A Study on Influence of HR Competencies on Business Performance

Entrepreneurship culture has been prominent in recent days but Coimbatore is always considered to be a hub for Entrepreneurs pertaining to their rapid specialisation in the manufacturing sector. Coimbatore has a large and a diversified manufacturing sector, auto components and engineering products. Coimbatore is a major contributor to these sectors and it comes from small and medium scale industries. The micro, small and medium enterprises (MSME) sector of India contributes significantly to the manufacturing output, employment and exports of the country and thus it occupies a strategic position in the Indian economic structure. It is estimated that in terms of value, the sector accounts for about 45 per cent of the manufacturing output and 40 per cent of the total exports of the country. The sector is estimated to employ about 42 million persons in over 13 million units throughout the country which makes it the second largest manpower employer after agriculture. The MSMEs sector has long faced extreme obstacles in accessing finance and markets, in addition to it these enterprises face issues related to human resources in terms of talent retention, attrition, low skilled labours, etc. It is believed that effective HR management by the entrepreneurs can eliminate the human resource problems and improve their current state in terms of productivity and quality. In this study, the current state of management of human resources in Small and Medium Enterprises (SMEs) in Coimbatore is explored. We relate the effectiveness of the HR practices implemented at their enterprise to that of the competency of the entrepreneur and identify for existing gap. The study provides suggestions on the aspects to be improved based on the gap identified using research methods.