SMALL and medium-sized enterprises (SMEs) play a significant role in Singapore's economy. As 99 per cent of all enterprises are within the definition of SMEs, they are a vast majority of the business entities in Singapore. With a dynamic job landscape, organisations need to evaluate their talent management strategies regularly in order to stay competitive in the rapidly changing environment.
Given that the Singaporean talent pool is at a premium and constantly evolving, it is paramount that SME leaders spend their efforts wisely when culling and developing for talent and depth.
As SMEs employ up to 70 per cent of our workforce, special attention should be paid to the way organisations respond to technological shifts, employee engagement and fulfilment practices. In addition, the advent of workforce agility requirements and on-demand learning needs, all put further pressure on traditional business models that SME leaders should plan ahead for.
Furthermore, compared to large corporate entities, SMEs tend to have higher rates of failure. According to studies, approximately 50 to 70 per cent of SMEs fail within the first 18 months. There is therefore a need to strengthen the competitiveness of SMEs in order for them to face not only local competition, but also competition from regional and international sectors.
Recognising the need, the Singapore government has rendered generous support and committed substantial resources to ensure the resilience of SMEs.
For instance, grants such as the Productivity Solutions Grant (PSG) will support SMEs by providing up to 70 per cent of qualifying expenses for SMEs who seek to adopt off-the-shelf technologies with a defined scope.
And, with effect from the fourth quarter of 2018, the existing Capability Development Grant (CDG) and Global Company Partnership (GCP) schemes will be combined into the Enterprise Development Grant.
This will provide more holistic support to SMEs who can make use of the grant to increase their competitiveness on a global level.
With strong government support and their own entrepreneurial endeavour, successful SME leaders are aware that achieving success in their business is a journey, not a destination. A savvy SME leader also knows the value of people, where a mix of talent and 'fit' will help the business strive.
The first quarter of 2018 has just come to a close and we have observed some HR trends that show how organisations are placing greater emphasis on talent this year. As a talent-focused organisation, we are also witnessing more organisations spending time to establish talent management strategies.
When allocating limited resources, many SME leaders commonly apply the mindset that talent management is not a priority at the forefront stage of an organisation's growth journey as they do not reap immediate benefits from investing in talent.
Ironically, when SMEs put resource constraints ahead of optimising talent recruitment, training and development, the net effect is that the focus is on short term keeping day-to-day operations smooth, rather than to boost medium and longer term business growth.
So, what makes a good talent management strategy for SMEs?
1. The right fit is the most important
Fit is the extent to which a person's natural talent aligns best with his or her context - the expectations, goals, cultural values and other factors that define that person's role on a team and within an organisation. Fit goes hand in hand with talent as the foundation of people's growth, which in turn translates to business growth. Singapore has a diverse workforce, and a deliberate approach to identify, engage, and retain talent will yield great returns. Once the right fit is identified, organisations can expect a greater return on whatever level of investment they make in an individual's talent.
2. It's no longer just about the money
Today, millennials, defined as those born between 1979 and 2000, make up a large component of the workforce in Singapore. Unlike previous generations, millennials are not in a job for the money. Studies have shown that millennials are more driven when the work they do has values and purpose that are in line with their own. To that, organisations need to learn that it is important to select people who fit, whose natural values, beliefs, and behaviour align with those of the organisational culture.
3. Scientifically assess talents
The ability to scientifically measure what is highly predictive of leadership talent exists. In terms of leadership talent, each of us possesses unique, hard-wired areas of leadership potential. We differentiate from one another due to these natural tendencies called themes. Knowing your areas of greatest potential offers each of us the ability to reach our fullest capacity. Softer leadership themes yield less growth potential; conversely, greater leadership themes yield more growth potential.
4. Think in the long run
The SME sector in Singapore is growing in a fast-changing business landscape, and it comes as no surprise that employee turnover rate is likely to be high. This is why the importance of bench-strength building and succession planning cannot be understated. For SMEs, sometimes succession planning is paradoxical: we know it's important, even critical to do, but we do not make the time to do it. With that, what organisations can do is to turn to analytical tools to assess future potential. This way, they can account for and align to a person's skills, behaviours and ways of thinking to next-level roles.
- The writer is Managing Director of Talent Plus, Asia Pacific