News Stop: Manpower problems for SMEs

Lately, there has been a lot of talk in Today about the difficulties faced by the small medium enterprises (SMEs). Looking at the trends of the articles, I sensed that there are two major issues which all SMEs in Singapore faces. The first is manpower and the second is branding. The challenge has always been to convert the “mama” shop bosses to think about expanding their business to the next stage. Here is an article from Today about this issue, and we will comment on how to deal with these issues.

From the article “Staffing woes weigh on SMEs” by Lee Ching Wern in Today Online, here are some excerpts on the article that we like to draw your attention.

Manpower issues have catapulted past perennial concerns like access to financing and operating costs to become the second biggest challenge faced by small and medium-sized enterprises (SMEs) here.

According to survey results released by DP Information Group on Monday, 37 per cent of the 1,000 SMEs polled cited manpower among their top three concerns, up from 28 per cent last year. Some 14 per cent indicated human resource problems as their biggest growth hindrance, double the number in the survey last year…….

Studies have shown that career prospects are the most important criterion people look for in a job, followed by workplace culture and remuneration. Also, there could be more opportunities to advance in an SME compared to an MNC.

SMEs may not necessarily have to compete financially with the MNCs for the right talent. There are other ways they can attract staff, said Ms Annie Yap, managing director of recruiting firm GMP Group.

Studies have shown that career prospects are the most important criterion people look for in a job, followed by workplace culture and remuneration. Also, there could be more opportunities to advance in an SME compared to an MNC.

In order to attract quality middle managers, SMEs can also offer creative share option schemes for the key employees.
“They can put in place long-term incentives to retain talent — for instance, stocks for a public company, or alternatives like phantom stocks and deferred bonuses for a non-public company,” said Mr Kwan.

Currently, many SME bosses use their gut feel when hiring.

“The typical style of an entrepreneur when he wants to select someone for a post is to say ‘When I see, I will know who I want,” said Mr Tan.

“This intuition has often served them well. But as their business grows, they may not always be able to depend solely on this,” he said.

It would serve the SMEs well to invest more resources in the screening and selection process. Having a rigorous selection process will ensure that the SMEs hire the right talent to be groomed.

It would serve the SMEs well to invest more resources in the screening and selection process. Having a rigorous selection process will ensure that the SMEs hire the right talent to be groomed……

SMEs should also adopt the strategy of grooming “raw talent” as they might not be able to compete with big companies with big budgets, said Mr Kwan.