The Importance and Impact of Human Resources on Small and Medium Sized Businesses

HR software

Human resources management is highly sensitive to change of any kind, perhaps more than any other function. This holds particularly true for small and medium enterprises because they are, more often than not, populated by hidebound old-age employees. For such people, changing with the times does not come easily and the change management methods and techniques employed by the HRD in such organizations has to take their rigidity in stride, while simultaneously executing any comprehensive business and process reengineering procedures.

Here, it is prudent to understand that the SME (small and medium enterprises) sector is the very lifeblood of the Australian economy and that is why the effective management of their man power resources at any and all stages of the organizational transition are essentially fundamental to the achievement of highly sustainable performance. This applies to not just their respective departments, but all across the length and breadth of the organisation.

However, many companies tend to see it as a really huge commitment in terms of both time and effort, and sometimes even as an imposition of sorts. It has been seen that in most cases, if an organization has less than 50 employees, the management prefers not to have a standalone HRD in the first place.

But that is generally because the owner and the managers have not been able to, or have not bothered to acquire the management training that they would have otherwise gotten had they worked for a spell of time in a much larger business organization. This issue is more prominent in old family-owned and run business as opposed to more decentralized organizations.

Such organizations are highly focused on sales and profits alone and generally do not focus on their people-related issues until it is all too urgent to do so. Then, they suddenly realise that at least for ‘firefighting purposes’ they need an HR department, as soon as possible.  It is also important that a comparatively more proactive approach should be used, since many small businesses tend to be traditionally shy of HR practices.

Nevertheless, overcoming such shyness can turn out to be of a really huge benefit quite often. Really large companies tend to strive for an element of consistency, but many small scale employers usually opt for excellence. That is why they not just want but actually need their staff members to go the proverbial extra mile.  In fact, this is their key differentiating factor and sustainable competitive advantage. Ultimately, if they are not able to do so, they will most certainly not be able to compete against the larger companies. The latter can easily use their economies of scale to produce the same products at considerably lesser rates. Here organizations such as Employment Innovations HR services (EIN) come into the picture to impart just the right range of training and motivation to ensure that the workforce performs to its full potential.

The is where the HR function can come to the fore. It can easily create a better and more efficient workforce through both training and motivation of the employees of the organization.