Approaching HR Management In MSMEs

    Without its employees, what would an enterprise be?

    A successful project requires a motivated staff to carry it out. And one with the necessary set of abilities. This is valid for both an SME with 25 hardworking individuals and a project within a business-like Microsoft with 150,000 employees. The prospects of success are minimal without the proper team that is prepared to put in the work. As a result, human resources play a key role. By ensuring the appropriate people are in the appropriate roles at the appropriate times, we play a critical role in assisting the business in achieving its goals. Our responsibility is to maintain employee health and engagement.

    The HR role is just as crucial in small and medium-sized businesses as it is in large ones, but it isn’t often treated with the same amount of professional rigour. If you want to know how to handle human resource management (HRM) in small and medium firms, keep reading. Larger firms may, of course, also pay attention.

    Human Resource Management: What Is It?

    In a nutshell, HRM is a strategic method of managing priceless resources known as people. The ultimate goal is to support the company’s employees in achieving sustainable growth.

    HR managers are entrusted with resolving problems and offering advice and direction to other employees. HRM duties include:

    • Finding, luring, employing, and integrating fresh talent are all aspects of recruitment.
    • Supporting employees’ training and growth through training
    • Creating the groundwork for an atmosphere where employees may flourish, grow, and develop while also sensing others’ support and appreciation is known as “employee experience.”
    • Retention methods are proactive measures to keep personnel.
    • Compliance is making sure a company abides by employment regulations.

    Yes, HRM involves some administration, but it’s crucial that administration—in crucial areas like payroll and benefits—is managed well. Employees have this as their minimal expectation! However, the development of HR nowadays is more analytical than administrative. From a people standpoint, it’s about leveraging data to direct organisational growth.

    Many administrative tasks may now be automated or handled by employees themselves thanks to the democratisation of HRMS and other technology, freeing up people in charge of HR to focus more on strategic planning and innovation.

    How Do Small and Medium Businesses Handle Human Resource Management?

    Although HRM’s overarching objectives are the same across all businesses, the strategies used to achieve their change are based on factors like size and resources.


    HR departments with expertise in the many activities are necessary for large firms. Typically, one to five individuals handle HRM in smaller businesses. The CEO, operations manager, HR manager, people and culture manager, or internal recruiter might divide the responsibilities. Small firm HR departments typically won’t have the same degree of resources at their disposal as those in major corporations. They must accomplish more with less, and HR managers must use some creativity to select appropriate tactics and tools. Most importantly, all of these should be done keeping in mind the budget. 


    As mentioned above, smaller teams mean that HR managers at SMEs are more likely to be burdened with a variety of duties—oftentimes duties that aren’t even HR-related—than their counterparts in bigger organisations. According to research on Portuguese SMEs, HRM in small businesses indicates a “continuous informality.” For HR professionals that like change and taking on new jobs and responsibilities, this is fantastic. In a smaller company, there is typically more room for innovation, and it is the responsibility of those in charge of HR to set the groundwork for organisational development.

    Administration to strategy

    The human resources division will expand together with your business. It ought should, at the very least. An organisation may occasionally expand and engage an HR professional to handle only administrative duties and maintain compliance. Along with these tasks, they’ll likely be given recruiting, personnel management, financial management, and perhaps even basic office administration.

    The strategic value that a focused and skilled HR team can provide, however, is lost if HR is underfunded and the department is overworked. Your whole staff will benefit from your investment in quality HR personnel and procedures. They’ll support your executive team in scaling your organisation and identifying crucial requirements to achieve overarching business objectives.

    You could decide to outsource the administrative tasks and engage someone whose main responsibility is to develop people, procedures, and the culture you desire. Increasingly, HR experts are taking an agile approach to their work and serving as sort of product managers for the business culture. Gather input, test a new idea on a small scale, get more feedback, make adjustments, try it again, or roll it out to the entire firm.

    What to Focus On for HRM in Your Small or Medium-Sized Business

    In some manner, your work is tied to HR if you are a leader inside a company and are in charge of managing people. Even though each business is unique, there are some best practices that apply to everyone, regardless of how your HR department is set up. 

    Don’t be just reactive; be proactive: Take substantial actions

    It’s possible that HR is viewed as red tape—a costly administrative burden that hinders sales and profits. Because of this, it frequently goes unnoticed until the organisation needs to dig itself out of a hole. Organizations become “HR shy” as a result of this impression and are hesitant to make the right investment. It’s also the reason why, if you’re an HR professional reading this, you might concur that it’s a “thankless job.”

