INTERNATIONAL HUMAN RESOURCE

TABLE OF CONTENT
TITLE

PAGE

INTRODUCTION

STRENGTH OF SME

3-4

OBSTACLE FACED BY INTERNATIONAL HUMAN

RESOURCE IN SME

5-7

RECOMMENDATION

REFERANCE

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INTRODUCTION

Doing business is no longer the same. With the emergence of new players
and industries, companies especially the SMEs can no longer depend on the
traditional way of doing business. Everyone have a different opinion or
perspective when you ask about SME. SME have a broad definition to define
such as if you ask European they will give SME definition based on number of
employees, annual turnover, annual balance sheet total and level of
autonomy. Different goes to UK Government's Small Business Service and it
defines a small business as a business with fewer than 50 employees and a
medium size businesses as those with 50 to 249 employees. For me, there
are no specific definitions about SME. Overall, what can we conclude is SME
tends to be an independent, managed by its owner or part-owners and has a
small market share. In Malaysia, the definition of SME is based on two
criteria, namely the number of people the business is employing, or revenue
it makes. Business can be called an SME if it meets either one of the two
criteria. Within the SME itself, there are also terms that are used to describe
if an SME is a Micro Enterprise, Small Enterprise or Medium Enterprise, and
again this depends on the criteria. However in 2005, the National SME
Development Council announced the official and standardized definition of
SME. The definition is used across various sectors, and adopted by the
government ministries, agencies and financial institutions which are involved
in the development program of the SMEs.

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STRENGTH OF SME

Small and medium-sized companies (SMEs) also play an important role in the business world.
They also contribute a large scale to world economy and this is because that SME also have their
own strength. The strength of SME as below:
a. Connecting People to Purpose
Small businesses have an enormous advantage compared to the large business in their ability to
help people connect to the mission and purpose of their organization and enable them to see what
they're doing is contributing to that purpose, in a meaningful way.
b. Effective Communications
As organizations grow, communication challenges grow as well. In fact, they grow dramatically
faster (exponentially) than the organization headcount does. For example when your company
has 3 employees or works, which means there are only 3 possible different interactions. If your
company has 500 or more employees, this means there are 300 possible different interactions.
c.

Timely decision making

Decision-making is different in smaller organizations, compared to much larger enterprises. As

organizations increase in size, the leadership team moves generalists to specialists who are
responsible for a particular business area or function. Because top decision-makers in larger
organizations are more insulated from day-to-day activities of the company, they no longer have
the first-hand knowledge to make decisions without the input of several other specialists. Which
this will lead to the slower and often lower-quality decisions. In smaller businesses however,
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there are fewer decision-makers, and they're so close to customers, employees, suppliers and
daily operations, they can get a much more accurate sense of whether a decision is right or
wrong

d. Customer good relationship with organization

In small organization, a much greater percentage of team members work with customer directly.
This includes the leaders in the organization, who frequently are still involved in closing sales or
supporting clients. This kind of closeness to customers means the people in the company know
customer issues and they can spot changing market needs earlier.

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OBSTACLE FACED BY INTERNATIONAL HUMAN RESOURCE IN SME

HR executives in SMEs clearly experience similar challenges to their counterparts in large

companies. By far the most prevalent is talent management, although they are also concerned
about cost savings and performance of the HR function. HR executives also feel that they lack
sufficient time to deal with these challenges. There are several factors that contribute to the
challenges that are facing by a global human resources people. Below are several factors that
contribute to the challenging that need to be facing:

a. Lack of Human Resource

Implementations of some bigger scale IT project especially those that involve business process
across different departments or require large amount of initial data entries require human
resource during the implementation. Some SMEs are often in the stage of frequent fire fighting
and shortage of manpower. This makes it very difficult for them to allocate time to carry out
implementation. In addition, there is always a conflict between getting the daily routing work
going and to do the IT implementation.

