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Corporate Entrepreneurship and Strategic HRM Issues Facing SMEs

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Corporate Entrepreneurship and Strategic HRM Issues Facing SMEs

At the onset of any business, the objective of the owner of the business is to generate

more revenue through the business's operations. To ensure that the business rewards them the

right way, business owners, both SMEs and multinational firms, dedicate most of their resources

to ensure that they offer the best working environment for their employees and a conducive

business environment for their clients. However, every investment faces problems in its day-to-

day operations due to competitors' ever-changing working environments and competition. SMEs

are some of these investments that most people vent into to sustain their day-to-day lives. For

defined companies to compete effectively and to add value to the economy as a whole is

progressively dynamic and demanding surroundings, they must cultivate entrepreneurship

behavior – such as advancements, corporate making inroads, and strategic alignment. Human

resources are critical because they can either inspire or inhibit the development of a company's

entrepreneurial spirit. Competence in inventing, taking chances, and discussing information are

required, and reward systems that motivate this behavior are also required. Below are some

essential corporate entrepreneurial and strategic human resource management issues these SMEs

and multinational firms face in their day-to-day operations.

The Recruiting Process of an Organization

Recruiting new staff represents a significant time and money investment for a startup

firm. When job advertisements and interviews are done poorly, the recruiting process can

quickly become a time-consuming nightmare. For starters, as per Glassdoor, it takes a minimum

of 23 days to find the correct applicant, detracting from the time available for other major

programs. For more skilled roles, the process can take significantly longer. A poor job summary

can also result in non-qualified aspirants' recruitment, resulting in more time being consumed by
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the manual screening of each curriculum vitae (GMS, 2019). According to CareerBuilder,

rushing through the interview session or neglecting to ask the correct questions can lead to

unfavorable hires, costing the company nearly $15,000 in lost revenue. When it comes to hiring,

many small businesses rely on referrals. However, interviews must be consistent and conducted

to attract quality talent while also providing a clear path to making a job offer.

Training and the Safety of Workers

Once staff members have been recruited, having human resource resources on hand

during coaching can be a tremendous asset in preventing costly mistakes and even concussions

from happening. On the other hand, many small businesses do not have the resources or time to

train new employees, which may compromise workplace safety properly. In the United States, a

worker is harmed in the profession every seven seconds, according to the National Safety

Council, with contact with objects and equipment accounting for 25 percent of all workplace

injuries (GMS, 2019). Employees who receive proper training can avoid workplace injuries such

as sprains, strains, cuts, lacerations, and punctures while boosting morale and retaining

employees.

Complying to the State’s Laws Governing Business Organizations

Small firms are obligated to abide by federal rules, and refusal to do so is a common and

serious occurrence. For smaller companies, worker mislabeling is the most common compliance

problem to deal with. In the United States, the Department of Labor (DOL) estimates that up to

30 percent of audited businesses misidentified their employees (Milon, 2017). It is critical to

understand the difference between employees and contractors because many people do so in

error. The DOL and the IRS may consider your mislabeling intentional or unintentional, and the

consequences will vary based on their determination. Among the other laws are the Fair Labor
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Standards Act (FLSA), the Equal Pay Act, and the Americans with Disabilities Act (ADA), to

name a few examples. It is critical to keep up-to-date on federal rules to remain consistent with

these rules.

Coping with Payrolls in the Organization

The administration of payroll and filing tax returns can be a time-consuming and

challenging task for small businesses. According to PricewaterhouseCoopers, small and mid-

sized businesses spend an average of $2,000 per employee per year on payroll administration

(GMS, 2019). When it comes to avoiding compliance issues, proper bookkeeping and tax filing

can be a hassle, but they are critical to your company's success when it comes to maximizing

profits. According to the IRS, 40 percent of small businesses are subjected to an average of $845

in penalties each year, a significant financial burden for them.

Resolving of Conflicts at the Place of Work

When an industry is expanding, there is the possibility for disagreement at the place of

work, and neglecting it can result in significant time and financial losses. According to a study

conducted by the professional education and training corporation, CPP, Inc., 85 percent of

workers encounter conflict in the workplace at some point (GMS, 2019). Conflict in the

workplace squanders nearly three hours per week, resulting in billions of dollars in lost wages.

