8 Aug 2018, 11:47 — 5 min read
According to the estimates, the MSME sector provides employment to more than 40% of India’s total workforce but contributes to less than 30% of the GDP. This is due to the many constraints faced by this segment and a prominent one is, the lack of HR infrastructure that can help measure and enhance productivity.
A survey conducted by CII says, 20% of medium and 80% of small-sized businesses have no HR departments. This is shocking as without a proper functioning HR department, implementing various people-related processes and policies would be difficult.
Not undermining their incredible growth so far, SMEs are still grappling with some of the inherent people and culture related challenges such as -
It is always advisable to create HR system right from the start so that people and processes are aligned to the business goals. Well laid out HR practices help in removing various ambiguities related to one’s job and role in the organisation and thus help in improving overall motivation and controlling attrition.
Below-mentioned are few warning signs would let you know that it is high time for you to have a structured HR in your organization
Today forget developing engaging initiatives with your employees, mundane day-to-day tasks of administration and compliance issues eats up all of promoter’s time. This one itself is a great reason to consider outsourcing human resource function.
Outsourcing HR Function
SME enterprises can outsource the entire HR function where the consultant acts as your internal HR department OR you can outsource a part such as designing policies, designing Performance Management System to get expert support.
However like everything else in business especially people management, a one size fits all doesn’t work. The key is to develop a strategy and solution that works for you and your organization.
Few benefits Of HR Outsourcing:
Underestimation of HR role for the growth of business is the bane amongst SMEs. Profitable business being the only the focus, HR had most often been brushed aside as cost centre. But now there is visible focus shift happening to realise this emerging need in shaping the culture of the company and identifying and retaining right talent to drive the business. HR presence for SMEs significantly helps to minimise promoter's involvement in non-productive people related issues.
While SMEs continue their growth trajectory, the need is to recognise and address these challenges so that both SMEs and HR can work together to implement various desirable changes in the enterprise.
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