Talent related challenges for Small and Medium businesses

Indian small companies often face several talent-related challenges that can hinder their growth and competitiveness. These problems arise from structural issues in the labor market, the business environment, and organizational practices. Here are some of the key talent problems they encounter:

1. Attracting Talent

• Competition with Larger Firms: Larger corporations, multinational companies, and startups with better funding often attract top talent with better compensation, brand recognition, and growth opportunities.
• Location Disadvantages: Many small companies are located in non-metropolitan areas where the talent pool may be smaller, making it harder to find the right candidates.
• Limited Resources: Small companies often don’t have the resources for sophisticated recruitment strategies or the ability to offer competitive salaries and benefits.

2. Skill Gaps

• Mismatch between Education and Industry Needs: Many Indian graduates may not have the necessary skills or practical experience for the job market, particularly in industries like IT, engineering, and manufacturing.
• Emerging Technology Shortage: With rapid technological advancements, smaller companies may find it hard to source professionals with cutting-edge skills (AI, machine learning, blockchain, etc.).

3. High Employee Turnover

• Retention Struggles: Employees, especially young professionals, often see small companies as stepping stones, moving on to larger companies or those with better prospects after gaining some experience.
• Limited Career Growth: Small companies might offer fewer opportunities for career advancement, which makes retaining high-potential employees difficult.

4. Training and Development

• Lack of Training Programs: Many small businesses don't have the infrastructure to develop talent through formal training and upskilling programs, which limits employees' potential for growth within the company.
• Cost of Training: Investing in training and development can be financially burdensome for small companies. When employees leave soon after being trained, it compounds the problem.

5. Employer Branding

• Weak Brand Image: Small companies often struggle with employer branding, making them less appealing to potential candidates who may be unaware of their existence or their unique value propositions.
• Limited Recruitment Networks: They may not have access to the same recruitment platforms, industry networks, or placement cells that larger companies utilize.

6. Cultural Fit and Management Style

• Mismatch of Expectations: Many small businesses have more informal structures and decision-making processes, which may not appeal to all candidates, especially those with experience in larger, more structured organizations.
• Workplace Culture: The smaller workforce and lack of professional HR departments in many small companies can lead to issues with workplace culture, including unclear role definitions, inconsistent performance management, and communication breakdowns.

7. Compliance and HR Expertise

• Limited HR Support: Small companies often lack a dedicated HR team or proper policies in place for performance management, employee engagement, and legal compliance.
• Legal and Regulatory Challenges: Keeping up with labor laws, tax regulations, and employee benefits can be overwhelming for small businesses without the proper HR expertise, leading to potential compliance issues.

8. Limited Access to Specialists

• Challenges in Hiring Specialized Roles: Positions requiring specialized knowledge or high-demand skills (such as marketing strategists, data scientists, or supply chain experts) may be difficult to fill due to the limited budget and lack of visibility.

9. Work-Life Balance and Benefits

• Inadequate Benefits: Small companies might struggle to offer attractive non-salary benefits like flexible working hours, health insurance, or retirement plans, which many talented employees seek.
• High Workload: Employees in small firms often have to juggle multiple roles and responsibilities, leading to burnout or dissatisfaction over time.

Potential Solutions

While the talent problems are significant, there are ways Indian small businesses can overcome them:

1. Leverage Internships and Apprenticeships: Offering internships and apprenticeships can help build a pipeline of talent, while also allowing the company to train potential future employees.
2. Outsource Non-Core Activities: Outsourcing certain roles (HR, accounting, IT services) can allow small businesses to focus on their core operations while accessing expertise without having to hire full-time.
3. Emphasize Culture and Flexibility: Small companies can offer personalized work cultures, greater autonomy, and flexibility, which can be a strong draw for certain candidates.
4. Partner with Educational Institutions: Collaborating with universities, training institutes, or technical schools can create a sustainable talent pipeline.
5. Invest in Employee Development: Even with limited resources, offering mentorship, on-the-job learning, or partnerships with external training providers can improve employee satisfaction and retention.

By addressing these issues creatively, small businesses in India can better compete in the talent marketplace and secure the skilled employees they need to grow.

Corporate Peter Pan - Recruitment & Retention.

Corporate Peter Pan - Recruitment & Retention.

Most times recruiting managers are battling self-created problems like an ill-fitted recruit.......

Internal talent movement and succession planning are surely better recruiting options considering the cost and fit factor. Internally placed employees are more likely to fit better as compared to an external recruit and therefore the time taken to get to work would be considerably less. Despite the advantages, experts say that these recruiting options may fail to deliver if measures to ascertain their workability are not adhered to.


One size fits all

The beliefs that a star salesman would make an excellent manager and a finance wizard would be an effective finance head have no takers now. Earlier people got carried away by past performances and based promotions on the performance of an individual in a particular job. However, the tales of failed leadership and managerial feat are famous when a junior executive was promoted to the managerial level only on the basis of his performance in his previous job. Most times in such cases the appraiser fails to take into account the difference in job profiles of the two jobs and therefore makes his decision with a short-sighted perspective. This logic has failed enough times to let managers know that the only time a person has performed equally well in two jobs is when the job profiles of the two jobs and the competency and skill level required to execute it are the same. It is very rare to see the same performance output from a worker who gets promoted to the next level without additional inputs in the form of training.


