In between the years 2010 to 2015, the frequent variance in the profit quotients and the disparity in the survival and growth rates shown by SMEs, have created a troublesome fiscal scenario for start-ups spread across the globe. SMEs are subjected to higher than market interest rates owing to the absence of collateral investments and are also subject to credit rationing. While the unprecedented rise in private equity markets have slightly improved capital creation for these SMEs, shortcomings are still prominent when it comes to higher than average employment turnover and leavers within the probationary period that increase the cost of doing business. Further fueling this, is the general infrastructural, technical and resource challenges around training that makes it even harder for SMEs to attract, engage and retain top talent. As a result, financial prowess is not the bait SMEs are able to throw at the emerging crowd of talents to pull them into their squads.


So how can SME’s build a successful employment brand to attract talent in a highly competitive and crowded marketplace?

The solution is two-fold as competing for top talent using monetary levers alone is not a viable option. As such, for SMEs to stand apart they should:

  • Strategically differentiate in their administrative dealings from large scale businesses, to pull in the young minds.
  • And promote innovation dynamics.

To find out how these two factors are changing the employment competitiveness for SME’s worldwide, let us first focus on what SMEs can do to differentiate in their administrative dealings from their larger counterparts.

  1. Focus on individual and unit performance
    • Unlike large scale business owners who find it difficult to invest their time in understanding each unit’s contribution, challenges and performance at least on a monthly basis, this is not as challenging when it comes to SMEs. Here, owing to having much smaller teams and leaner structures, leaders have the ability to focus on individual performance and grass root operations in more detail and thus the scope for micro-improvisation is high., an SME based in Colorado earning over $10 million in revenue annually, have weekly meetings between their machine operators and management to set and agree targets on how best to reach out to at least 400 customers each week.
  2. Access to leading minds, learning, mentoring and coaching
    • To learn from leading hierarchical minds may be viewed as a daydream for many employees of large-scale organisations where at most the name of the leader is what foundational employees are aware of. In the case of SMEs however, the reality is that new joiners with an aspiration to learn and grow from the leadership team, have far greater access to knowledge and personal /professional development than their larger counterparts. The founder of Rhino Foods, Ted Castle, the mind behind the creation of Ben and Jerry’s cookies and ice creams, uses low seasonal months of winter as a strategic opportunity to provide well-designed English classes to improve the communication of 30% of his employees that come from Burlington’s refugee communities.
  3. Providing clarity of purpose and the bigger picture
    • A sense of purpose is necessary to function for any individual who does not dream of adding on to the crowd of bots. It is in SMEs that employees are aware of what is needed from whom rather than just who is needed for what. Furthermore, SMEs are better able to employ daily assessment strategies for each unit’s performances and reward or improvise each of them accordingly, unlike the arenas of large-scale trade titans where most new comers stay new comers to the hierarchy even after having invested one or two productive years of their careers. HED Cycling, a SME based in Roseville, Minnesota has 30% of its total employee strength working with the firm for over a decade. This sense of belonging is certainly not a reality for massive armies led by most of the corporate giants. Thus the lucrative confidence and scope of improvisation that SMEs can offer young minds are indeed exponential and is highly craved for by beginners who despite being novices are packed with potential yet to be discovered.Hence, creating administrative differences can be highly profitable in positioning SMEs as employers with greater credentials for fresh and young powerhouses.In a recent study by Goldman Sachs, published by the Enterprise Research Centre, it is reported
      that SMEs that have capably produced through innovation have shown a consistent growth in
      profit in their initial years of survival itself. Innovation as a causal antecedent, acts as an SMEs immune system helping it face the market challenges in a more adept way as compared to resource dependent firms. And thus, innovation dynamics is seen as a second source of
      competitive advantage in the fight for talent. How this works, is discussed in more detail below:

      1.  Evolve with the firm
        • One third of the SMEs that survive till they make it to the top go through a phase of evolution which is essential to take them beyond the initial days of being in the low capability trap. The performance pressure that these new start-ups face, helps them evolve into something more productive with every passing day. This evolution trickles down even to the freshly employed members and thus in the foundational years of their career they start evolving at a pace like their firms. The vigor and the ignition to succeed being the common factor between both the employer and the employee.
      2. Comparative advantage over large industries
        • The increased performance coercion owing to factors like inflation, increased demand and evolving technologies faced by the sprouted SMEs have prompted innovation to such an extent that innovation is now more significant in the small business scenario compared to allocation of ample resources. The creativity boost that such radical demands of the evolving industry causes is highly brain feeding for the young holders of talent. Evidence to this is published in an article by Eurostat stating that in present-day Europe, 20% of the research and development patents are owned by SMEs.
      3. Knowledge oriented innovation
        • Technology fed growth is highly threatened in the present date as technology as a genre is evolving with every passing date. SMEs that promote non-technical and knowledge-based innovation can thus distinctly stand out in the array of employers. In fact, knowledge-based innovation ensures proper utilization of the available human resources unlike technologybased development that can as well be managed through automation. In the present era of globalized ideas, skills and resources, knowledge development is a key factor that can attract high potential novices towards the developing SMEs.SME, the new powerhouse of employmentA recent article by Forbes, called ‘Small Giants’, documents the journey of several SME businesses to $100 million in turnover within just a few years of operation and with teams of less than 300 employees. Each of these companies have a different cause of evolution, but the common factor is in their use of extensive innovation and administrative clarity. These two factors alone can bring improvisation to the doors of any SME based anywhere on the world map. To carry forward the visions of such innovative and structurally well connected SMEs, 37% of every 9000 graduates around the world are ready to work and learn in the friendly and micro units of SMEs today, as according to an article published in the UK based magazine, HR. Considering this reality shows that SMEs can certainly be the new powerhouse of innovative employment creation for fresh talents in the upcoming years.


DominicMore about the Author

Dominic Nair, CEO of Talent Multipliers is a people and culture strategist who partners with CEOs and business leaders of SMEs to grow and transform their organisation’s human capital and deliver tangible business results.


After 25 years of experience and holding executive leadership positions across multiple industries in both private and public sector, Dominic knows what truly drives engagement and organisational performance. It is how well an organisation can harness individual potential and drive massive action needed to create desired outcomes.


Over his career, Dominic has developed and led successful people solutions and strategies across 50 organisations in international markets covering small, medium and large businesses. In addition to his extensive experience across HR, compensation and benefits, executive reward, leadership development and M&A, Dominic is also a trained business and executive leadership coach.


For information on how Talent Multipliers can support your business, visit us at