SME IN FOCUS: FISME The Advantages Of Being Small Anil Bhardwaj (Secretary General, Federation of Indian Micro and Small and Medium Enterprises) on how empowered people can overcome SME handicaps |
 Q. You are a widely recognised authority on SME issues - tell us about your career journey.A. After completing MBA (in International Trade) in 1987, I spent nearly a decade in exports. I found it difficult to cope with the excessive foreign travel and searched for a more meaningful and challenging assignment. I joined FISME in 1996 when the organisation was reorienting itself in the wake of WTO. FISME’s need of internationalising SMEs and my urge to contribute provided the common ground which I am still building upon after 12 years. Q. What are the key issues that the SME sector has to focus on? A. Because of the risk of generalisation, it is difficult to summarise them, even for the sub-sectors: micro, small and medium. There is huge variance among products or sectors within the markets they operate. However, there are common issues related to size or scale. When you are small, cost of all of your inputs is higher. Secondly, you have limited capacity to withstand external excesses of either the supply chains or regulations. Thirdly, you have to ensure that your biggest advantage – capability to innovate and flexibility – is retained. Q. What about the HR issues? A. No enterprise has issues that do not concern people. They anticipate threat/ opportunity; organise resources to manage it; and, the benefits accrue to them. Fact is the smaller companies are capable of producing extraordinary results due to the enormous productive potential of their smaller teams. Dedicated, empowered and motivated people can overcome the handicaps of small size. Q. What are the areas of HR capability building in SMEs? A. To meet competition challenges, attracting and retaining people who are trainable and have scalable skill sets, is a prerequisite. Q. What tools do SMEs require to ensure this happens? A. I am not an HR expert and cannot be prescriptive. However, I have seen a large number of successful SMEs adopting practices that might be interesting for others. First is the attitude by which one appreciates the importance of HR. It happens when an entrepreneur has a vision. Second, successful entrepreneurs engage external experts, particularly of HR. Third, it is increasingly realised that the most educated, unemployed youth are unemployable directly, even MBAs and engineers. They are ‘rough’ or ‘unfinished’. As most SMEs do not have in-house training departments, new opportunities have emerged in the form of ‘finishing schools’. |
Q. What are the other critical HR issues facing SMEs today? A. At the lower level is the issue is of finding a trained person in a trade. There are not adequate and well functioning training schools. The gap between demand and supply is huge. In India we train people in 300 to 350 types of trade (electrician, plumber, etc.) - in Germany the number of trades is more than 3000. So most of the lower level staff here learns on-the-job; a very expensive and inefficient way. Also, most people are not educated enough to be trainable further. Next, because of sudden growth of IT, ITeS and financial services in middle management, the problem has been the mismatch of expectations and reality in terms of work and compensation. At higher levels, the issues are of affordability. Q. Why is there a need for SMEs to build their HR processes? A. The need is to compete successfully, today and tomorrow. Since the late 1980s, the barriers between flow of goods and services globally have been coming down. The 1990s democratised access to finance and technology as never before. That is why we have witnessed an unprecedented rise in competition. If all else is equal/near equal, the competitive edge would come from HR. Q. How can HR capabilities help raise capital? A. As the SMEs become more and more knowledge intensive, particularly at the stage of seeking venture funds or private equity, people are considered a great resource. Q. How can we gauge the progress of the SME sector? A. By looking at the prosperity of people around you! Only around 9 per cent of people are employed by the government or large companies; the rest of India is self-employed or employed by SMEs. Soon an SME Exchange will be developed for looking at the results of the larger segment of SMEs. Q. What factors can help become successful in this field? A. An SME can leverage its small size by being nimble-footed and innovative, and must overcome disadvantages by connecting to external resources for knowledge and strength. |
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