IMPORTANTS ABOUT HRM. (Chapter- 06)

What are the Problems for HRM in Sri Lankan.

Problems in Human Resource Management (HRM) in Sri Lanka

Small and Medium Scale Enterprises (SMEs) make up a large part of Sri Lanka's economy, accounting for 80 per cent of all businesses. These are found in all sectors of the economy, primary, secondary and tertiary and provide employment for persons of different skills, skilled, semi-skilled and unskilled. There are SMEs in the agri-business sector engaged in growing spices, fruits and vegetables and in the manufacturing sector engaged in numerous industrial activities accounting for about 20 percent of industrial establishments. In the service sector SMEs accounts for more than 90 percent of business establishments. SMEs are an essential source of employment opportunities and are estimated to contribute about 35 percent of employment. The SMEs play an important role in promoting inclusive growth. The focus on SMEs in policy discussions emanates also from their role in developing entrepreneurial skills, innovation and promoting economic growth. Increasingly, Small and Medium Enterprises (SMEs) are seen to have an important role in the Sri Lankan economy. Indeed, it would seem that both national and local economies are largely constituted of smaller enterprises, with the addition of a minority of larger enterprises. A number of problems emerge when assuming that small firms are the same as large firms. Welsh and White (1981) suggest that a traditional assumption amongst managers has been that small businesses should be managed along essentially the same principles as large businesses but on a smaller scale. They highlight the assumption that underlies this particular brand of thinking: those small companies are much like large companies, except they have smaller sales, less employees and smaller assets. There is the need for HRM research on SMEs which are viewed as bedrock of economic development in many countries of which Sri Lanka is of no exception. Chandler and McEvoy (2000) suggest that although published research indicates that effective management of HR is one of the most important problems faced by SMEs, there is an acute shortage of research identifying the practices in use in small firms. This study examines the use and effectiveness of HRM practices within SMEs in Sri Lanka.

Employee retention, as we know, is a critical challenge and priority for HR departments. High turnover rates can lead to significant financial costs, with the average cost of replacing a salaried employee ranging from six to nine months of their salary.

Human Resource Management (HRM) in Sri Lanka faces multiple challenges due to economic, legal, social, and technological factors.

​Human Resource Management (HRM) in Sri Lanka faces several challenges influenced by economic, legal, social, and technological factors.

 They 69% are not committed to the work.They (60%) see the work as belonging to somebody. They (61.3%) do not regard the rules and regulations at the workplace. The employees, the study revealed, are demanding more salary and other benefits than their output.

1. Talent Acquisition and Retention

• Skill Mismatch: There is a notable gap between the skills possessed by graduates and the competencies required by industries, leading to challenges in recruitment.​

• High Turnover Rates: Industries such as apparel manufacturing experience significant employee turnover, which affects productivity and increases recruitment costs. ​Academia

2. Compliance with Labor Laws

• Complex Regulations: Sri Lanka's labor laws are intricate, and frequent changes make compliance challenging for HR professionals.​

• Termination Procedures: Strict regulations surrounding employee termination can hinder organizational flexibility and responsiveness.​

3. Economic Constraints

• Budget Limitations: Economic challenges can lead to reduced budgets for HR initiatives, impacting areas like training and development.​

• Salary Pressures: High inflation rates result in increased demands for salary adjustments, straining organizational finances.​

4. Technological Adaptation

• Slow Digital Transformation: Many organizations are slow to adopt modern HR technologies, affecting efficiency and data management.​

• Cybersecurity Concerns: With the rise of digital HR systems, ensuring data security has become a significant concern.​

5. Work-Life Balance and Mental Health

• High work pressure in certain industries, leading to stress and burnout.

• Limited policies on remote work and flexible hours.

• Workplace mental health issues often overlooked.

6. Ethical Issues and Nepotism

• Favoritism and nepotism affecting recruitment and promotions.

• Corruption in certain HR functions, such as hiring and payroll.

• Lack of transparent performance evaluation processes.

7. Diversity and Inclusion

• Gender Disparities: Despite women constituting a significant portion of the population, their representation in leadership roles and certain industries remains low. Initiatives like female-staffed resorts aim to address these disparities. ​

8. Conflict Resolution.

• Conflict resolution poses a significant challenge for HR due to its complexity and the potential impact on workplace dynamics. Conflicts can arise from various sources, including disagreements between employees, interpersonal issues, differing work styles, or employee-manager misalignment.

REFERENCE

• ​Reuters.comAP News+1reuters.com+
• SpringerLink+1PMC+1
• Academia
• https://ours.ou.ac.lk/wp-content/uploads/2017/05/HSS-24-Formated.pdf
• https://www.google.com/search?q=conflict+resolution+for+hr+in+sri+lanka&oq=&gs_lcrp=EgZjaHJvbWUqCQgDECMYJxjqAjIJCAAQIxgnGOoCMgkIARAjGCcY6gIyCQgCECMYJxjqAjIJCAMQIxgnGOoCMgkIBBAjGCcY6gIyCQgFECMYJxjqAjIJCAYQIxgnGOoCMgkIBxAjGCcY6gLSAQkyODYwajBqMTWoAgiwAgHxBZ3BueGT9GAh8QWdwbnhk_RgIQ&sourceid=chrome&ie=UTF-8