This belief is echoed in the Peter Principle, stated by Dr. Lawrence Peter. According to this principle, a person would continue to rise in the organizational hierarchy unless he reaches a natural level of incompetence. The principle clearly states that every time a person gets promoted to a job that is one step higher in hierarchy, the individual will in all probability fail to deliver the same level of performance as he did in his previous role. The relevance of Peter Principle becomes obvious every time a manger makes a wrong decision and promotes his "go-getter" to a position that does not need a "go-getter" but needs somebody who can manage a bunch of "go-getters"! Thus, with Peter Principle at work every time, leaders and managers need to craft their decisions carefully.


Intuition and bias

Another pitfall in the process of right recruiting is intuition and its evil twin bias. These factors together can play havoc with the science behind recruiting and result in decisions that may be far from logic. Recruiting managers justify this by saying that it is humanly impossible to gauge every little nuance of human behavior and make inference on its basis. Hence, in such times it is the intuitive powers that come to rescue and help them make decisions. While it is not completely wrong to use intuition in the process of decision- making, it certainly is unfair to make decisions only n the basis of intuition. Similarly, we all have certain mindsets and beliefs (halo/horn effect). We associate a smart looking candidate with professionalism, skill and panache. However, this may not always be true. In fact many times looks can be sadly deceptive and can disappoint beyond reconciliation.


Besides the halo and horn effect (the practice of making a decision on the basis of a single good/bad incident), experts believe that casualness in the interview process too can lead to bad decision- making. A study on the conduct of recruiting managers in the interview process revealed that, many times the decisions tend to be based on insignificant aspects. These include the way the candidate talks, his family background, his interests and other unrelated attributes. While these attribute are worth learning, they certainly do not make an impressive decision -making pre-requisite. Hence, recruiting managers should get more professional and focus more on job-specific competencies and skills if they want their "peg" to fit in well.


The funnel effect

As a guide to scale skills and competencies needed for different jobs in different hierarchical levels, experts recommend the "funnel effect". The funnel effect underscores the changing skills and competency levels as one rises up the hierarchy . The rise is depicted by an inverted funnel, that also represents the fact that as one climbs up the hierarchy the skills and competencies get more specific .

Recruiting is a scientific process. Hence taking a mundane approach to it can ruin the entire exercise and result in some very damaging recruiting decisions. When recruiting managers sit across the interview table they have to be aware and alert of the pitfalls in recruiting and use their providence to overcome them.


Ref: TheManageMentor

Four Key Questions Candidates Should Ask Potential Employers

Four Key Questions Candidates Should Ask Potential Employers

Employer-employee compatibility must be a two-way street for an appointment to be successful over the long-term. To gauge compatibility, candidates should ask potential employers four critical questions during a selection process.

A significantly shrinking talent pool worldwide means that competition is often stiff for organizations trying to identify and retain peak performers. Organizations often invest in testing and assessment programs to ensure that new hires and internal promotions have the right "fit" with the company culture. However, candidates do not always think about whether a company culture is compatible with their own values and professional needs. Employer-employee compatibility must be a two-way street for an appointment to be successful over the long term.

As such, during the selection process candidates should ask potential employers, managers, and peers the following four critical questions:

1. How does this organization listen to employee feedback?

Unfortunately many organizations treat employees as nothing more than numbers -- and subservient numbers at that. Consequently, the answer to this question will reveal whether the organization values the wisdom and contributions of its talent pool, engages the employees, and/or instills a sense of company ownership.

2. How does your employee performance evaluation process work?

It may surprise you to learn that many companies do not have a `systematic employee appraisal process in place. Therefore, the answer to this question will reveal whether the organization is structured and consistent in its performance expectations. By understanding how your work will be appraised helps to identify clear expectations, which directly feeds the notion of job security, which is a crucial factor to all employees.

3. What opportunities are there for development?

Human resource is a concept that does not always have a succinct definition of renewable. By asking this question you are delving into the culture to understand if employees are viewed as investments or merely as replaceable resources. The answer to this question will help you determine if this company will provide you with the necessary tools to progress along your desired career path.

4. How does this organization reward talent?

Believe it or not, some companies reward employees who simply maintain the status quo and penalize employees who show initiative and talent. For example, we know of an episode whereby an employee took much time to provide unsolicited but constructive feedback on a piece of marketing material that was full of factual and grammatical errors. Instead of appreciating the employee's efforts in trying to spare the company considerable embarrassment and potential business, the organization largely reacted defensively and stopped including this employee in key interactions. Therefore, this is a potentially challenging question to an interviewer who is also a manager at the hiring company. You will also be able to ascertain how prevalent recognition is within the organization's culture, for example does recognition occur on a weekly, monthly or annual basis. The answer will reveal whether the organization is organized and committed about employee retention and professional development, as well as how it goes about it.

