IMPACT OF MANPOWER TRAINING ON PRODUCTIVITY OF SMES
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IMPACT OF MANPOWER TRAINING ON PRODUCTIVITY OF SMES
Chapter One: Introduction
Background to the Study
It is commonly stated that an organisation is only as good as its people. Schools, retail businesses, government entities, eateries, and manufacturers all share something in common.
That is, they all require people; human beings (human capital) to operate the organisation. As a result, it is incumbent on all of them (organisations) to hire skilled and motivated employees in order for the organisation to grow and thrive.
This urge to compete and succeed has grown even stronger as organisations face the challenges of a fast-paced, dynamic, and increasingly global economy.
Small and Medium Enterprises (SMEs) are increasingly recognised for their crucial role in economic development. They are frequently regarded as efficient and prolific job producers, the foundation of large corporations, and the fuel for national economic engines.
Even in established industrial economies, small and medium-sized enterprises (SMEs) employ more people than multinational corporations. Governments at all levels have launched programmes to support the growth of SMEs.
Small and medium-sized enterprises (SMEs) play a critical role in economic development, regardless of economy size. It generates jobs, expands the manufacturing base, and supports large-scale businesses.
Economic recovery following the East Asian crises of the 1990s and the global financial crises of 2009 has prompted policymakers to focus on stronger local markets headed by SMEs. The deregulation and liberalisation of trade and investment regimes has benefited smaller enterprises.
According to an OECD survey (2004), SMEs account for approximately 90% of all firms in the OECD. Another survey, based on 670 Asian organisations, says that one-half of SMEs anticipate to develop significantly in the future since they can react and innovate faster and have stronger client relationships.
The SME sector absorbs increasingly labour-intensive industrial processes. As a result, they appear to be making a greater contribution to socioeconomic growth by reducing unemployment.
It is well recognised that SMEs have resulted in a shift away from agriculture-led economics and towards industry and services, creating an environment in which small and large enterprises are integrated, attracting more foreign investment and ensuring stable trade terms (Bhattacharyya, 2006).In the European Union (EU), SMEs employ two-thirds of the overall labour force.
The primary factor influencing employment in the EU. Small and medium-sized enterprises (SMEs) have recently embraced advanced manpower training strategies to improve medium- to long-term performance.
Human capital and knowledge, as intangible assets for SMEs, are becoming increasingly crucial in making future investment decisions. According to the diagnostic approach developed by Milkovich and Boudreau (2000), the HRD process is divided into four phases as follows:
Clarity of corporate objectives.
Evaluate the external conditions.
Choosing training regimens with long-term outcomes
Evaluating outcomes regulation
Early HRD initiatives concentrated on fostering behaviours that delivered business strategies, primarily addressing the link between employee behaviour and company strategy (Snell et al, 2001).
However, corporations have moved their priority to training and inventive skills in order to remain competitive in the market, implying that as competitive conditions change, firms evaluate their tactics to strengthen their current and future positions.
Owners of SMEs always aspire for an efficient and organised enterprise that achieves high profits but does not necessarily provide employees with a high level of motivation.
According to recent management themes, reward and motivation plans, acquisition of new technology, and skill development are cornerstones for realising the firm’s objectives (Scheduler and Jackson, 1989).
Furthermore, the newly produced value of intellectual capital assets, skills, innovation, and information gives a firm a competitive advantage in the marketplace. Employee quality has been seen as the most significant tool for an enterprise’s long-term sustainability.
SME’s should consequently ensure a motivated and highly skilled personnel, which must constitute the backbone of any potential organisation or firm. There is no alternative source of competitive advantage.
“Others can copy our investment, technology and scale – but not the quality of our (employees) people,” In a 1999 Fortune interview, Jack Welch, former CEO of General Electrics, emphasised the importance of employee training and human capital.
He stated, “We spend all our time on our (employees) people. The day we screw up the (employees) people thing, this company is over” (Fortune, 21 June 1999).
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