Not having a human resources resource to control dispute resolution safely will only result in

more effort and cash being spent, lower staff morale, and lower retaining employees’ prices.

Retaining of Skilled Workers

Employee retention can be difficult for young business owners when human resource

management problems are not fully resolved. According to the Society for Human Resource

Management (SHRM), employee retention is becoming an increasingly severe issue for many
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organizations, with the average turnover rate resting at an alarming 18% (GMS, 2019).

Employees are less likely to stay with companies that do not take the initiative when it comes to

human resource management for various reasons ranging from poor hiring practices to

insufficient benefits to conflict resolution.

Provisions of Valuable Benefits to the Employees

In strategies to attract and maintain the best talent, small companies must offer

competitive salaries and benefits that include quality benefits. Health coverage, retirement funds,

and insurance coverage are just a few advantages that employees seek. Nevertheless, many

smaller companies find that purchasing and administering these advantages on their own can be

prohibitively costly and complex when likened to the purchasing power of a community benefits

plan (GMS, 2019).

Keeping the Employee Handbook up to date

As a result of insufficient training, new staff may turn to the staff handbook for a deeper

comprehension of the workplace environment and the anticipations of their positions. A small

company with an out-of-date employee handbook may experience failure to communicate and

even legal problems as a result (GMS, 2019). A minimum of once a year, worker guidebooks

should be revised to keep up with the continuously shifting nature of employment laws and

regulations.

Determining the Organization's Performance

Various criteria have been employed in the past to assess the overall performance of a

company. In the words of Venkatraman and Ramanujam, a firm's quality is a function of its

ability to accomplish its objectives, and achievement involves financial and non-financial metrics

(Zehir et al., 2016). Economic indicators are included in financial metrics, and achievement
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metrics such as market share, efficiency, customer satisfaction, and market effectiveness are

included in non-financial measures. Alternatively, the contributions that employees make to their

jobs are incredibly vital to the growth and achievement of their respective companies. Firms can

gain a competitive benefit over their competitors by employing gifted and competent employees

(Zehir et al., 2016). It is critical for a business organization always to determine their

contribution to their employees and their employees' contributions to the company.

Time Tracking

Depending on the location, a business organization will be obligated to abide by local,

state, and national laws governing holidays, paid holidays, breaks, and extra pay for the workers,

as well as any applicable provincial or national regulations. It can be hard to verify that workers

are being paid a fair wage if the firm owner does not have a reliable time tracking system in

place (GMS, 2019). Small business owners and their employees will benefit from using an online

platform because it will save them time and energy.

Defining an Onward-Looking Employee Plan

Like every other section in an organization, HR runs the risk of becoming dragged down

in day-to-day operations and losing track of the firm's long-term strategic goals and objectives.

While this is a risky strategy, it is necessary given demographic change and the essence of

workplace diversity. Strategic planning and foresight for employee training translated into

cohesive action are required. According to a study conducted by Kienbaum, participants from the

human resources department rated workplace diversity shallow, which, in my opinion, highlights

the need for improved strategy development (Milon, 2017). However, while diversity appears to

be a non-factor with little impact on the bottom line, it can significantly influence the community

and the performance of the organization. In general, workplace diversity in terms of maturity,
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sex, and racial origin can positively impact innovation and efficiency if it is managed

strategically.

References

GMS, (2019, March 13). 9 Common Human Resource Management Challenges for Small

Businesses. Available at: https://www.groupmgmt.com/blog/post/9-common-human-

resource-management-challenges-for-small-businesses/ (Accessed on: 10 March 2022).

Milon Gupta, (2017 May 23). The Five Major Strategic Challenges for HR. Available at:

http://www.strategicthinking.eu/the-five-major-strategic-challenges-for-hr/ (Accessed on:

10 March 2022).

Zehir, C., Gurol, Y., Karaboga, T. and Kole, M., 2016. Strategic human resource management

and firm performance: The mediating role of entrepreneurial orientation. Procedia-Social and

Behavioral Sciences, 235, pp.372-381.