The presentation elucidates various issues related to Human Resource Management, specifically, those related to recruitment and selection, in MSMEs in India and their solutions.

1. Various Issues Related to HRM
(Recruitment and Selection) In
MSMEs
Presented by:
Ayushi Singh
Vishwanath Tripathi
Semester III (MBA – M52)
MONIRBA, University of Allahabad

2. CONTENT
MEANING OF RECRUITMENT AND SELECTION
IMPORTANCE OF RECRUITMENT AND SELECTION IN EVERY
ORGANIZATION
ISSUES RELATED TO RECRUITMENT AND SELECTION IN
MSMES
CONCLUSION

4. MEANING
RECRUITMENT: Recruitment is the process to discover the sources
of manpower to meet the requirements of staffing and to employ
effective measures for attracting that manpower in adequate numbers.
It is a positive activity which aims at inviting maximum number of
applicants for the job.
SELECTION: Selection involves the process to select the appropriate
candidate for the job and rejection of remaining applicants.

5. IMPORTANCE OF RECRUITMENT AND SELECTION
IN MSMEs
MSMEs play an important role in the economies of countries because of
their employment generating characteristics.
Hiring the right employees for business can positively affect their
turnover rate, company culture, production and profits.
HR and its different facets also plays an important role to address the
growth issues that MSMEs face.
This sector is considered to be engine growth due to their contribution
to income generation and employment.

6. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Finding the best place to recruit: This is a perennial problems of
MSMEs to lack the market or web presence that large companies have.
It can be possible for potential employees to be unaware that small
companies do exists.
Solution: There is a lot of data about which recruitment website or
agencies are best in MSMEs sector. So MSMEs should start collecting
their own data and should keep record of its sources so that next time
they spend their advertising budget at the right place.

7. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Finding and recruiting the high quality sales people: MSMEs face
major challenges in finding and recruiting the quality sales people. The
impact of employing average or poor human resources can seriously
hurt MSMEs as these companies rely on smaller number of human
resources.
Solution: MSMEs can invest in health checks which reviews how the
sales function is performing in terms of people, process and customers.
This check also highlights the area which need to be developed so that
MSMEs can enhance their sales function.

8. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Competing with bigger companies to hire the best talent:Its not
unusual for MSMEs to go through the entire recruitment process only
to find the best candidates. This represents a major waste of time and
effort especially when MSMEs does not have a dedicated HR
department.
Solution: Communication is key. Give timely feedback to applicants at
every stage of the recruitment process and aim to build a rapport.

9. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Promotion from within: Selecting the talent that’s already in the
company can save money. In internal recruitment, favouritism could
also be a problem. In addition, promotion from within the
organization may deprive your company of the fresh perspectives that
new talent can bring.
Solution: To provide new training and development practices to
existing employees so that they could match the outside competition.
External candidates are more often recruited for higher level positions
because the employer needs the skill set that the current employee
base cannot provide.

10. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Problems with retention : It is very difficult for MSMEs to retain
talented candidates because market competitiveness is growing and
that needs more collaborated efforts to establish loyalty among
employees.
Solution: They must ensure that what is your role in the organization
and clear how they could grow in the organization.

11. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Neglected HR department: A competent workforce is perhaps the most
important asset of any organization. HR activities are often neglected by
many Indian MSMEs. As per a survey conducted by Confederation of
Indian Industries (CII), around 80% of the small enterprises and 20% of
medium enterprises, respondents indicated having no formal HR
department.

12. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Incomplete job analysis: One of the most serious problems of
recruitment in MSMEs is not knowing the nature of the position for
which they are hiring.
Solution: MSMEs should routinely conduct a job analysis for each
position and create a complete description of its function and tasks.
Without job analysis, your job posting might not accurately reflect the
skills and traits required and selection tools might not accurately access
candidates.

13. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Misalignment: Even with an awareness of a job’s purpose, MSMEs
can have misalignment in the job description and selection tools used
for recruitment and selection of human resources.
Solution: HR department of MSMEs can have a meeting prior to job
posting with their mangers and comittees, during which they can
discuss the job and qualifications and outline their recruitment and
selection material.

14. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Lack of proactive HR strategy: MSMEs always need to keep an eye
on the future. Companies need to power future growth.
Solution: Hiring people with potential, nurture the right skills and
attributes to drive your company forward.

15. VARIOUS ISSUES RELATED TO RECRUITMENT
AND SELECTION IN MSMEs
Process of recruitment and selection is expensive: The cost to hire
human resources could be a problem for MSMEs. Recruitment cost
include advertising space, professional membership, job fair sponsorship
and college recruiting trip which could be very high.
Solution: Outsourcing can relieve MSMEs from responsibility to hire
and manage employees.

16. CONCLUSION
MSMEs contribute to economic development in various ways such as
creating employment opportunities for rural and urban population,
providing goods and services at affordable costs.
HRM is important in MSMEs as it provides employment opportunities
to low skilled workers.
In order to maintain day to day business opportunities, MSMEs are
unable to manage the HR process. Most of the time, HR practices are
considered unresponsive, time-consuming and a non- priority tasks by
the MSMEs.
That’s why MSMEs have to face a fair share of challenges in
recruitment and selection.