    However, making an early investment in HR will pay off in the long run. Being proactive rather than reactive is the key here. Before it’s too late, consider other people’s needs since failing to do so would result in uninspired and maybe unhealthy costs.

    If you’re an HR professional reading this and you’re dissatisfied with how your company handles HR, you can be more than simply a paper pusher! Learn about many aspects of the company and demonstrate your worth by offering people-centric solutions to business challenges.

    Establish a Strategic Goal

    Setting clear strategic goals for the HR department is crucial whether you’re recruiting an HR professional to do more than simply administrative tasks or if you’re the one being employed to manage HR. This entails first laying out a vision and statement that connects your desired culture with your company’s aims and basic values. HR will receive greater support, funding, etc. as it begins to be seen as a strategic, money-making division inside the company.

    Establish and uphold the company’s values

    The values of your organisation serve as a set of guiding principles that have an impact on both strategy and culture. They assist teams in cooperating to achieve a single corporate objective. Just what your team values will do; they don’t need to be very distinctive. A small team has the benefit of making it simpler to get opinions from the workforce over what these values need to be. Opening up this process can result in workers that are considerably more committed to the goals of the company.

    While your values are established, it is HR’s responsibility to make sure they are respected and taken into account when doing tasks like hiring and employee recognition.

    Develop and Share Your Roadmap

    It’s crucial that you develop an HR roadmap. The team members will be able to see the kinds of projects you’re working on and the value you believe they’ll contribute, not just for your personal advantage. Not every choice your HR staff makes will be well-liked, particularly if it requires changing “the way things are generally done.” It’s crucial to gain employee buy-in by outlining the rationale behind any improvements you may make, taking the time to address any concerns, and showcasing the advantages of your new procedure or strategy in the long run.

    Additionally, regular and open contact with staff members paves the way for a collaborative environment in which staff members are empowered to share their ideas and feel heard.

    Take Regular Feedback

    Building a better employee experience requires gathering feedback, both positive and negative, through tools like surveys, suggestion boxes, town halls, and performance assessments. This is a key component of the earlier metaphor I used, “HR as a product manager.”

    Create A Stable Performance Management System

    Employees value (excellent) performance management because it helps them understand what they’ve accomplished and what they still need to improve, regardless of the size of the team. This goes beyond merely the yearly performance evaluation. As much as possible, work toward implementing a continuous performance management approach with frequent feedback that enables managers to take on the role of coaches and mentors. Additionally, it’s crucial to incorporate development and career planning into this.

    Spend money on training and growth

    Performance management and training and development go hand in hand (T&D). Due to a shortage of funding, SMEs are less inclined to invest in T&D. However, employees may find themselves fulfilling tasks, particularly management ones, in smaller businesses and startups without any prior training. Even if it’s only time for employees to educate themselves, setting aside resources for T&D will 1) help them accomplish their jobs more successfully and 2) boost their motivation. Utilize the funds to develop alliances with authorities, such as coaching services or outside training resources.

    Create some policies and collaborative documentation

    It will save time for everyone in the long run if you take the time to develop standardised policies and procedures around fundamental tasks like scheduling time off and managing expenses and benefits as your business expands and the trend toward remote and international workforces continues to grow. These may be reposted in easily accessible shared office programmes like Slite or Notion.

    Create A Successful Onboarding Process

    Since hiring new staff costs money, it’s critical to provide them with a positive first experience. No matter the size of the business, it’s important to spend time and effort creating an onboarding process that will enable new recruits to settle in more quickly, be motivated for their new position, and enhance the probability that they will stay.

    Your onboarding programme should ideally cover the first 90 days after the new hire signs the offer letter. Prior to joining, our onboarding tool at Ordergroove gives individuals engaging tasks to complete that will help them get to know the organisation, meet their colleagues, and share information about themselves.

    Final Words: Accept technology and use it to your advantage

    HR technology used to be solely available as enterprise solutions to major enterprises. However, there are many manufacturers offering cost-effective cloud-based solutions to the SME market today. Human resource management systems (HRMS) may assist with procedures like performance management and help you handle the administrative side of HR. Typical traits include:

    • Managing time and attendance
    • Mechanisms for tracking applicants
    • Administration of benefits and compliance
    • Forecasting techniques
    • Timesheets
    • Onboarding
    • Worker scheduling

    Contact Us

      Your Name

      Your Email

      Contact Number



      Latest articles

      Related articles