Why SMEs Have Difficulty Retaining Talents

By Julie Goh

SMEs form the biggest group of employers in Malaysia. Many graduates would have started their career in an SME. This means SMEs have the opportunity to get new talents fresh out of school who are energetic and eager to prove themselves. However, many of them end up unfulfilled and seek better opportunities elsewhere

Here are some potential obstacles that would deter employees from building their careers in an SME.

1. Limited career advancement opportunities: In SMEs, there may be fewer levels of hierarchy and a smaller number of available management positions, which can limit the opportunities for employees to advance their careers.
2. Lack of formal training and development programmes: SMEs may have limited resources to devote to employee training and development, which can make it harder for employees to acquire the skills and knowledge necessary to move up the corporate ladder.
3. Nepotism or favouritism: In some SMEs, family ties or personal relationships may play a larger role in determining who gets promoted, which can make it harder for employees who don't have these connections to advance.
4. Limited exposure to different departments or functions: In smaller organisations, employees may have limited exposure to different areas of the business, which can limit their opportunities to acquire new skills and make it harder for them to transition to different roles or departments.
5. Lack of clear performance metrics or criteria: In some SMEs, there may be a lack of clear and objective performance metrics or criteria for advancement, which can make it harder for employees to understand what they need to do in order to move up the ladder.

The existence of these obstacles will depend on a variety of factors, including the size and structure of the organisation, the industry it operates in, and the specific culture and practices of the company.