The power of human capital In today's highly competitive world, it is the 'human capital', or the people working for an organisation, who make all the difference. This notion has gradually given rise to the strategic concept - Human Capital Management (HCM).
Balaji Chandrakumar, Associate Vice-President-Learning Solutions, Expertus, elucidates, "HCM is all about acquiring, managing and developing the human capital. Organisations today are increasingly becoming aware of the fact that their human capital is the only differentiating factor in a globally competitive market." HCM involves recruiting people with the right skill sets, providing them the required training, retaining them and finally enabling their individual and professional growth. Hence, the role of the HR department has become crucial for creating a talent pool for the enterprise to fall back on. Also, the employee life cycle needs to be charted out efficiently. Mr Chandrakumar feels, "In a skills matrix the employee's current technical and non-technical skills are mapped vis-à-vis the desired state for both his current profile and also against the next job profile that the candidate might have the potential for." Of course with the changing demands of the industry, constant training and skill upgradation are essential. This will not only boost performance of the employees but also satisfy their professional aspirations to a great extent. In addition, the quality of the output will enhance consistently. But since the best practices are still evolving in the SME sector, crunch situations can crop up and hinder progress from time to time. Dr. Naresh Malhan, MD, Manpower India, explains, "SMEs have faced the problem of shortage of trained manpower. This can be attributed to technological obsolescence, liquidity crunch and high rate of interest - which have their repercussions on the availability of the right talent. In addition, those candidates vested with the responsibility of control and management of these units are generally not abreast with the latest developments pertaining to their field, and in the process lose out on significant opportunities." In this context, the rate of attrition has always been a major cause of concern for both SMEs and MNCs alike. People quitting an organisation can lead to leakage of confidential information or the tricks of the trade being passed on from one SME to another. Thus for all practical reasons, there needs to be a talent pool. Parminder Kaur, Head HR, Tricom India Limited, says, "With the current market situation, the organisations have started forecasting the challenges and accordingly aligning talent management with corporate goals, identifying and understanding them in order to explore the best talent management practices." Adding to the Ms Kaur's view, Mr Chandrakumar, elucidates, "The HR department is slowly becoming more strategic where SMEs are formulating Employee Engagement Plan. These plans not only address an employee's professional aspirations like technical training/skill building, but also address his personal goals like paternal leaves, family outing, etc." It is not unusual for stress levels to shoot up. This in turn affects the overall performance and growth of the organisation. Hence a congenial atmosphere is essential to nurture human resource. Innovative HCM practices for SMEs should take into consideration the human and professional aspects of employees. Shyaam Sunder K, General Manager-HRM & EAM - Business Support, Ramco Systems, says "SMEs with a sound business plan stand the best chance of attracting people. Gen Y employees demand transparency, flexible work hours, work-life balance etc. In addition, innovative compensation packages that look beyond the pay scale can further stem their retention." Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Attitudes are changing and human capital is being looked upon as one of the most valuable assets for SMEs. Today, there are technologies in the market to provide the much-needed support for HCM. Deb Deep Sengupta, Vice President - SME & Channels, SAP Indian Subcontinent says, "SAP offers All-in-one, Business One and Business ByDesign solutions for SME customers. We deliver leading-edge human capital management capabilities, which make it simple for an organisation to oversee workforce while resourcefully leveraging available talent, at the lowest possible cost and retain its direction in the market place." In addition, with the creation of an employee talent pool, SMEs can pitch for newer business domains, and foray into untapped verticals more aggressively. The total investment in the employees can eventually result in a win-win situation. Affirming to this notion, Mr Sunder K suggests, "Countering talent shortage also implies that the SMEs should recognise that succession planning - a de-risking function - is a continuous affair. Every significant position should ideally be de-risked with a suitable succession programme and regularly updated for relevance and accuracy. This in turn will also help in easing out - the incumbent stress and fatigue." Human capital management should be executed more strategically in order to help employees display their potential more effectively. Thus a talent pool is the most important criteria for meeting the current SME requirements and helping them to grow globally capitalising on manpower. Shankar Velayudhan, Executive Vice President (India, Europe), Mindteck (India) Ltd., emphasises, "HCM helps an SME to get the most from their talent investment. It helps the organisation to get better ROI, as it impacts the bottom line of the company to a great extent." 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