“Training Strategies for Small and Medium Sized Businesses: One Size Doesn’t Fit All. ” Abstract The prerequisites for training vary in different businesses, with size being a significant factor. The smaller firms tend to conduct their training for their employees on a superficial level, having their entire focus on learning informal skills. Whereas in comparatively larger SMEs, there is a broader spectrum for the learning perspective. These companies want to obtain a more formal training with an objective of achieving standard skills. Thus, different firms have different training strategies regardless of the size.
This paper analyzes these differences and identifies the challenges that may inhibit certain training strategies. “Training Strategies for Small and Medium Sized Businesses: One Size Doesn’t Fit All. ” Introduction The prerequisites for training vary in different businesses, with size being a significant factor. The smaller firms tend to conduct their training for their employees on a superficial level, having their entire focus on learning informal skills. Whereas in comparatively larger SMEs, there is a broader spectrum for the learning perspective.
These companies want to obtain a more formal training with an objective of achieving standard skills. Thus, different firms have different training strategies regardless of the size. This paper analyzes these differences and identifies the challenges that may inhibit certain training strategies. A survey conducted by W. Paul and J. Storey (1997) among 6000 randomly selected SMEs in Great Britain showed that there are huge differences in the attitudes of the manager and the ways of fulfilling the training needs of either family or non family employees in their business.
The family members need for training is viewed in terms of explicit development, whereas the case is entirely different for non family employees; it is only to foster their career building needs. It also indicated that the owners are in favour of training but do not consider it as an essential part of their business strategy. These managers also stated that often they are pressured by the government agencies and external trainers to spend a part of their profits into human resource development and in most cases, the decision for either allowing employee training or not was made by the manager or the owner of the organization.
Only the rest of the 7% hired a professional human resource for training, but even in those firms, the final decision was in the hands of the owner or the manager (Paul & Storey, 1997). Through this paper, the researcher aims to identify the state-of-the-art training strategies that are used by different small and medium sized organization, the implications of different literature on these training strategies, and loop-holes between the distresses that owners of different SMEs have about the Human Resource Development issues.
Review of Literature After looking at an overview of small business, M. Harry (2002) gave a pragmatic statement which says that the managers or the owners of approximately 63% of small businesses continues to be involved in the issues related to the development and training of the employees, regardless of the increase in the intense of complexity and formality in these firms. Only 26% of the organizations actually hired HR professionals and gave them the lead of the training program and developmental decisions.
However, all of the respondents claimed to be using properly scheduled training plans and budgets, and recognized that there is a strong relation between their firms’s training requirements and a growing competitive advantage. Despite of all these facts, the owners of the firms still did not view training as an essential part of their entire business strategy. According to these firms, the training of non family workforce is an expense to the organization (Harry, 2002). On the contrary, the training for family members was perceived as a crucial part for the long term business benefits and succession planning.
The owners of these business entities were also dissatisfied with the array of training which the external parties were providing. Usually, the owners accounted that they face a lot of sill shortages because of unavailability of appropriate training needed for both present as well as future business necessities. All the respondents in this survey claimed that they have searched for relevant training programs with economical prices at local, regional, and national levels.
But after finding a suitable program, the managers were still hesitant to ensue because the costs were very high and there was no appropriate support available. As a result, the training packages were having more economically low prices and guaranteed general rather than ideal support. R. Hill and J. Stewart (2000) utilized a number of case studies in order to clarify the Human Resource practices of SMEs operating in the US. They found that a variety of companies in different industries have the tendency of short term and impulsive Human Resource Development.
Training in such firms was informal, imprudent and had the objective of solving the workplace problems immediately, instead of the long-term employee development. They also found that these firms have a propensity to justify the active promotion of a developmental strategy in the absence of training. Nevertheless, the philosophy of owners and managers towards the business and their perception about the relationship between Human Resource Development and the performance reflected through their attitudes and their motivation levels.
According to research conducted by R. Rova and P. Chris (2006) on Canadian small and medium sized organization; the difference between the amounts assigned to training are not very noticeable. Small firms reserved only 20% of their operating expenses for training, whereas medium and large firms allocated 26% and 22% respectively, for training from their budgets. These results slightly differ from other findings; nevertheless, this population was segmented into trainers and non-trainers.
The current studies that measure intensity of training are concerned with only those firms that actively participate in training their employees. On the other hand, the studies which were done previously included those firms as well which were never involved in employee training and development. Because of this, there is a significant difference between the results of previous and current researches. But, it is clear that since the past decades, the training incidence in smaller businesses is relatively lower than that of in medium and large organizations.
According to W. Cecili and A. Neil, (1997) in order to classify and clarify the gaps between an entrepreneur’s concern regarding the matters of human resource management in new SMEs and the topics which were pointed out from the review of literature on the practices of human resource management in SMEs, a qualitative evaluation was used. The survey statistics from 156 entrepreneurs, focus group data which was obtained from 173 founders of emerging capitalist firms, and 129 research articles were assessed.