It is also important to note a fifth question for possible consideration: Can employees be themselves at this organization? Sometimes organizations demand that employees conform to management's skewed - or even downright counterproductive - definition of an "ideal employee." With this in mind, the answer to this pointed question will help to reveal management's expectations for employee behavior - that is, whether employees are encouraged to act as company "drones" versus act as individuals with unique personalities and perspectives to be shared and strategically leveraged.

Again, issues with skill set and lack of fit with the company culture are among the top reasons organizations disqualify candidates. Likewise, lack of recognition, advancement and fit with a candidate's value system are among the top reasons why candidates disqualify employers. For this reason, we encourage candidates to conduct due diligence on companies just like employers do with applicants during the recruitment phase.Come to think of it, all organizations should contemplate the four questions above if increasing morale, productivity and profitability are top priorities. A shrinking talent pool means that the onus is now often on companies to convince talented individuals why their time, devotion and energies should be invested in their organization versus their competitors.

Ref: Jim Houran and Whitney Harper

Getting Better at Recruiting and Retaining.

Cost effective Hiring and Successful retention in the corporate world is very essential today. For this reason companies are working on the areas of recruitment & retention to get more insights on the same. Some of the key findings are:

. Knowing the generation Y better will improve an organisation's chances of recruiting and retaining them

. But to know them organisations must move beyond perusing documented information.

The better you know your prospective candidates the better the chances of luring them. The logic is that simple. There is already a lot that organisations know about generation Yers. However, if the intention is to recruit more from this generation, the question to ask is, "What more can we learn about them?" The answer is critical to formulating an effective strategy-one that ensures a competitive edge.

This week's mailer will clue in organisations and their recruiters on the characteristics and quirks of generation Yers. This information should help them realign their existing strategy to recruit successfully and retain them.

Defining the 'Y' cadre

Commonly referred to as "Millennials", "Echo Boomers" and "Net Generation", generation Y constitutes those who were born from 1980 to 1999 and grew up in the 1990s and 2000s. A few well-documented and work-relevant characteristics of this generation are:

. They are more ambitious than the previous generation so much that sociologists call them the overachieving, overscheduled generation

. They like changing jobs, and earned the title "job-hoppers"

. They have great expectations from their workplace as, according to research, "they desire to shape their jobs to fit their lives rather than adapt their lives to the workplace". This outlook is a huge challenge to employers.

The above-mentioned characteristics are well-documented. In fact, most organisations have already realigned their recruitment strategies around them. But there are a few other quirks that are not so well documented but can have an equally huge impact on an organisation's strategy. They are:

Trait: Dependence on parents

Being the products of helicopter parenting, generation Yers find it difficult to wean off parents. This generation does not think much of moving back home after college. Less rebellious than their predecessors, most of them even let their parents decide on where they will work and for whom. That this generation job-hops is a well known fact, but what is undocumented is that their job-hopping is driven by the will to learn. Encouraged by their parents' advice to learn and grow from different experiences, the generation is willing to risk job security and fantastic salaries for the thrill of learning something new. Also the fact that they can fall back on their parents makes them greater risk-takers than their predecessors.

Tip: In getting the Yers to make career decisions, give them time to consult their parents. Encourage them to make those phone calls to their parents from the interview room itself.

Trait: In-box management

It might not appear as an advantage, but the fact that Yers choose to start their work day without a 'to-do' list actually makes them better 'prioritisers'. As a behavioural expert comments, "Baby boomers use their in-boxes and in-trays as to-do lists and go by them on a typical work day. However, Gen Y is sold on the idea of an 'empty box'". This means that what they do is not dictated by what comes into their in-box or in-tray but by what they feel is important. This gives them better control in deciding their priorities and also makes them conscious of managing their work activities based on priorities. In short, they do not work on a first-in, first-out basis but on the "most important comes first" basis.

Tip: Allow Yers the leeway to plan their day. Strict scheduling can frustrate them.

Trait: Women power

Yers appreciate gender equality and have little qualms about women surging ahead as earners. Generation Y women feel more empowered, go solo in making career and personal decisions, and feel less insecure at work. Another observation is that women take a back seat voluntarily when they decide to have children.

Tip: Think of flexible work hours and work-at-home options for new mothers.

Trait: Team spirit

Generation Yers thrive as teams. Probably the first generation to value the importance of team power, this generation appreciates how individual efforts at work multiply when combined with team efforts. So oriented are their efforts to work in teams that team-building and bonding initiatives are only reminders of what they already appreciate. Therefore, where they really need help is in developing their leadership potential.

Tip: Divide everyone into work teams. Even a one-employee function or department can be integrated into a large group.

Some of this information is probably already known but not accounted for as yet. However, what is essential is to be aware of these undocumented generational differences. Organisations must interpret this information to use it as a recruitment advantage.

Reference:
The ManageMentor