The role and importance of SME’s in Nigeria economy has been the subject for increased attention particularly in the 1990’s up to date. SME’s have been known to be the backbone and industrial hob for development in nation building. What then is the development agenda for its short, medium and long term goals in enhancing the business growth survival and development. This study investigated the impact of Manpower training of selected SME’s in Enugu. The study therefore sought to assess how Manpower training activities and practices have been used to the benefit of SME`s. The researcher used in-depth interview technique in gathering the data. The respondents were required to respond to different sets of questions posed by the researcher to solicit for the appropriate responses. The findings revealed that majority of the SME`s do not have Manpower training policies and programmes that would ensure their growth and survival. Again, managers of the SME`s run a one-man-show, where the owner or manager takes all the major decisions concerning the business. As such, the owner decides at his or her own will, as to when and who to have training and development. The study therefore, recommends that training and development programmes such as short and regular courses, workshops and other advanced learning courses are needed for the different categories of business within the SME`s sector.
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Significance of the study
1.6 Scope and limitation of the study
1.7 Definition of terms
1.8 Organization of the study
2.0 LITERATURE REVIEW
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.2 Data analysis
- Background of the Study
It is often said that an organization is only as good as its people. Organizations of all types and sizes, including schools, retail stores, government agencies, restaurants, and manufactures, have at least one thing in common. That is they all need people; Human beings (Human capital) to run the organization. It is therefore incumbent for all of them (organizations) to employ competent and motivated workers to ensure the growth and survival of the organization. To compete and thrive, this need has become even stronger as organizations grapple with the challenges presented by a fast paced, highly dynamic and increasingly global economy.
There is a growing recognition of the important role Small and Medium Enterprises (SMEs) play in economic development. They are often described as efficient and prolific job creators, the seeds of big businesses and the fuel of national economic engines. Even in the developed industrial economies, it is the SME sector rather than the multinationals that is the largest employer of workers (Mullineux, 1997). Governments at all levels have undertaken initiatives to promote the growth of SME’s. The SME’s plays a pivotal role towards economic development regardless of an economy’s size. It creates employment, increases production base and provides support to large scale enterprises. Economic revival after the East Asian crises of 1990’s and global financial crises of 2009 have forced the policy makers to look towards stronger domestic markets being led by SMEs. The smaller firms have responded well to the deregulation and liberalization of trade and investment regimes. A survey by the Organization for Economic Corporation for Development (OECD, 2004) revealed that about 90% of total enterprises in OECD are SMEs. Another report, based on 670 Asian organizations concludes that one-half of the SMEs expect to grow significantly in future as they can react and innovate more quickly and have closer customer relationships. The SME sector plays the role of absorbing more labour intensive production processes. Therefore they can be seen to be contributing more towards the socio-economic development through reduction in unemployment. It is an established fact that SMEs have led to a transition of agriculture-led economics towards industry and services for an environment where small and large firms are integrated and attract greater foreign investment and ensure stable terms of trade (Bhattacharyya, 2006).
In the European Union (EU) SME sector employs two thirds of total labour force. The key factor towards employment in the EU. The SMEs have more recently adopted sophisticated Manpower training strategies for better performance in the medium to long term (Hayton, 2003). The human capital and knowledge as intangible assets for SMEs are becoming increasing important in taking future investment decisions and according to the diagnostic approach adopted by Milkovich and Boudreau (2000), the HRD process is divided into four phases as follows;
- Clarity of firm objectives
- Evaluating the external conditions
- Choosing training regimes having long term outcomes
- Evaluating the outcomes regulation
The early efforts in HRD focused more on promoting behaviors designed to deliver firm strategies and were mainly addressing the relationship between employee behavior and company strategy (Snell, et al, 2001). However firms have now shifted towards focusing more on training aspect and innovative skills for remaining competitive in the market, suggesting the fact that as the competitive conditions change, firms evaluate their strategies to strengthen their present and future positions. The owners of SMEs always aspire for efficient and organized enterprise which achieves high rating in terms of profits but not necessarily compliments the employees with high level of motivation under the recent themes in management factors such as reward and motivation plans, acquisition of new technology and skill development are cornerstones for realizing the firm’s objectives(Scheduler and Jackson, 1989).
