Broad economic trends such as globalization of the economy, technological progress and the trend towards a more knowledge-based economy have altered the nature of challenges that SMEs face today. Skills, capabilities and motivation have now become crucial pre-requisites for sustainable productivity, innovation and growth of SMEs. However, in most cases, the situation of SMEs is characterized by a paradox.
While, continuous training and life-long learning are essential elements of competitiveness of SMEs in the era of globalization, it is also an undisputed fact that opportunities and the wherewithal required for skill development and continuous learning are elusive to SME employees.
To thrive in the competitive business environment, SME employees need both formal and informal training. Formal training occurs in organized and structured environment such as in educational and training institutions and is always followed by certification and validation. Informal training, on the other hand, results from daily activities related to work, family or leisure. It is not organized or structured in terms of objectives, time or learning support.
In the context of transitioning of India towards a services-oriented economy, it is imperative that its SME management workforce develop the following below skills.
Generic skills: Numeracy and literacy, oral and written communication, office administration skills, IT user skills.
Routine skills: Basis, repetitive, low knowledge intensive skills.
Social skills: motivation, customer handling, networking.
Language and cultural skills: ability to communicate in other languages, appreciation of cultural differences among ethnic groups.
Technical skills: problem solving; design, operation, rethinking and maintenance of machinery; IT professional skills.
Management skills: business planning, regulations and quality control, human resources planning (recruitment, training and skills development) and allocation of resources.
Entrepreneurial skills: strategic thinking, self-confidence, networking, dealing with challenges and risks.
Green skills: specific skills required to adjust products, services or operations due to climate change requirements.
Barriers in Small and Medium Business (SMEs)
Even though SMEs recognize the need to improve their innovation capacity and the upgrading of qualifications and skills, financial constraints, information deficiencies, myopic approach, risk aversion, inaccessibility to tailored training methods and lack of management capabilities pose obstacles that prevent SMEs from adopting training programs for their employees.
The way ahead to Business Training Plan
To overcome the barriers to training, SMEs need to integrate formal training and learning with informal learning processes in the workplace. Training does not have to be necessarily expensive to work well. Informal forms of training or on-the-job forms of training can also perfectly address the needs of skills and competence development.
Additionally, SMEs need to tailor training programs according to working requirements and the existing qualification of employees. Also, to enhance management capability, it is important to identify skill requirements – not only in relation to existing training gaps, but latent skills gaps also.
Finally, in order to overcome financial constraints, SMEs can leverage training programs and initiatives implemented by the government in form of e-learning and ‘open’ or distant learning.