It was revealed that there are certain omissions as well as gaps in the literature. Among those omissions is the significance of creating highly efficient employees. These employees can perform various functions under a variety of phases of organizational development and the people familiar to the organizational culture (Cecili & Neil, 1997). One can easily identify that a positive relationship in most of the small businesses is found between the significance of quality improvement, training, human resources-based strategies, innovation and expansion.
It is also a sign that if some organizations pay attention to these three strategies, it is most likely to invest in employee training. Besides, the significance of innovation and market expansion strategy is more in smaller businesses that have 9-10 employees in particular. Organizations that view this strategy as important are likely to allow training for their employees than those firms which consider quality improvement and the human resources-based strategy more significant (Cecili & Neil, 2007). The table given below is adopted from the research of R. Rova and P.
Chris (2006). This table contains a detailed description about the percentage of businesses that support proper training programs, based on their organizational strategy and the size of the business. One more important factor on which the organization decides whether to train the employees or not is the availability of a flexible work schedule. One probable explanation is that employees having flexible tasks and schedules are more independent and can organize time off more efficiently, making it easy for the employers to send these employees on training (Rova & Chris, 2006).
Nowadays the concept of blended learning is equally popular in both academic and corporate circles. In 2003, the American Society for Training and Development recognized blended learning as one of the top ten trends to appear in the knowledge delivery industry (Cecili & Neil, 2007). Organizations adopt this strategy in order to get hold on the new trends of the market and to absorb new knowledge at any point of time so that they can respond to the changes in the economic environment. Organizations engage in such training programs so as to polish the management skills of their executives and managers.
These lectures also help in enhancing the management capacity. Professional Human Resource personnel are hired to conduct the training. This training program aims to address the trainings need of corporate managers in their respective discipline of work. This may include introduction to modern technology and new trends in management on a global scale. Implications of the Literature The implications from the entire literature review are as follows: * When designing and implementing training programs, the target training groups along with their training needs must be clearly identified.
The aim of training must be need and demand oriented, and the employee should not expect any material gains from the training program. For instance, cash allowances or inducement by access to credit should not be in the employee’s mind as results of the training program. * Training should be designed in a manner that it is easier for the employee to understand and should be on the principle of “learning by doing. ” On the job training, turns out to be more fruitful for employees, as it allows them to work more effectively on their own problem situations. Training must take place closer to the employee’s place of work and should be appropriately scheduled, such as, on weekends or evening. In this way, the employee will be able to continue his office work and training simultaneously. * Employee’s commitment to the training program is an essential key that leads to successful training. Employees often lack the motivation in having training programs unless they see some rewards or benefits from attending. * Feedback is an essential way to get to know how effectively the training program is being conducted.
Sometimes follow-ups also help in knowing about the effectiveness of the training program and further developmental needs of the employees. * The size of the organization does not really matter, so, in order to sustain its existence in the global and regional market, firms must invest money in training their employees. They should have properly designed training plans and budgets specifically allocated to employee training. * As for family businesses, training only family employees for the purpose of succession planning would not serve the organizational aims and objectives.
In order to keep the business running smoothly, owners/managers of family business must also provide training to non family employees. Conclusions Based on the implications derived from the literature review, the authors conclude: * Training in small and medium enterprises are conducted on a superficial level just to gain informal knowledge; however, these firms are always interested in learning on a broader scale, but due to scarcity of funds they cannot go for it. * Only a few of the SMEs hire Human Resource Development professionals for the training program.
According to the survey conducted by Paul and Story, (1997) only 7% of SMEs were included in the list of giving proper training to their employees. The rest of these which were approximately 93% either did not hire a professional, or they did not do employee training at all. * There are only few SMEs that allocated proper budgets for training employees; according to Rova and Chris, (2006) only 20% of the small organizations have properly assigned expenses. * Non-family employees have the same right for training and development as of family employees in small family businesses. The firm’s business strategy also influences the probability of employee training. If a firm is pursuing a strategy of innovation and growth, the probability of the firm to train its employees is much more. References Cecili, W. & Neil A. (1997). Management training in small and medium-sized enterprises: methodological and conceptual issues. The International Journal of Human Resource Management, Volume 8, Issue 1, 44 – 65. Harry, M. (2002). Training and HRD strategies in family and non-family owned small businesses: a comparative approach.
Journal of Education and Training, Volume 44. Hill R. & Stewart J. (2000). Human resource development in small organizations. Journal of European Industrial Training. 24 (2-4), 105. Paul W. & Storey J. (1997). Training provision and the development of small and medium-sized enterprises. Norwich: HMSO Department for Education and Employment. Rova R. & Chris P. (2006). Employee training decisions, business strategies, and human resource management practices: a study by size of business. Cambridge: Blackwell.