In addition to this the newly created value of intellectual capital assets, skills, creativity and information provide an edge to a firm’s competitiveness in the market. The quality of employees has been recognized as the most important tool for the long term sustainability of an enterprise. SME’s should therefore ensure a motivated, highly; trained workforce who must form the backbone of any would be enterprise or firm. There is no other source of competitive advantage. “Others can copy our investment, technology and scale – but not the quality of our (employees) people,” Jack Welch, former CEO of General Electrics in an interview in Fortune, summarizes the importance of the manpower training and human capital base of his firm adding: “We spend all our time on our (employees) people …. the day we screw up the (employees) people thing, this company is over” (Fortune, 21 June, 1999).
Many firms and enterprises are too quick to downsize or “right size” in the pursuit of cost cutting initiatives. Other strategic decisions including mergers and acquisitions may threaten the culture that had manpower training as part of its core capabilities. However, the overwhelming evidence seems to be that enterprises do not fully understand the strategies of institutions who embark on Manpower training. The demand for the multifaceted talent is increasingly viewed as an area of interest for public policy researchers and practitioners. Home grown research in attracting and managing talent is important as SMEs particularly in developing countries lack capabilities and infrastructure to make the most of their human capacities and as a consequence tend to have cover levels of average productivity of labour (Brown et al, 2001).
Training of individuals working in firms is a serious need for any emerging industry (SMEs). Factors such as weak in-house training, lack of in-house capabilities for formalized learning, limited knowledge about external training opportunities, desire for short-term results, budget constraints, limited number of trainees, and absence of local peer groups are recognized as the main hindrances of SMEs. The role of HRD practices in an organization or enterprise for improving efficiency and knowledge has been effective for the SME development. Johnson and Devins (2003) have explored the potential of sustained HRD practice for SMEs in UK’s work force and concluded that it has significantly contributed towards firm development and there is significant improvement still needed towards increasing the supply of multiple skills which in turn can bring manifold advantages to the structure of the firm and more importantly influencing the performance of the firm in the Long run. There is a link between HRD efforts in SMEs and its contribution to the competitive advantage of firms. The enterprise with regular capacity building initiatives gains more in the long run and the improvement emanates through innovation and diversification which is realized by new ideas generated by the employees in the firm.
The innovative efforts are most often not limited to the introduction of new products, services or procedures, but may also include the developing of internal operational mechanism in firms to foster technological awareness. SME’s that critically evaluate their business environment and seek to understand their industry and competitive conditions tend to adopt the most suitable set of HRD practices. The SMEs that consider the competitive situation and human resource strategy simultaneously survive the test of time better. The success of a firm depends on its short and long term objectives that aim at promoting a culture of learning in an integrated organizational structure, up-to-date technology, high quality of inputs and more importantly a human resource that responds to firm’s goals. Considering this, HRD is therefore very important for firm’s longer run strategic development (Juani, et al, 2008).
It is evident that the real-life activities of the HRD function go far beyond the core activities of employee development into Public Relations, Marketing and Financing the HRD function itself. This includes “Playing Politics” at senior management level anticipating expectations and attitudes among employees from the highest to the lowest level. The HRD function has to pay attention to a particular point of vulnerability-that training or learning is one of the first business activities to be cut when times are hard and budgets are scrutinized (Donnison, 1993).There is little evidence that SME Owners are particularly attracted to training, either for themselves or their staff, and many have argued that such training has often not been cost- effective, nor has it had the impacts desired. Some argue that this is due to lack of education, inward-looking orientation and lack of perspective of many owner-managers, or their individualism, stress on personal independence and the desire for control (Stanworth and Gary, 1991; Storey 1994).
