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Developing HR for SME
20th June 2015
SME Department, Yangon
Professor U Aye Kyaw
Principal (MHR)
Program Director (CSIS)
Honorary Fellow (ABE, UK)
Fellow (Chartered Management Institute, UK)
Fellow (Cambridge Academy of Management, UK)
Chairman, Myanmar Tourism HRD Association(MTHRDA)
I. IMPORTANCE OF SME
Professor U Aye Kyaw (Principal, MHR)
In The World
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99% of the world’s economic enterprises are SMEs
SMEs account for 55-95% of country GDP
More than 50% of the world’s labor force is employed by SMEs
Alleviation of Poverty, creating lots of employment
In US:
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80+% employment is by SMEs with less than 20 employees
In UK:
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99% of private sector businesses, 59.3% of private sector employment
In Europe:
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99% of all enterprises in Europe
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Contribute more than two thirds of the European GDP
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SMEs provide 75 million jobs in the private sector
I. IMPORTANCE OF SME
Professor U Aye Kyaw (Principal, MHR)
In Asia Pacific region:
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SMEs are 90% of all enterprises
48% employment is by SMEs
In China:
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9.7million SMEs
60% of GDP
Taxes: 50%
Exports: 78%
Innovations (e.g. patent): 66%
Employment: 80%
In India:
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3.5 million SMEs (80% of total enterprise)
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50% of Private Enterprise Employment
• 34% of total exports
• About 8000 products
II. TYPES OF RESOURCE
Professor U Aye Kyaw (Principal, MHR)
RESOURCES
Tangible
(Hardware)
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Human Resource
(People)
Financial Resources
Physical Resources
Intangible
(Software)
1.
Human Resource
(People)
2. Information
3. Time
III. IMPORTANCE OF HR
Professor U Aye Kyaw (Principal, MHR)
Helps the company achieve its objective
Attracting employees, and maintaining employees effectively
Facilitates professional growth
Fosters better relations between union and management
Helps an individual to work in a team or group
Identifies persons for the future
Allocates the right person for the right job
Improves the economy through people
Main strength of any organization lies in the quality of its
PEOPLE
• Nothing works without people.
• Facilities, technology, and services can easily be copied by
competitors, but NOT PEOPLE (HUMAN RESOURCE).
• Creativity, decision-making skills, analyzing skills are not ‘owned’
by an organization but BY INDIVIDUAL EMPLOYEES (HR).
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IV. GENERAL CHALLENGES IN SME
Professor U Aye Kyaw (Principal, MHR)
 ACCESS ISSUES
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Finance
Technology
Markets
Training and Development
Human Resources
Information
 BURDEN OF PAPERWORK
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Ease of Doing Business
Bureaucracy
Transparency
Accessibility
 VULNERABILITY
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Economic conditions
Political environment
Financial policies
Remote locations
Weather and disasters
 GROWTH
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Cash flow
Market access
Economies of scale
Competition
Conversion from informal to formal
V. CHALLENGES, PROBLEMS,
ISSUES OF HR IN SME
Professor U Aye Kyaw (Principal, MHR)
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Hiring qualified people/difficulties filling key-employee positions
Cost savings in HR
Problems retaining qualified people
Developing managers and employees with high potential
Control total wage bill (total payroll costs)
Improve labor conditions
Creating a performance driven culture
Meeting development needs of workers
Apply/dealing with (new) laws/regulations/legal obligations
Managing work-life balance
Managing demographics: impending retirement of key workers
Managing change and cultural transformation
Gaps in leadership pipeline/improving leadership development
Transforming HR into a strategic partner
Managing globalization
Downsizing our workforce
V. CHALLENGES, PROBLEMS,
ISSUES OF HR IN SME
Professor U Aye Kyaw (Principal, MHR)
• The founder or owner has large impact
• Poor in recruitment, selection, & retention
• Weak in training and development
• No or few expatriate management
• Limited HR department, HR practices, and
specialized HR expertise
• Not adequately addressing potential
workplace litigation
• Not fully complying with compensation regulations
V. CHALLENGES, PROBLEMS,
ISSUES OF HR IN SME
Professor U Aye Kyaw (Principal, MHR)
Top 10 barriers to international markets by SMEs
1. Shortage of working capital to finance exports.
2. Identifying foreign business opportunities.
3. Limited information to locate or analyze markets.
4. Inability to contact potential overseas customers.
5. Obtaining reliable foreign representation.
6. Lack of managerial time to deal with internationalization.
7. Inadequate or untrained personnel for internationalization.
8. Difficulty in managing competitor’s prices.
9. Lack of home government assistance and incentives.
10. Excessive transportation and insurance costs.
VI. SOLUTIONS OF HR (HRM)
Professor U Aye Kyaw (Principal, MHR)
VI. SOLUTIONS OF HR (HRD)
Professor U Aye Kyaw (Principal, MHR)
Competency
in
people
Culture
in
Commitment
in
organization
people
VII. SOLUTIONS BY GOVERNMENT
Professor U Aye Kyaw (Principal, MHR)
Points For The Government To Consider
• Enhance Education & Training Resources
• Need Assessment Survey to identify major SME needs
• Establishment of Institutes of Small and Medium Enterprise
• Entrepreneurship Development in select business schools.
• Capacity building and up-gradation (curriculum redesign,
provision of equipment, teachers training/train the trainers,
etc.) of selected sector specific technical training institutes
• Encouraging use of the technical training infrastructure by
the private sector
• Incentives for investment in setting up SME training facilities
• Induction of genuine SME representatives in private sector
boards of the technical training institutes.
VIII. HOW TO DEVELOP HR IN SME
Professor U Aye Kyaw (Principal, MHR)
 Create a learning environment for SMEs.
 Create mechanisms to bring the informal training into the for
mal training, coaching, and mentoring.
 Develop an entrepreneurial culture including education.
 HRD policies (mostly geared towards large businesses) must
be focused more on development, benefits, and success of
SMEs.
VIII. HOW TO DEVELOP HR IN SME
Professor U Aye Kyaw (Principal, MHR)
Overall Scores for Promotion of Entrepreneurial Education
VIII. HOW TO DEVELOP HR IN SME
Professor U Aye Kyaw (Principal, MHR)
Indian Institute of Foreign Trade
IX. CONCLUSION
Professor U Aye Kyaw (Principal, MHR)
We have been trying to push the economy
from the top. But to move the
economy faster,
we also need
to push from
the base.
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