This paper examines the growing importance of employee training and development in small and medium-sized enterprises (SMEs), contrasting their capacity with that of large corporations. Drawing on research from human resource management journals, the paper identifies key barriers SMEs face when attempting to provide developmental opportunities — including time constraints, financial costs, and the operational impact of employee absence. It argues that HR managers in firms of all sizes have a responsibility to prioritize employee development and to seek cost-effective programs that build employee skills and contribute to organizational success, even when resources are limited.
In a recent trade magazine, an article appeared stating that "the training and development world remains largely stuck in dated thinking practices and programs that are increasingly ineffective and often irrelevant" (Bell & Majer, 2011, p. 62). According to the article, work in America is no longer focused solely on manufacturing goods. In the new global economy, work is also about "coordinating with others both inside and outside of a business to mobilize resources that enable the effective and efficient production of customer satisfaction" (p. 62).
If that is true, then employee development, which is already gathering momentum in today's corporate world, becomes more important not only to major corporations but to small and medium-sized enterprises (SMEs) as well. Many managers have finally come to the realization that helping their employees develop additional skills and leadership traits benefits not only the individual employee but also their co-workers and the company as a whole. This holds true for both large corporations and small and medium-sized firms; therefore, each type of entity should make extended efforts to provide as many developmental opportunities as possible. That may not be as feasible for small to medium-sized companies as it is for large corporations.
One recent study determined that "human resource issues are emerging as some of the most prominent concerns for owner/managers" (Pajo, Coetzer, & Guenole, 2010, p. 281). The study also found that there were certain barriers specific to small businesses that large businesses did not face when attempting to provide employees with developmental opportunities. Recognizing "the significant economic contribution of small and medium-sized enterprises (SMEs) to national economies" (Mason & Barrett, 2006; Cardon & Stevens, 2004), it is likely that the greater impact of employee development could take place in the non-corporate workforce — but that the barriers SMEs face are significant.
For one thing, how can the small business owner send employees to developmental training courses — as much as he or she might want to — if doing so takes employees away from ongoing duties that are essential to the viability of the company? A number of studies have shown that small and medium-sized companies are less likely to provide the developmental opportunities employees might desire due to time constraints, expenses, and lost employee time (Kotey & Falkner, 2007; Storey, 2004; Johnson, 2002). This is a conundrum that many young workers will face as they complete their education and enter the workforce.
Research on organizational and employee development consistently highlights that the cost-benefit calculus looks quite different for a small firm than for a large corporation. Where a large company can absorb the temporary absence of a staff member attending a training program, a small business may have no practical substitute for that employee's daily responsibilities.
"HR managers must find affordable, effective development programs"
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