In Nigeria, many findings suggest that the SME’s sector is very large and appear to be growing rapidly, accounting for one-third to three-quarters of total employment. About 90% of companies registered are micro, small and medium enterprises, providing employment and income to a large portion of the urban-labour force serving as an important contributor to the economy of Nigeria (Aryeetey et al, 1994 and Registrar General’s report, 1994). If SME’s play such significant role in the economy, and are said to be the engine of economy growth in Nigeria, then what accounts for the large number of enterprises start up and close down every year? This thesis is concerned with the mechanisms and programs available in ensuring the growth and survival of SME’s through the effective human resources development. This impulse therefore for this research work is to investigate or look into the Manpower training of selected SMEs within Enugu, and assesses the loyalty and motivation of employees’ available training opportunities and skill development, in improving the growth and survival of SMEs.
1.1 Problem statement
The role and importance of SME’s in Nigerian economy has been the subject of increased attention particularly in the 1990’s up to date. One of the numerous reasons for this attention has been the belief that the health and vigorous SME’s sector is crucial to the performance of the economy, and can thus be considered as an engine of growth and synonymous with economic success for the Nigerian economy. Small and medium scale enterprises have been known to be the backbone and industrial hob for development in nation building (Stokes and Wilson; 2010).In any time of the year, many new ventures are created, but an almost equally large number of business close or die. Research suggests that nearly one half, (50%) of new businesses cease trading or fail within the first three years, and between 15% and 20% do not even last one year. (Barclays Bank Small business Bulletin, 2000, cited by Stokes and Wilson). What accounts for this disturbing phenomenon? Would SME’s then be able to effectively champion the course of nation building? What is the relationship between the business failure rate (Business churn) and its manpower training? What is the developmental agenda for its short, medium and long term goals in ensuring the business growth, survival and development?
1.2 Objectives of the study
There are two main objectives to the study. These are General objective and Specific objectives.
1.2.1 General objective
The general objective of this study is to assess and address the Manpower training needs on the performance of selected SMEs in Enugu.
1.2.2 Specific objectives
The specific objectives of the study are as follows;
- To determine whether man power training is carried out in selected SME’s in Enugu.
- To identify how man power training is applied in selected SME’s in Enugu.
- To establish how man power policies and activities are aligned to the business goals of selected SME’s in Enugu.
- To make appropriate recommendations in improving man power training and activities in selected SME’s in Enugu.
1.3 Research questions
The following are the research questions to be asked in relation to the research objectives.
- How is man power training carried out in selected SME’s in Enugu?
- How is the man power training applied in selected SME’s in Enugu?
- How are man power training policies and activities aligned to the performance of selected SME’s in Enugu?
- How can man power training policies and activities be improved in selected SME’s in Enugu?
1.4 Significance of the study
There is no doubt that people are the most critical of a business resources because it is people that plan and control all other assets; they innovate, design and operate systems and raise the capital necessary to put plans into effect that achieve corporate objectives. Yet in difficult times, when expenses reduction seems necessary, among the first items to be cut are manpower training items such as training and development, instead of receiving increased attention of both managers and the academicians.
It is therefore necessary to access the impact of manpower training within in order to curb the rather alarming rate of business churn and to find more improved ways to ensure their survival, growth and development in Enugu.
1.5 Scope of the study
The main target group for this study was a cross-section of selected SME’s in the informal sector in Enugu. The study covered a total of 135 respondents made up of 15 SME’s from all three business categories of Manufacture, Retail and Service. The study conducted a
1.0 Limitations of the study
The major challenge was the difficulty of getting top-level business gurus and entrepreneurs to grant interviews and solicit for practical first hand experiences as well as unwillingness on the part of prospective respondents to answer the questionnaires. Most of the small scale entrepreneurs and managers, as well as few employees in the informal sectors were either semi- literates or illiterates and as such could not appreciate the rational for the study. They thought the study could be used for other purposes like taxation, and especially when there is much media noise about closing down of unregistered businesses, and the threat of prosecuting employers who fail to pay the social security’s contributions of their employees. The other difficulties include limited financial resources, travelling to institutions and sectors for consultations, advice and expert knowledge, especially those that don’t have offices in the Enugu north, and Enugu south in particular.