Tough task in retention for SME & some solutions


With the opening of the country to globalization, possibilities for entrepreneurship are growing. So many small and medium size enterprises (SME) are springing up around these peripheral services catering to bigger giants across the country. However, while each one is doing their own innovative bit, retention of manpower due to lack of brand image, and sometimes adequate resources is challenging their existence. As big players grow, eco-systems for support are being created around them in terms of training, HR activities, technical support and solutions.

Motivating and retaining people to stop them from joining bigger giants is difficult. Smaller firms do not have too many resources to recruit fresh candidates and then train them. Hence, they look for experienced candidates who charge exponential salaries. Therefore SME have to outsource work to freelancers who join their projects out of interest.

The mid level entrepreneurs worked out some innovative ways by embarking upon lateral hiring. This is what most of the mid level entrepreneurs with better financial resources opt for. One of the main points of attraction of lateral talents to look for mid enterprises level avenues is possibilities to develop multifaceted skills. Employees get more freedom to work and take decisions their own ways, face so intriguing challenges due to working on tight budget and time schedule.

Most of the times lateral talents join smaller companies because they get to work at multi level projects unlike big ones which employ a person keeping in mind one particular project or module. A very innovative strategy that we noticed is during weekends employees get to work on the kind of the technology they like and develop a new product with company resources. If they are good enough to be commercialized, the innovator is made a stake holder of the product. Another mid size IT Company focuses on lateral hiring by giving the hires a 20-25 % salary hike.

Another mid size company CEO says that nature of work and a relaxed environment can be a major attraction. The SEM is into analyzing market data with specific domain expertise. These jobs are creative which can be done in a relaxed environment. In near future concepts like supervision and bureaucracy will be extinct.


The lateral hiring may prove to be expensive after sometime. To solve this the other way round is on-the-job in-house grooming of undergraduates or fresh graduates with no specializations. HR solutions firm Zentrum & Maker is doing the same The Managing Director of the firm said that they believe in acquiring raw material and then molding them according to the organization’s requirements. Initially they hired experienced people. Now they have reversed it by going in for fresh candidates and putting them through 90 days in house training. This ensures a two way benefit: The employee without any specialization gets industry relevant experience and for the employer it ensures that the employee is retained for a minimum of two years.

Some other companies like Eblitz pick up street smart candidates irrespective of qualifications who are then groomed. By doing this the employee feels obliged because the company gave him a chance to earn and grow when nobody else would. The Company has also made it a policy to reward loyalty. The raw candidates inducted when they grow and stay with the organization for sometime they pay them some commission from the profit that the company makes.

Selling Dreams

The other way that smaller enterprises are coping up with the talent retention challenge is by selling dreams and creating long term career values for employees. A company is adopting a two pronged strategy. For lateral hires the chart out a career growth plan based on the candidate’s feedback and his/her expectation from the company. For newly inducted personnel there are internal technical and management certification programs. Their HR strategy is to present a vivid picture to the employees on what is expected of them and how can the role contribute to their growth.