Best Employers Singapore programme say that their organisation strongly supports the learning and development of its employees.
So, how can you do this for your SME?
There are three ways - do the basics, be practical, and offer a differentiator.
Let's start with the basic question: What kinds of employees do you want? And what kinds of employees do you need? Innovative and independent? Entrepreneurial and resourceful? Ambitious and willing to learn?
The answers depend on your vision for your SME. It is critical to define your business strategy, before defining the types of jobs required in the organisation. Only then can you determine the competencies required to perform these jobs well.
As a result, assessing the competencies of your current employees in relation to your business strategy becomes critical, especially in this age of disruption.
Instead of looking outwards for skills that your SME lacks, look inwards to support your current employees in their development needs so that they will be able to acquire the skills required to perform well for hot jobs of the future within your company.
However, the issue is that only 33 per cent of SMEs in the Best Employers Singapore programme regularly determine the company's current and future competency and skills requirements and there is much room for improvement in this area for the majority of SMEs in Singapore.
Nonetheless, SMEs must be practical in their approach. Without the economic strength of larger corporations, it's only wise for SMEs to focus on high impact and low-cost methods to attract, hire, and retain employees with the right skills for now and the future.
Formal mentoring programmes have proven to be a cost-effective way to groom emerging talent who understand the skills, knowledge, and values required to succeed within the organisation - yet only 33 per cent of SMEs in the Best Employers Singapore programme use this as a training method.
Mentoring programmes also provide an informal way of learning that benefits both junior employees (in cultivating their leadership skills) as well as senior employees (to fine-tune their management styles).
The question is: Are your managers ready to support employees? Learning requires time and effort from both managers and employees - time and effort that could be spent on work tasks instead. This could have an impact on the day-to-day functioning of the business, and SMEs must have a plan around that. By the same token, all stakeholders from senior leaders to middle managers and employees must be prepared to make this commitment together.
One of the ways is to include learning key performance indicators (KPIs) as a performance metric for both managers and employees, as well as a structured training plan to build employee competencies to support the business direction. However, almost 40 per cent of SME employees feel that the process to help them identify their development needs is not effective.
Furthermore, SMEs are pressured to offer differentiating employee value proposition, by looking inwards and identifying their unique core strengths before exemplifying it outwards to external talent.
Sixty-seven per cent of SMEs in the Best Employers Singapore programme highlighted their struggles to attract the best talent, so it is also important to look at what other SMEs are offering and come up with your own differentiated positioning. Learning & development and career opportunities are seen as the top drivers to engage employees in Singapore, so your SME should consider demonstrating your commitment to helping employees acquire relevant skills so that they can grow their careers alongside your organisation.
To do this, leaders and middle managers make up the key elements to success. They must be educated and/or informed on how to conduct conversations with employees in order to understand their needs, so that there is a two-way feedback channel to understand how employees feel about learning and careers within the organisation. At the same time, it also ensures that employees are informed about the organisation's HR initiatives in these areas to keep them engaged. However, only 50 per cent of participating SMEs coach their people managers on providing career advice and explaining rewards clearly to their people.
What does success look like?
The Aon Best Employers Singapore 2016 study has provided some useful benchmarks. Fifty per cent of SMEs in the Best Employers Singapore programme have strategies in place to offer great learning opportunities and exciting careers. Seventy-seven per cent also have a culture of sharing best practices and job knowledge with colleagues, to support learning through collaboration.
Especially for SMEs, learning and development may appear to be a steep investment to begin with - but they come with great rewards. With a more skilled and sustainable workforce, your SME will stand out as an attractive employer to the best talent available in the market today.
- The writer is the Singapore project manager for Aon Hewitt's flagship research study, the Best Employers Asia programme