The Malta Independent 18 May 2021, Tuesday

Not The big but the small and flexible

Malta Independent Sunday, 8 May 2011, 00:00 Last update: about 9 years ago

The small fruit and vegetable shop around the corner, the kiosk where you get your daily newspapers while walking on the promenade, the popular restaurant that offers delightful yet inexpensive dishes in less than 15 minutes, and the store that offers a large variety of furniture and home accessories one can purchase on-line from its website including free transport service, are part of the mosaic of small and medium sized enterprises that dot our economic scenario.

These examples were identified in the 2009 Small Business Act Fact Sheet Malta reported by the European Commission on Enterprise and Industry. It stated that there are about 32,671 micro, 1,208 small- and 209 medium-size enterprises in Malta. This makes up a total of 34,088 SMEs (99.8 per cent share of companies in Malta) that are providing work for 76.8 per cent of the working population − almost 10 per cent over the European average, according to this Small Business Act Fact Sheet report. These basic figures illustrate that SMEs are the backbone of the Maltese economy, like in the rest of the European Union, where the smaller firms are also sustaining the economies. However, one has to take into consideration that the size of the domestic economy is one of the smallest in the EU in the case of Malta. This fact consequently creates a natural barrier to the emergence of larger businesses in Malta. It is only the size that precludes Malta from having the big conglomerates found in the major economies. Having said this, its SMEs can be equally robust and able to succeed where larger organisations would fail miserably.

However, like in other economies, small businesses have to face particular problems and, according to the Australian Human Resource Institute (AHRI) research carried out in 2006, the identification of good human resources (HR) is a major issue. The AHRI report also highlighted that both the recruitment process as well as managing staff already on board were recognized as being the primary concerns. The SME Observatory survey, conducted by Gallup Organisation in May 2007, while confirming the AHRI’s findings, specified that the shortage of a skilled workforce for small businesses was considered a complex problem by respondents (28 per cent). The Gallup Organisation also stressed that finding appropriate candidates to fill vacancies seemed to be one of the major challenges for new EU member states like Malta, more so than in older member states like Germany. The Gallup Organisation also noticed that SMEs had problems when managing their small staff complement, mainly due to the fact that many posts remain vacant and employers lack ideas on how best to fit staff properly according to the needs of their business. The latest figures made available by Gallup showed that 7.9 per cent of the jobs in Malta available in 2006 with SMEs were not filled.

The results of the AHRI research suggested that one of the causes that triggers the perception of HR as being a problem was the strategy on which small firms base their competitiveness or success. Indeed, AHRI stated that those firms that compete in the market solely on the basis of price, quality or innovation of the good/service and on customer relationships most probably perceive HR issues as a problem than those SMEs that base their strategy on the quality of their staff. In fact, the Australian HR organisation advocated managing employees effectively as the first step to achieve tangible benefits of filling vacancies and retaining staff.

Joe Gerada, CEO of the Foundation for Human Resources Development, said that in the last 18 months he has seen an increase in business from small and medium sized companies that request consultancy and training support for their human resources planning and development. He said that focused business people appreciate that it is the competence and loyalty of their staff that will grow the business. They can only facilitate the environment for this to happen.

Commonly associated with huge and well-teamed organisations, human resources are equally important when managing a small team. In conclusion, it appears that training on HR issues and facing up and resolving HR problems successfully will bring wider productive, economic and social gains, especially in those countries characterized for their heavy dependence on micro, small- and medium-size enterprises, like Malta.

Ms Soriano is a Spanish journalist at the Foundation for Human Resources Development.

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