Shilpa Vaid, HR Head, Prione & Cloudtail, speaks with Human Capital about how SMBs capable of adapting can find success amid the COVID-19 crisis, how they can attract great talent and the lessons they must take from the pandemic experience.

How do you see the pandemic’s impact on SMBs (Small and Medium-Sized Businesses) in India? Which transformations do you believe are likely to extend into the post-pandemic era?

The SMB sector was one of the most highly impacted sectors in India in the past year in terms of the workforce being displaced, shortages in working capital, the slowdown in economic activity, and so forth.

More recently, the second wave of the pandemic adversely affected the Indian SMB ecosystem. Localised lockdowns impacted operations leading to lost sales for several small businesses. With many large key manufacturing hubs such as Tirupur being under lockdown, there was a paucity of raw materials disrupting the operations of downstream manufacturers.

Lack of production also led to a lack of payments for businesses, which dried up capital and hampered supply chain and labour resources for production. Various government import and export restrictions further compounded the challenges for the segment, with many SMBs forced to scale down, shut down or sell their businesses in order to stay afloat.

However, the past twelve months also offered SMBs immense opportunities to appreciate the benefits of adopting e-commerce. Several SMBs started actively seeking ways to build their online presence to scale and succeed.

The second wave of the pandemic has triggered strong e-commerce tailwinds where we are witnessing a higher intent among SMBs to trial online marketplaces and digitise their businesses. In line with this, HR leaders have been compelled to identify new skillsets required, hire the right talent, build necessary capabilities and invest in the overall development of their workforces to succeed in the new normal. I believe this transformation will continue in the coming year.

HR leaders across organisations are smack-dab in the middle of reimagining how people and businesses can thrive, rethinking workforce practices and realigning them with the new norms of working. What are the top HR challenges facing SMBs that differ from those confronting well-established companies?

The pandemic has truly brought to light the significance of the HR function in both SMBs and larger organisations. It has never been more crucial for HR to partner with other verticals to manage talent, culture and lead the organisation through change.

In SMBs, it is common to find that they do not have a dedicated HR department. While this may be due to budgetary reasons and other factors, it inherently limits their ability to deploy the right talent strategies. Hence, it’s crucial to ensure that they have the right HR personnel lending direction to the organisation as it grows.

Some key challenges SMBs continue to face are a limited talent pool, inability to offer competitive salaries, and fierce competition. Moreover, in the new normal, these challenges have been exacerbated by the need to unify remote and displaced workforces, set up the necessary infrastructure to support them, identify and hire new skill sets, as well as onboard new hires virtually.

HR leaders must also be agile in designing and deploying workplace policies in line with the evolving talent landscape. For example, they will have to ensure their employees and families have access to COVID-19 vaccines and other healthcare benefits as needed.

When compared to large organisations, SMBs will also need to invest heavily in learning and development programs to achieve desired business outcomes leveraging a smaller workforce. Further, as the organisation transitions into a successful digital entity, HR will need to focus on creating a high-touch and high-care work culture that puts people’s wellbeing first.

Many organisations are hiring CXO talent on an on-demand basis to access high-level experience at an affordable price. What are the pros and cons of such an engagement in SMBs?

In recent times, it has become increasingly common for SMBs to hire a senior-level executive on-demand who works as a full-time employee but at a much lower cost and, more importantly, in line with the new norms. In most cases, these executives work with multiple companies simultaneously and therefore earn their deserved full-time salary.

This model serves as an effective method for SMBs to bring in industry best practices, tackle crises, make the right decisions, streamline their processes, implement new solutions and upskill their existing talent for as long or as short as the engagement lasts. These executives can also help SMBs use the latest marketing and social media best practices and upgrade their IT infrastructure.

While this gig model is gaining popularity in India, it is also important for SMBs to create a steady pipeline of senior talent and clearly layout plans for leadership succession.

What are some ways an SMB can attract top-level talent who might otherwise join a larger company, say an MNC?

SMBs not only contribute significantly to the country’s GDP, but they are also central to enabling the country’s growth and innovation. As previously stated, one of the key incentives they can offer talent is senior to top management positions with competitive pay scales. This can attract talent who are driven, seek autonomy and flexibility in their work, and want to play a role in shaping the success of small businesses.

On a different note, millennials’ choice of the workplace today is driven by their values. Young professionals want to work for businesses where they believe they can make a difference and contribute to society. By joining the SMB sector, which employs over 130 million people, they can take pride in contributing to the shared success of entrepreneurs across the nation.

Looking back over all that you have overcome since the pandemic, what’s one lesson from the crisis you’d like to share with HR and business leaders?

The pandemic brought with it numerous challenges – a lot of us faced both professional and personal setbacks. In such an environment, a leader’s ability to persevere in the face of uncertainty has become a crucial skill. This means taking the time to assess, permitting ourselves and our teams to try new things and becoming comfortable with failure.

How we respond as leaders in the face of uncertainty shapes how our teams react. Do they feel demotivated, or are they inspired to find creative and innovative solutions? Reinforcing the organisational purpose and keeping it as the true north help teams build resilience during difficult times.