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Role of Human Resource Management in Micro, Small and Medium Enterprises (MSME) in India



Role of Human Resource Management in Micro, Small and Medium Enterprises (MSME) in India

Role of Human Resource Management in Micro, Small and Medium Enterprises (MSME) in India

Human Resource Management (HRM) functions, practices and actions are increasingly becoming imperative, considering the increase of the knowledge based economy. Human resources in any venture, whether small or medium constitute a vital area of study. Careful human resources management creates good opportunities to certify efficiency in the production process of goods and services that assurance a satisfactory level of living in society. If managed effectively and efficiently, human resources can play as a significant role in realizing the objectives of the venture as an integral source. MSMEs, substantial contributor to India’s GDP, which employs 40% of country’s workforce, pay less attention to human resource management and put more attention on day to day business operations. On one hand, the rise of skill based economy increases the importance of human resource management function while on the other hand it is ignored by MSMEs. HR is not core for these small firms however, as the size of firm increases human resources becomes important and to change the level of dimension it becomes necessary also.

The other side of the spectrum is that even if the MSMEs want to give due importance to the Human Resources, are unable to attract the right talent to manage the function who could lead the organization, on account of lack of BRAND PULL of the organization. The adventurous HR Professionals are also not willing to join these MSMEs as they are not sure of two things one meddling by the owner and level of empowerment to the function said Dr. Rajesh Mohan Rai, HR Strategist, Business Coach & Facilitator An HR professional many a times may end up getting questioned on the productivity being offered by them especially when the questions are asked by the management of a small factory pretty much affected by the present satiation. The metrics for the same even though they exist are still not much in vogue in smaller organizations. Does this mean a smaller organization can do away with this function? Probably make it a secondary function to the more primary ones of Finance, Operations & Marketing.

In this era where India has emerged from the shadows of being an economy heavily dependent on Agriculture, it is pertinent to understand what drives this economy? As Hemingway put it, The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. Since our economy is not burdened with either of these unlike Venezuela or the US, we need to understand that our economy is held together by not only giants like Tata, Reliance, Wipro, Adani or Mahindra; it is held together by your neighbourhood IDC or SEZ which is populated by the ever-growing MSME sector buoyed by the Start-up India & Make In India scheme said Dr. Sheetal Nair, Corporate Head, DSS Group of Companies. MSMEs nowadays face the double challenge of resource constraints on one hand and the requirement of highly trained employees on the other. External uncertainty, the typical characteristic of MSMEs, adds up to the woes. This cumulates the need for effective HR practices in small firms. Small firms are also considered as less specialised than large and HR practices are still considered to be emergent rather than fully developed because relatively little focus has actually been placed on the HR Practices.

Human Resource Management (HRM) is best considered as range of policies which have strategic significance for any organisation. HRM is typically used to facilitate integration, Employee Engagement, flexibility, and quality of work life as well as meeting broader business goals like changing organisation values, productivity and delivery mechanism. Nowadays, irrespective of small or large organisation, as technology and capital has become commodity in the market, the only thing left really to distinguish firms are skills in managing human resources and that is on which an organisation can gain competitive advantage added Dr. Rajesh Mohan, HR Strategist, Business Coach & Facilitator It is pertinent to let go off the ideology that HR is a support function only & become a business partner. One can probably write a thesis on this subject but to put it short let here are 3 factors wherein HR cannot just make a difference but also drive the business i.e. Workforce Planning, Benchmarking Compensation & Benefits, Evolving Performance Management Dynamics added Dr. Sheetal Nair, Corporate Head, DSS Group of Companies.

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