b. Human resource activities is doing by own family

Because of its small organization or company, some of the owner of the company rather to hired
their own families members such as their spouse, children, uncle or any other relative to take

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over Human resources activities. This will be some problem to the company to apply and follow
any rules and regulations.

c. Problems retaining qualified people

Every company required a qualified people to run their business. This is important to make sure
that the qualified people can help and use their skill to increase company profits. When you hired
a very talented people or skillful people to work with your company especially the SME
companies, your companies need to deal with some obstacles which is to retaining qualified
people. Why all this happen is because Small to Medium enterprises have some difficultly in
order to pay a high salaries which balance with a skill and talents that their employees have.
Because of this factors also, some SME company hard to maintain their talented employees
because their employees will go to another big company which can offer them with a very high
salary.

d. The challenge of learning

Learning is very important to take over the global environment of a modern business, especially
when your business is cross border alliances. Although organizational learning is a neglected
area in SME, early evidence shows that it may different between small and large organization.
Training and development activities tend to be rather short term oriented in SME and not
supposed to meet long term strategic needs. The distinctive cultural features of a small
organization indicate an informal learning approach using local networking and socializations
rather than formalized training

e. Problem in performance appraisal

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Performance appraisal is a process to assess the extent to which employees perform the job well.
This appraisal gives employers the information on the employees progress in implementing their
jobs. Performance appraisal has been acknowledged as strategic HR practices, which are results
or behavior oriented. Behavior-oriented appraisal center on the employees behavior that is
needed to perform the job effectively while result oriented appraisal emphasis on the upshots of
those behaviors. However, this practice is also likely to be informal in small firms and tend to
focus on monitoring and controlling rather than employees development.

f. Lot of works but least of workers

Because of it SME companies, they dont have any enough money to hired employees more than
5 to 10 people in one companies. So they will hire a small number of workers and this will give
impact to employees. Employees need to do more than they should do. Sometimes one person is
required to do 4 activities of human resource because their company is lack of employees. This
will make their employees restless and not satisfied with the salaries received.

g. Weak or no employer branding candidates do not have a good knowledge of the overall
organization or do not have a good experience during the recruitment exercise
SME companies dont have a choice in choosing candidates to fill the position that is available in
the company. This is because they cannot afford to offer a higher than average starting salaries
because they dont have enough money. So that they will hired somebody who dont have any
experience, dont have any knowledge about the business or even hr areas. With this kind of
candidates, this will show to other companies that their company has a weak and no employer
branding at all.

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RECOMMENDATION

To overcome some challenges or obstacles facing by international human resource in SME

companies, there are several solutions or step that can be taken as a first step to overcome it:

a. Measurement of hiring effectiveness

The HR can extract useful indices such as quality of hire, cost per hire, days to fill job, candidate
experience and many others from the service providers. This will enable the HR to focus more on
strategic issues rather than administrative tasks of the hiring process.

b. Quality of Hire
This is of critical importance to any organization whether there is a good fit
between the job and person. By outsourcing the hiring to experts, it has been
proven that the quality of hire will improve. This means that the new hire
performing better on the job and eventually affecting the organizations
overall operational effectiveness and profitability in a positive way.

c. Employer branding
Having mentioned outsourcing as one of the strategies in managing talents,
the responsibility on employer branding still remains with the organization.
Companies need to brand themselves as choice employers just like how they
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brand their products and services. There are some distinct advantages of
being an SME which need to be communicated to job seekers and existing
staff. Being small can be an asset in many instances. Having staff strength of
less than 300 makes an organization a lot more nimble, fast and flexible
compared to larger MNCs which often wait for global initiatives before
implementing changes in their HR policies and practices.

REFERANCES

International human resource book

www. International hr, obstacles.com
obstacles,solution,step in hr international.1435.com
http://www.jstor.org/discover/10.2307/257175?
uid=3738672&uid=2&uid=4&sid=21102444956591

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