Role of Human Resource Management in Micro, Small and Medium Enterprises (MSME) in India

  • Today, Human Resource Management (HRM) functions, practices and actions are increasingly becoming imperative, considering the increase of the knowledge based economy.
  • Careful human resources management creates good opportunities to certify efficiency in the production process of goods and services that assurance a satisfactory level of living in society. If managed effectively and efficiently, human resources can play as a significant role in realizing the objectives of the venture as an integral source.
  • “MSMEs, substantial contributor to India’s GDP,  pay less attention to human resource management and put more attention on day to y usiness operations.
  • On one hand, the rise of skill based economy increases the importance of human resource management function while on the other hand it is ignored by MSMEs.
  • HR is not core for these small firms however, as the size of firm increases human resources becomes important and to change the level of dimension it becomes necessary also.
  • The other side of the spectrum is that even if the MSMEs want to give due importance to the Human Resources, are unable to attract the right talent to manage the function who could lead the organization, on account of lack of BRAND PULL of the organization.
  • The adventurous HR Professionals are also not willing to join these MSMEs as they are not sure of two things one meddling by the owner and level of empowerment to the function.
  • An HR professional many a times may end up getting questioned on the productivity being offered by them especially when the questions are asked by the management of a small factory pretty much affected by the present satiation. The metrics for the same even though they exist are still not much in vogue in smaller organizations.
  • MSMEs nowadays face the double challenge of resource constraints on one hand and the requirement of highly trained employees on the other. External uncertainty, the typical characteristic of MSMEs, adds up to the woes.
  • This cumulates the need for effective HR practices in small firms. Small firms are also considered as less specialised than large and HR practices are still considered to be emergent rather than fully developed because relatively little focus has actually been placed on the HR Practices. Human Resource Management (HRM) is best considered as range of policies which have strategic significance for any organisation.
  • HRM is typically used to facilitate integration, Employee Engagement, flexibility, and quality of work life as well as meeting broader business goals like changing organisation values, productivity and delivery mechanism. Nowadays, irrespective of small or large organisation, as technology and capital has become commodity in the market, the only thing left really to distinguish firms are skills in managing human resources and that is on which an organisation can gain competitive advantage.