Hr Prcatices

• Reluctance to Invest:

Majority of the small and medium enterprises (SMEs) in Pune are reluctant to invest in human resources (HR) services in their respective firms. They seem to have failed to realize the importance of having an HR department, which has a vision for retaining talent, developing skills and also managing hidden and known talents in the workforce. They do not gather that an HR department can help with all issues faced by SMEs – in managing everything within a holistic framework of their organization.

• Constraints involved in investments

HR consultancies and industry representatives are of the opinion that physical and psychological barriers are the biggest constraint in investment in these initiatives. Moreover, SMEs in Pune lack the mechanism needed to collect the structured inputs to manage HR challenges. Financial constraints are also a major hindrance stopping SMEs to appoint HR personnel. Small firms do not have enough funds to make substantial investment in HR initiatives.

• Lack of segregation

Many SMEs do not have department separations, hence lack chartered policies. Several employees in such industries are also reluctant in contributing to statutory contributions such as ESI, PF from their salaries. They are aware of their statutory right but are reluctant to share their income. Recently, ESI also reduced hospital facilities and these hospitals are not equipped enough to treat patients. Hence, the employees feel that it is a wastage of money to subscribe to these contributions.

• Outsourcing of HR function considered a better option

Some SMEs believe that if they decide to follow the norms as per HR tasks, the focus might shift from hard-core business and product development. Quoted by a SME “Since we are small in size, our approach and coordination is what