Training crucial for SMEs

A well-trained workforce is the engine that would drive the economic growth of the Small and Medium Sized Enterprises (SMEs) and, by extension, the GDP of this country as a whole.

This is according to Parliamentary Secretary in the Ministry of Education, Technological and Vocational Training, Senator, Dr. Romel Springer, who delivered the feature address at the Small Business Association’s (SBA) graduation ceremony held under the theme of, ‘Maximising the Economic Return on Education’ recently at the Grande Salle, Central Bank of Barbados (CBB).

He explained that while SMEs play a crucial role in the development of Barbados, there are certain issues that must be addressed before this island can reap the full benefits from this sector and one of these issues is ensuring that staff has access to training opportunities.

“Small and Medium Sized Enterprises play an integral social and economic role here in Barbados. The SME sector accounts for more than half of the GDP of Barbados. Employment in this sector has helped to reduce our high dependence on Government and on tourism for employment. However, this sector has faced challenges, including poor management, weak entrepreneurial skills, poor skills development and lack of resources to invest in skills development and training. It has also struggled to find the time to allocate to training.”

This, in addition to insufficient capital, are two of the main reasons why many businesses in this sector fail, said the Senator.

“Research has shown that there are two major reasons responsible for the failure of Small and Medium Size Enterprises in Barbados especially and they are inadequate capital and a deficiency of appropriate human resource skills. A lack of appropriate training can therefore be a major barrier to the success of SMEs, both at the technical and managerial levels.”

Dr. Springer said that the more established business persons will tell you that in order to succeed in business, regardless of size, you need more than just a great idea. “Experienced entrepreneurs know that to start a business requires more than just a business idea. In an environment of fierce competition, access to resources is critical. It is also well known that firms that invest in employee training and also engage in formal performance appraisals, which are linked these to incentive pay, reap the rewards of lower employee turnover,” he said. “They also enjoy higher productivity and higher levels of work performance.”

However, these things play a greater role when you are a SME and have limited resources. “SMEs in particular, operating with slim resources and limited access to finance, must get it right – (and) the first time if possible. Now, there is very little room for error. Appropriate training thus enhances the survival rate of Small and Medium Sized Businesses.”

It is therefore imperative that this sector gets over the misconceptions associated with training their employees and engage in the practice of continuous staff training, said the Parliamentary Secretary.

“There is often the notion that Small and Medium Sized Enterprises are unaware of their training needs and, if they know, they cannot afford the training. There is also the fear that employees would leave or become discontented when trained. Small businesses need to dispel this notion because in today’s competitive environment you have to do what is necessary to survive. It is also imperative that continuous training becomes an integral feature of any small business if they are to survive. A trained workforce is the only appreciating asset of any firm.”