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Talent Management for SMEs

Talent Management for SMEs

Tuesday August 01, 2017,

6 min Read

Let me start with my own story. We are a classic example of an SME. I am a first generation entrepreneur. I am a pass out of IIM. I have founded 5 startups. Out of them, the first one failed miserably. It was a seeds business. Later I founded recruitment and training companies. My latest startup is JobsDialog, a recruitment solution for Micro, Small and Medium enterprises. When I look back and see what I did right or wrong in terms of talent management in my companies, I realise that I am actually still struggling.


The biggest talent management problems Small and Medium Enterprises (SMEs) face are:

1. Attracting quality talent

2. Retaining them

3. Giving them a suitable compensation progression.

These are the three big problems every SME faces. These are the three problems preventing SMEs like me, from being on par with talent management of some of the big companies. But, we can still make an attempt. Here are a few guidelines I would like to share from my experience and learning.

Define talent management:

Many times we get confused with the definition of talent. Talent does not mean a pedigree. Talent need not be an IIT or IIM or any other premier institute. Talent is anybody who gives more value to the company than what he is being paid for. Somebody, who is willing to contribute more than what he is getting, is talent. Therefore pedigree has nothing to do with talent. A person with the best qualifications but cynical mind and negative attitude is not talent.

Talent has nothing to do with whether the person is a fresher or experienced. Talent can be found in a fresher and a person with 10 years experience. Sometimes, we would have missed talent in a person and discover it suddenly after a few years. We may in future find something in him that is useful to the company. So, there is no age limit to process talent.

You can't be talented in everything. Some people are talented in managing people, some people are good at managing processes, some people like conceptual work and some prefer doing physical work. Having said all that, the most important question in this discussion is, ‘how to identify talent’.

Identify talent:

'How to identify talent' is a very interesting question. If you give a task to a talented person, he will either ask a lot of questions related to the task before attempting it or add independent thoughts after doing some research and bring a finished product to the boss. This saves his time on having to think about it. It doesn't have to be the final product. It should be at least 95% close to what the boss expects. While doing the job the talent enjoys the work and finishes it within a time frame. So, these factors help identify talent.

The best way to identify a talent is when you give a task to a person and he carries it out naturally, enjoys doing it and produces high- quality output. If you have to rework it three times and the person does not understand your instructions, it means he is not talented in doing that task. It does not mean that the person is not talented at all. It just means that the person is not talented in that specific task.

What attracts talent?

Talent always wants to work with talent. The best way to attract talent is to see who is most talented person in the organisation and put the new talent to work with this person. The worst thing you can do to talent is to attract and hire him, and then expect him to work with mediocre people. So the first rule of acquiring talent is - talent attracts talent.

Most of the top talent works with the promoters of the company. They are enamored by the variety of projects they are assigned. Their vision is much broader. They are not insecure and they don't have to be defensive. Most of the top talent begin their career as executive assistant to the promoter. So, the best way to attract talent is, you as a promoter of the company identify the talent and nurture them before assigning them to somebody else.

How to retain talent?

The most absurd idea around talent management is that people are always looking for money. Talent, in the early part of their career, do not want to be under paid. But they are not looking for high packages either. This does not mean that you can retain talent by not compensating them decently. Talent are not driven by money. They are driven primarily by the challenges they deal with on job and the kind of appreciation they get when they complete the job successfully. So you have to keep pushing them harder and harder. And they like it. Good talent do not like softer jobs. So the best retention strategy is to identify the best talent and keep on pushing them to take up more and more challenging jobs. Provide them the resources and be available to them when they are in crisis.

What kind of supervision talent needs?

Top talent does not like supervision. They tell you very clearly that they do not want to be asked about the status every now and then. The best way to deal with talent is to set milestones and ask them to give a presentation on their progress periodically. But there definitely has to be a milestone based assessment because you have to know what they are doing and whether they are doing it in the right direction.

How to reward talent?

The best reward of talent is to give them job rotation. Don't put them in the same job. They like to do a variety of related jobs. Every job has to supplement their learning. So the best rewarding strategy for SMEs is to give talent job rotation every 2 years or 3 years. Already the SMEs have a big disadvantage. They cannot pay big salaries. They are not glamorous. But having said that they do have something that last companies cannot offer top talent - they get a chance to work with the promoter. The exposure of top talent in SMEs is 10 times more than senior managers of many large companies because they do a variety of tasks. They have the experience of building everything from the scratch. So, the exposure and the kind of competence they have is far more valuable than what their counterparts in large companies have.

Writer of the article is Thyagaran Muralidharan , Chairman, TMI Group.