human resource management

Importance of Human Resource Management in Small Business

Human resource management is very much essential in the small-scale industry sector in India. Entrepreneurs must develop the competencies of employees. Setting up a small-scale industry is relatively easy for an enterprising individual.

However, managing it well and growing the business is much more difficult. Furthermore, many small enterprises fail to make a mark in the industry in the longer term. Because they fail to change or develop themselves and their competencies with the changing need of their enterprises.

Entrepreneurs normally have a high degree of perseverance, risk-taking ability, business motivation, self-respect, confidence, and a need for independence. Also, they have a tendency to work hard, take personal responsibility for everything, and have a preference for doing most things themselves.

As a result of working hard from the idea to starting manufacturing, they become workaholics. And the most unintended consequence is you may fail to let others in the organization take personal responsibility, and experience feelings of contribution and success.

Thus, your employees become dependent on you and work only out of loyalty and fail to enhance their own competencies and share the burden. Here in this article, we intend to explore why human resource management is important in the small-scale sector.

4 Key Factors for Human Resource Management In Small Business

1. Delegate The Responsibilities

To get success in small business you must learn to delegate responsibilities. In addition, you must identify a few strategic individuals from among the employees. Develop them as their second and third line of command. In addition, you must identify your own competence.

There are so many important departments like diversification and expansion, finance, marketing, production, recruitment, etc. in the business. Keep one or two of the key functions and train others to handle the rest. However, you will need to develop interpersonal trust and may need to cultivate trusting some of the subordinates.

2. Share Your Thoughts

In a small-scale enterprise, you must spend considerable time with your employees. And you must share your long-term and short-term plans and vision for the business with them. You must meet the employees periodically and listen to them and their problems.

Also, you must share the problems and difficulties of the enterprise. This activity helps to generate a feeling of belongings in the organization. As a result, you will get more commitment and loyalty from the employees.

Related: Things To Consider In Starting a Product-Based Business

3. Talk To Everyone

Generally, a startup company starts with 2 to 10 employees. And obviously, your company may not have a professional HR department. So you are the person who needs to take care of your employees. Individually interact with as many employees as possible.

You don’t have to use any elaborate formal performance appraisal. However, you must discuss with each individual his role, performance, strengths, weakness, opportunities for growth, etc. You must do it at least once a year or more.

Related: Small Business Registration In India | Basic Guide

4. Have A Budget For Employee Development

It is worthwhile for small business owners to keep a small budget for employee development and motivation purpose. You can encourage them to undertake some of the HRD activities. The list includes training, field visits, guest lectures, company day celebrations, awards, etc.

A small business offers ample scope for proper human resource management for developing employee competencies. However, here you will need to play the role of the HR Manager. And therefore, the chances of positive outcomes are tremendously high in your business.