Managing Talent within SMEs

Organisations are social so understanding and managing the people in them is critical to successful business leadership. As owners or managers we need to know how to attract, select, develop, reward and retain people. Within organisations these processes are referred to as Talent Management. The emphasis falls on the interaction between the people and business, interaction that supports the fulfillment of its purpose and the achievement of its strategic objectives.

There are many definitions of the term Talent Management, for instance, should talent management include all staff or should it be more exclusive focusing on a select group of high performers or high potential employees? For the purposes of this article I refer to an inclusive approach to talent management as research suggests that this is a common approach taken by SMEs. In this approach ‘talent’ refers to the set of knowledge, skills and behaviours that each employee has.

It’s all about the People

Paradoxically, as people we are unique and yet we are the same. Whilst each and every one of us is different, we have certain common, generic needs that we strive to satisfy in various areas of our lives. Being aware of what these needs are within the work context and understanding how they can be satisfied gives us insight about how to relate to people as they enter and then work in organisations – it gives us insight about how to manage the talent within.

As you read through the needs below, think about how they relate to your own experience. Certain needs may be stronger than others however it is likely some of them will feature to some extent:

  • To have clarity of what our role entails and what is expected of us
  • To be given feedback on our progress
  • To learn, grow and develop
  • To feel aligned with the organisational purpose and culture
  • To contribute to the organisation’s mission
  • To be remunerated fairly
  • To be acknowledged and recognised
  • To have a collegial working environment
  • To be treated fairly

When these needs are satisfied people feel engaged at work and are motivated to give their best and perform at their highest level.

It’s all about the Business

What about the needs of the organisation? Individual business needs vary according to factors such as industry, size and goals. However in general, the business needs to fulfill its purpose and mission; it needs to achieve its strategic objectives, be they financial sustainability or growth focused; it needs to recruit talented people, it needs its people to be on board with the organisation’s objectives and to work together towards achieving them. The organisation needs its people to be engaged.

Talent management provides a potential win-win situation for both the business and the individual in all enterprises, be they large, medium or small. Skillful talent management offers the possibility of fulfilling the needs of both the individual and the business.

The SME context – Satisfying people & business needs

We’ve established that we need to know how to attract, select, develop, reward and retain our people, we need to know how to satisfy our people’s needs in these areas and we need to know how to achieve our organisation’s purpose and objectives through our people. The question is, how do we do all this within the SME context?

Larger organisations have certain advantages over SMEs in areas such as brand visibility, professionalised functions and deeper pockets. However research has shown that the SME context presents a number of advantages that could help attract and retain people.

“SMEs can provide a creative environment where new ideas and innovation flourish (Zenger & Lazzarini, 2004). Research highlights a number of advantages of working in a SME organisation from the employee perspective including perceptions of better job quality and less bureaucracy (Storey et al., 2010), better job satisfaction due to higher flexibility, a better working atmosphere (Iddson, 1990) and more informality in the workplace (Dundon & Wilkinson, 2009).” (Krishnan & Scullion, 2017).

Informality in the workplace however can be a double-edged sword in all areas of talent management. Whilst it is one of the advantages, it can also work against the SME’s need to engage its people. Informality is great when it comes to the atmosphere at the office and when it describes the ease of relating to one another, however it can become detrimental if we take an informal approach towards recruitment, development and retention. Each area of talent management needs thought and consideration in the planning and follow-through stages no matter how big or small the organisation is. The individual needs are present in whatever context. I can work with the largest organisation in Malta or I can work with the smallest one, my needs for role clarity, feedback, connection and fairness; my desire for professional growth, are present in all contexts.

How an owner or manager activates each area of talent management can vary, what is critical is that talent management is carried out deliberately with a clear vision of what it hopes to achieve – engaged people working within the organisation. In July 2014, CIPD, which is a UK-based professional body for HR and people development published a research report that examines the different approaches that SMEs can take to recruit and develop their people and includes some useful insights for organisations.

Two concrete examples of how to make talent management deliberate are role profiling and taking a coaching approach with staff. Role profiling provides clarity about what the role entails and the competencies needed to fulfill the role and at the same time creates an accountability structure. These can be updated regularly to cater for evolving needs of the small and medium enterprises. You can’t begin to manage your people unless you clarify in a meaningful way what you expect of them and this is different from a job description in the form of a task list. When there isn’t the internal expertise to set up such structures such as role profiles, SMEs have the option to turn outside the organisation for support.

Another example of deliberate talent management is taking a coaching approach with staff. This ticks many of the boxes for satisfying our people’s needs within the work context. It is considered best practice to have ongoing coaching conversations with staff and this is one practice that serves people well in both large and small organisations. Research has repeatedly found that giving people the opportunity to learn and grow increases their satisfaction, motivation and engagement making them more likely to stay with the organisation and taking a coaching approach is a key enabler of a person’s growth. It is a cost-effective way of developing and engaging staff that has exponential returns.

The role of culture, trust and the leader

Any talent management initiative takes place within the wider context of the culture of the organisation. Culture is about how people think and act on a daily basis (Connors & Smith, 2011). The now famous saying “culture eats strategy for breakfast” sums it up nicely. Effective talent management is more than a strategy, it goes deeper into the DNA of the organisation; it is about culture; it is about values … and it starts at the top of every organisation. It has to be recognised though that in order to grapple with the idea and practice of talent management, leadership has to believe that its people are good, motivated and that they have potential. In an organisation led by an autocrat who believes that people are essentially driven by their managers rather than themselves, talent management is doomed to fail. The leader plays a critical role in embedding a healthy culture based on trust and accountability that in turn provides the rich foundation from which effective talent management can really happen in a meaningful way that delivers tangible results and a healthy ROI.

Concluding thoughts

Talent management in SMEs is valid and valuable. Are you leveraging the benefits?


  • Talent management and dynamic view of talent in small and medium enterprises. TN Krishnan & Hugh Scullion, Human Resource Management Review 27 (2017) 431-441.
  • Recruiting and developing talented people for SME growth. J Miller, CIPD Research Report (2014)
  • Change the culture, change the game by R Connors & T Smith, (2011)
  • The new rules of talent management: HR Goes Agile, P Cappelli & A Tavis; Co-Creating the Employee Experience, L Burrell; One Bank’s Agile Team Experiment, D Barton, D Carey & R Charan, Harvard Business Review March-April 2018 issue
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