Published 20 December, 2023

Navigating the Shift: The Rising Importance of Contemporary People Practices in Indian SMEs (5 min read)

In the wake of the COVID-19 pandemic, the landscape of the business world underwent a radical transformation, and nowhere is this change more evident than in the realm of people practices within Small and Medium Enterprises (SMEs) in India. The dynamics of the workforce have shifted significantly, prompting SMEs to rethink and revamp their approaches to talent management and employee engagement.

The Post-COVID Paradigm:

The aftermath of the pandemic has brought about unprecedented challenges, with SMEs grappling with attrition levels that were previously unheard of. The surge in entrepreneurship across India has empowered the young workforce with an array of employment options, leading to heightened expectations regarding working conditions, organizational culture, and benefits. As a result, SMEs are witnessing a churn rate that demands immediate attention.

The Wake-Up Call for SMEs:

Recognizing the critical need for contemporary people practices, SME business owners are redirecting their focus to the people function with an intensity never seen before. The realization that a robust and employee-centric approach is vital for retention and productivity has prompted a paradigm shift in the way SMEs approach human resources.

Investment in People Function:

The willingness of SMEs to invest in the people function has reached unprecedented levels. Business owners are acknowledging that a satisfied and engaged workforce is not just a boon for employee morale but is directly tied to organizational success. This shift represents an opportunity for independent consultants specializing in people function to add substantial value.

A Note of Caution:

While the eagerness to enhance people practices is commendable, SME business owners should exercise due diligence before engaging a people function advisor. The market is flooded with consultants, and selecting the right partner is crucial for a successful transformation. Understanding the unique needs and culture of the SME is paramount to implementing effective changes.

Managing Expectations:

It is essential for SMEs to approach this shift with realistic expectations. People interventions are not overnight solutions; they require time and consistent effort. The transformation may be gradual, but the long-term benefits are significant. Business owners should understand that investing in people practices is an ongoing commitment that yields dividends in terms of talent retention, organizational resilience, and enhanced productivity.


As SMEs in India navigate the evolving landscape of contemporary people practices, the journey is one of adaptation, learning, and growth. The recognition that a satisfied and engaged workforce is a cornerstone of success is propelling SMEs into a new era of employee-centric business practices. With the right approach, SMEs can not only weather the challenges posed by the post-COVID world but also emerge stronger and more resilient than ever before.


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