Talent Management in SMEs - Essay Sample

Introduction

Despite the economic significance of SMEs, talent management is under-researched in this framework. As typical characteristics of SMEs, liability for small and rare assets requires a particular concept and strategy to talent management in this industry. Limited talent management expertise in SMEs shows significant difficulties in gaining and maintaining talent. This literature review takes on human resource management (HRM) literature in small and medium-sized enterprises to place talent management and employee retention problems in a broader framework. This literature review also describes HRM and talent management networks and collaboration in sector nodes as a way for small and medium-sized enterprises to contend with more prominent multinationals in various modern spaces.

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With the transition to a knowledge economy, there seems to be a significant increase in the amount of small and medium-sized companies. These small to medium-sized companies (SMEs) are autonomous organizations with a population of up to about 500 individuals, even though the concepts of SMEs differ. This rise is linked to the present need for innovation as the pushing power behind this era's knowledge society. The amount of businesses in a collaboration, franchise, or comparable structure with a worker of up to 500 is growing progressively.

In the North American framework, the current TM literature relies heavily on worldwide multinationals (Thunnissen et al. 2013, 15). There has been less emphasis on small and medium-sized businesses (SMEs) and very little on Europe's hospitality industry, especially in the UK. This requires more study to complete this gulf, given that UK hospitality companies are mainly SMEs. SMEs are gradually seen as major suppliers to the global economy and are significant generators of jobs. There were 5.4 million SMEs in 2016, accounting for over 99 percent of all companies and 60 percent of private-sector jobs in the UK (Parliament, House of Commons, 2016, 19).

It should be recognized that handling human capital in small enterprises is distinct from managing big corporate organizations (Cardon and Stevens. 2004, 76). Because of their restricted volume and poor accessibility, SMEs may experience more hiring problems and have smaller funds for official HR strategies or schemes (Jameson. 2000, 31). In a research by Alonso and O'Neill (2009, 3) with 21 small and medium-sized hotel establishments situated in a college town, it was discovered that while keeping a secure staff is one of the organizational difficulties these companies encounter, only a few have established measures to tackle staff sales and associated issues-some of which include offering a pleasant atmosphere, mobility, and coaching. This research indicates that some SME owners may not realize the severe consequences of not participating effectively in the management and development of skilled staff.

Many small companies do not create specific conventional HR processes (such as a manual for employees), which are often normal in big organizations (Henricks, 2006, 61). With so many problems related to handling the company to be addressed, human resource problems are often driven to the bottom of the preference queue or do not occur at all there. Heneman and Tansky (2002, 14) provide proof that small businesses have strategic HR problems that are distinct from those of big companies. Small companies are also unable to afford a different human resource department or staff dedicated solely to solving these problems (Jameson, 2000), abandoning the proprietor or manager with liability. Managers recognize the significance in their business of creating unique and individualized relationships with staff. The perception that the organization invests in work relationships, particularly family firms, is probably the reason why precious team remains faithful to the organization. Entrepreneur-managers seem to concentrate on intra-organizational, person-to-person communication, and the growth of employee social engagement. Being responsive to workers ' performance of lives and health appears to motivate skilled staff to reciprocate with dedication and remain intent. Individuals often abandon the organization to follow distinct professional paths, but small and medium-sized enterprises do not merely view exiting as adverse. They promote employees to push forward and acquire abilities in the expectation of eventually returning. Maintaining a consistent-potential alumni connection finds it simpler to transmit fresh possibilities, providing the owner-managers a stronger opportunity to attract skilled staff home into their organizations.

In medium-sized businesses in Spain, Valverde et al. (2013, 15) recognized several features of TM. It was revealed that while the TM terminology was not known to executives, many of these organizations already had TM procedures in position. This possibly suggests that substantial TM studies may have involved organizations deliberately adopting more formalized TM methods as a portion of the sampling process. However, there is a challenge in establishing equilibrium between conventional TM methods and the casual culture of these organizations for many SMEs, particularly in the hospitality and tourism sector (Jameson, 2000, 25). Indeed, according to current literature, a more informal, less structured, and pseudo-bureaucratic type of leadership characterizes many larger companies (Dundon & Wilkinson, 2009, 12).

Nevertheless, Timming (2011, 9) asserted that small businesses are not inherently habituated to hire casual employee procedures. Numerous variables are at stakes, such as manufacturing or sectoral eccentricities, organizational culture, labor peculiarities, resource shortages, as well as an absence of understanding between many owners-managers about what strategic leadership methods mean and the effect these methods can have on organizational results. This highlights a few of the complexities in the study of TM procedures in SMEs, primarily owing to problems related to the frequent simplistic labeling of SMEs as a homogeneous community.

