The Technology Promise For SMEs Development

The Technology Promise For Small And Medium-Sized Enterprises (SMEs)

The small enterprises represent a key segment of any economy. It also represents a large portion of the workforce both at the leadership level as well as the operating level. Small enterprises face capability and competency issues at all levels. A small organization does not present an “HR brand,” and thus, they are not able to attract and retain the right talent. In such a situation, upgrading the available talent to the level of desired performance is the only way these organizations would survive and grow. Compared to small enterprises, corporates have a systematic talent development activity where the talent need is identified, assessments are done, the gaps are identified, and corrective inputs are provided.

However, in the case of small enterprises, none of these steps are taken up. In spite of such large market potential, how come there are very few solutions available to small enterprises to fill the talent gap?

Challenges To Training Faced By Small And Medium-Sized Enterprises (SMEs)

The nature of the SME landscape might give us some clues as to what affects their talent development. There are two major factors that work in conjunction with each other—the size of SMEs and the wide variety of training needs. Firstly, the small size of SMEs means that creating a customized solution for a smaller workforce is expensive in terms of per participant cost. If a generic solution delivered to multiple clients is to be considered, then that entails much higher marketing and branding costs.

The shortage of manpower in SMEs is a further challenge. Many SMEs operate with a limited but very critical workforce. This critical staff gets work done through other operating people who may have some constraints due to which they continue working with SMEs and do not get placed in large companies. These constraints can be in terms of poor abilities or personal constraints such as location or family constraints, etc. In any case, the organization depends too heavily on a few critical resources and is reluctant to spare them for the time it takes for a skill upgrade.

The second factor at play is the wide variety of needs. In a given region, if there is a concentration of SMEs working in a similar domain, the likelihood of creating a common training solution exists. For example, a number of small enterprises acting as vendors and sub-vendors may be concentrated near a large automobile manufacturing plant. Usually, however, the canvas of SMEs is filled with enterprises working in various domains and sizes. As a result, the marketplace for training consists of a multitude of cost-sensitive customers with specialized needs.

Approaches To SME Skill Development

With the above challenges in mind, what are the different ways and means to provide useful and cost-effective inputs to these customers? I spent a few years researching the competency development of SMEs. My findings over this time indicate that we have to take up a hybrid approach in skill development for SMEs. This approach addresses the challenges in people development by enlisting the help of technology as well as the environment.

Let us take a look at the technology first. This is where eLearning shows a wonderful promise. eLearning modules are advantageous in terms of convenience as well as cost. The greater convenience available is obvious. With 24x7 availability anytime anywhere, the SMEs can ensure that the owner, as well as other staff, can sneak in some time at regular intervals for training. eLearning also provides the added benefit of repeated viewing which may be essential due to skill gaps in the input.

The cost advantage, however, tends to become an obstacle. Although the number of SMEs is very large, the target audience is not monolithic. Each SME represents a part of a larger group. eLearning modules can be delivered to a smaller group for even as low as a single license for a very tiny company. However, the eLearning service provider has to invest heavily in content development. But if the developer aims to provide cost-effective solutions, it becomes essential to then find a larger audience. Consequently, there is a bigger risk involved in terms of their business model.

How do we address this risk? That is where the environment can help us. The environment can provide a trigger for people development. For example, a large organization can influence their vendors to upgrade their skills by mandating, sponsoring, and supporting such an activity. Such an organization can also provide subject expertise. This kind of skill upgrade can aid the larger organization in terms of improvement in the quality of input as well as better integration amongst vendors. I have observed that some large organizations insist on training their vendors in the area of safety, quality, and operational excellence (such as lean manufacturing). However, any focused attempt towards leadership development is still lacking.

Another avenue to reach out to a large number of SMEs is the associations of industries. Such associations can help identify the collective needs of the SMEs involved with them. Thus, the eLearning modules that are made with their inputs become relevant and useful. The associations can also lend a hand in marketing and can act as influencers. In order to stimulate the need for training, it is important that a ‘buzz’ is created, whereby the SME owner starts considering people development seriously. Associations can also mobilize funds through sponsorships and, thus, reduce the cost of development.

Without such support from the business ecosystem, the SME marketplace is almost like a B2C market place. Marketing in a B2C space requires a good distribution network, effective branding and a lot of patience. This is the reason why the SME market is not attractive to many learning service providers including academic institutions. However, it is now high time to think out of the box and use technology to arrive at exciting solutions for this group.