SINGAPORE – Talent acquisition and retention are the biggest challenge faced by small- and medium-sized enterprises (SMEs), said more than half of surveyed executives, according to a report by the World Economic Forum (WEF) published on Tuesday (Nov 30).
The results were derived from an analysis of more than 200 peer-reviewed articles and engagement of more than 300 chief executive and founders of SMEs globally through surveys and in-depth interviews.
SMEs struggle to create appropriate development opportunities and career paths for their employees, making it difficult for executives to attract and keep talented employees, said the report.
Compensating employees in a competitive manner is also a challenge faced by SMEs as they try to attract talent from the same pool as larger organisations, stated the WEF report.
Other challenges faced by SMEs, as highlighted in the report, include expansion (according to 43.8 per cent of respondents), funding and access to capital (35.7 per cent of respondents), non-supportive policy environment (21 per cent), and the difficulty of maintaining a strong culture and clear company purpose and value (20 per cent).
A severe loss of income due to the Covid-19 pandemic has also led more companies to rely strongly on the resourcefulness of their staff, further increasing the importance of acquiring the right talent.
In Singapore, SMEs (defined as companies with annual turnover of less than $100 million or with no more than 200 employees) employed 70 per cent of the workforce here last year.
To overcome the challenges of attracting and keeping talented staff, SMEs can offer opportunities beyond tangible rewards, such as creating a unique vision, culture and tailored self-development opportunities for their workers, said the report.
This is especially important to the new generation of workers who have a growing preference for engaging with companies that have missions centred on positive societal impact, it added.
Societal impact is measured by the extent to which companies pursue sustainable development goals, which aim to address global challenges such as climate change and inequality.
The report found that the three key characteristics of SMEs that respond to shocks and seize opportunities amid disruption are the ability to maintain sustainable growth, the drive to create positive societal impact from their business outcomes, and their adaptive capacity to bounce back in difficult times.
“We hope this will inspire and encourage SMEs and mid-sized companies to harness their potential in becoming a major driver of sustainable and inclusive economic growth and innovation by focusing on several core dimensions of future readiness,” said WEF president Borge Brende.