SME monitoring appears to be focused on private oversight of the owner-manager (Bridge, O'Neill & Cromie 2003, 26). In an attempt to examine their views on TM, Festing, Schafer, and Scullion (2013, 19) performed a study with 700 Chief Executive Officers (CEOs) and SME owners in Germany. Based on the information gathered from the questionnaire, it was disclosed that about 40 percent of the businesses interviewed had recruitment CEOs or holders, indicating their dominant position in recruiting choices. Additionally, Festing, Schafer, and Scullion. (2013, 22) Discovered that the procedures differentiated based on the magnitude and form of organization, with the more prominent sector, business and retail-oriented SMEs investing more strongly in TM operations, including early detection of youthful potential, preparation, and growth of employees, as well as continuity and professional development. This may be a sign that there may have been a lack of formalized HR or TM procedures due to smallness or asset scarcity liability.

By in cooperating a multiple case study strategy, Cui, Khan, and Tarba (2016, 43) analyzed how the notion of TM and the leadership and maintenance policies taken by these SMEs were described and grasped by executives of four Chinese SMEs in the service industry. It was disclosed that executives took distinct opinions on the concept of skill and TM. Overall, it was hard for executives to conceptualize TM and deemed that TM was identical to HR features. However, the four instances of cases indicated active participation in their workers ' appeal, promotion, and preservation. Some of the techniques used include offering conducive work settings, job development, and excellent pay systems. Training classes were provided to assist in improving the abilities of staff to create a skill.

The hypothesis that expenditure on staff with vital and useful abilities will produce higher yields in terms of profit and productivity is central to the exclusive strategy. A unique view is probably a more cost-effective option for handling and creating skill in the event of SMEs owing to resource constraints. As Krishnan and Scullion (2017, 14) noted, by concentrating on vital individuals, there is not only a danger of undermining the morale of the bulk of the workers who are not recognized as skill, but it may also not match into the casual work culture, which may be the primary job appeal for SME staff. Empirical studies, nevertheless, as mentioned above, seems to indicate that SMEs can find instances of both inclusive and exclusive methods for talent management and employee retention.

The lack of understanding of the TM notion and the lack of formalized TM procedures do not merely indicate the absence of policies for management and leadership and growth by owners of SME's. Even if job leadership methods are more casual, they can still be efficient, as Valverde et al. (2013, 17) illustrated in their research. Nevertheless, an adequate and more systemic TM system may be anticipated to lead to higher organizational achievement, allowing the concept of TM to be adjusted in the context of SMEs (Krishnan and Scullion, 2017). A focus group with representatives of the Board of the Scottish Tourism Forum led by Maxwell and MacLean (2008) proved that TM has significant capacity to lead to improving the sector, in which the alleged advantages include increased productivity, increased employee retention, and dedication, increased knowledge base, decreased labor productivity, as well as enhanced workplace picture and brand. The research has also shown this to some small company managers.

Several surveys indicate that total employee retention costs (i.e., voluntary quits) range from 150% to 250% (Henricks, 2006, 29) of the worker's weekly wage. This involves all the expense of hiring and coaching, not to discount the firm's public opinion, the efficiency, and output of employees, and several other variables. The more skill an individual gives to the business, of course, the more costly it is to substitute that individual. This may be particularly valid in fast-growth companies where human capital is most often the profitable benefit (Hayton, 2003). Moreover, for small businesses, the pressure to keep critical employees is even more significant because they usually cannot deliver the same quantity of wages, advantages, or progress possibilities that are accessible in big businesses (Henricks, 2006, 21).

Losing even one valuable worker has broad implications and eventually may undermine attempts to achieve organizational goals. Small businesses that are development-oriented are particularly susceptible. Frazee (1996) revealed on the research of 434 fast-growing business CEOs and discovered that 47% said their absence of qualified employees was an obstacle to the development of their businesses. If we believe that companies strive to develop and seize market dominance, preservation of employees becomes a vital goal of human capital. They do not drive most staff to receive wages, rewards, and benefits, and (Henricks, 2006; Smither, 2003, 11). Key aspects to help create any business a healthy location to the job include: fair treatment, versatile hours, possibilities for significant donations, possibilities for growth and development of skills, a favorable job climate and culture, and regular leadership reviews (Arthur, 2001, 9)

It is just that our community expects a decent salary and advantages and is easily accessible (Prewitt, 1999, 2). What seems more significant than earning or advanta...