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Term Paper

TOPIC----------------Recruitment challenges faced
SME’s.
PREPARED BY-----Haziq Mushtaq.
SECTION------------318.
ROLL NO. -----------B-60.
SUBMITTED TO---Mrs.Tavleen Kaur Gill.
LOVELY SCHOOL OF
BUSINESS.
LOVELY PROFESSIONAL
UNIVERSITY.
Table of Contents:
Introduction to SME
Recruitment and the process involved
Challenges faced by SME’s
Overseas challenges
Suggestions to overcome challenges

What are SMEs?
Small and medium enterprises (SMEs) are businesses that employ up to 250 people. No one is precisely sure how many of them there are because there are lots of companies that have limited liability status but are not trading and there are lots of businesses that are sole proprietorships that have escaped the official net of the tax man, the VAT man and the registrar of companies. We will see figures that range as high as 4.3 million and as low as 3.7 million, the best estimate being around 4.0 million. Although the most usual definition of an SME is a company employing up to 250 employees, nearly all (over 99%) employ less than 50 people. In fact, three quarters of them don’t have any employees – they are sole operators. So, the emphasis really is on small rather than medium in the SME label. The engine of economic recovery

The significance of these small businesses is often overlooked. They are the ants in the ant hill rather than the more glamorous animals of the forest. And yet they make up a half of all the jobs in the UK and account for half of our GDP. Because they are small and tightly managed, decisions can be taken quickly and they are flexible in responding to changes in the temperature of the market. In the UK as in the rest of the world, SMEs are recognised as the most responsive engine of economic growth. Who are they?

There are over 1,500 different classifications of SMEs. These are referred to as Standard Industrial Classifications by the Government and they are used to describe the nature of a company’s business. As might be expected, SMEs do not compete where large capital investment is required for process industries. Therefore, they do not exist in car assembly, steel making, cement manufacture and the like. They are found in profusion in the service industries from vehicle servicing, hairdressing, retailing to the professions. There are manufacturers, of course, and they operate across most industries from complex electronics to traditional businesses such as metal bashing and wood turning. The SME shopping basket

Every SME purchases goods and services in the pursuance of its business. They all have some basic needs such as telephones, stationery and they consume energy. Nearly all have office furniture and operate vehicles. They rent property and they buy legal and financial services. Depending on their industrial classification, they also will buy materials of one form or another. In total this adds up to over £1 billion of products and services per annum. Safety in numbers

The most surprising thing about this huge shopping basket is that it is often ignored by marketers who have their sites on the larger corporations that appear to make easier picking. Whilst it is true that large buyers are easier to line up in the sight of a marketing rifle, they are not necessarily the most profitable. Slimma enjoyed being a main supplier to Marks & Spencer until M&S changed its buying policy and it lost the business. It not only lost the business; it went out of business. In contrast, RS Components has always seen the potential in SMEs and through its next day postal delivery service, it supplies a myriad of bits and pieces to businesses at premium prices and good margins. A simple decision making unit

There are no complicated purchasing teams in SMEs. Very often it is just the boss who is tea...
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